Is there more to “application only” than the application?

Scott Brown

C’mon…it’s easy. Just fill in the simple form and in anywhere from an hour to a day we’ll hand you $150,000 for commercial equipment. The increasingly technology driven world of small business credit decisions the current state of application only is a wonderful thing. Right?
Well, it can be. It can also be riddled with problems. As you look to “application only” lending for your commercial equipment, here are some important items to consider:

Easy vs. Right. Easily getting your hands on the money feels good, but the devil is in the details. Just because you are approved, doesn’t mean it’s a good deal for you and your business.

All that glitters. What are the end of term provisions? How much money up front? Are their blanket liens placed on your business? We could go on and on. The equipment finance business is full lenders that seem to offer wonderful terms, but upon a detailed review, the details the finance structure can be harmful or at least not as good as it could be.

Seduction by Interest Rate. That’s one way to kick the bucket for sure. Finance geeks are great at “hiding” the interest rate. They may advertise 4% financing, but it’s hidden in an equipment sale package where the equipment price is increased to cover the low rate. Or they ask for more payments up front as a way to massage the faux interest rate down. Other parties may get you in the door with a low rate offer that virtually no one can actually get. The old bait and switch is always waiting for the rate shopper.

Dealers don’t are not finance people. Commercial equipment dealers leveraging financing to help sell their equipment…and rightly so. The problem is they are not finance experts and many small business owners leave success or failure in the hands of people that turn wrenches or write code. Not a consistent path to success.

You don’t know, what you don’t know. This biggest problem with application only lending is that most business owners simply don’t know what to look for, questions to ask and if the finance deal in front of them is actually a good deal.

At Charter, our 35 year history and smarter approach to equipment finance bring more options to your business for smarter choices. And we can be the advisor that guides you through what deal is a good deal. After all, our unique approach to equipment finance puts us on your side of the table. As you look to evaluate the impact your next equipment purchase has on your business, give us call. We can help. You see, this is about more than money to us.

Why do bankers and business owners speak two different languages?

Scott Brown

Our dearly beloved bankers. They have a huge place in powering our economy and after talking to many of them, have you ever wondered how anyone gets anything done? The process of borrowing money seems to get harder with more documentation, bases to touch and things to verify each time you ask. And then there’s our favorite: they never seem to explain much of anything very well. Communication is a struggle. Why?

Over the years, banking has evolved from the community banking model to the national banking model. And while community banks exist, the current regulatory environment has many of them under intense pressure. This means more bankers are growing up in the ivory towers of Corporate America and not in the diners of Main Street America. From a young age they are reared into the “banking” culture, when years ago bankers were reared in a more advisory, entrepreneurial culture. Your culture. As such, when you’re not raised in the same area, you may not speak the same language.

Here are some key things to look for in a lending relationship that can help eliminate the communication gap:

Someone that doesn’t make you feel judged. Once upon a time, bankers were advisors in all seasons of the life of a business owner. These days they can feel more like judges in an ivory tower. If you feel looked down upon or judged rather than guided and advised, it’s time to look elsewhere.

They can’t help you if they can’t “get” you. Your lenders don’t have to be exclusive experts in your industry, but they have to possess the desire to become an expert lender for your business. And that means they need to demonstrate a deeper desire to understand where your business has been and is going before they can really create solutions.

You need a relationship, not a deal. Rate-based relationships aren’t relationships at all. Choosing lenders because they have the cheapest money may feel right…right up until they don’t. A capital provider that invests in your people is always a better solution than a low-rate deal. And a lender that loves you when times are good and won’t return calls when the winds are blowing is not a partner. Find a lender that can provide capital consistently, through the cycles.

Aligned interests. If your banker calls you and “pitches” the treasury management product they were told to “blitz” this month…run. Your needs are not something determined in a banker sales “blitz”. They are determined by making an investment in your people, process and future. And consultatively bringing solutions instead of selling products. One approach aligns with your direction as a leader and the other is all about them.

At Charter, our 35 year history and smarter approach to equipment finance bring more options to your business for smarter choices. We’re an entrepreneurial company with a business model built to be on your side and speak your language. As you look to find a lender that does all the above and more, give us call. We’re a lot like you.

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