EQUIPMENT FINANCING: THE ROUTE TO SMALL BUSINESS SUCCESS

EQUIPMENT FINANCING: THE ROUTE TO SMALL BUSINESS SUCCESS FINANCE LAND

NAVIGATING THE RIDE The entire financing process can sometimes seem a bit complicated, but it doesn t have to be. Knowing a few basics can help you navigate from point A to point B and can go a long way to help you get your application completed accurately to get the funds you need for your business faster. Inside this ebook you ll find: > What you should know before working with a lender > How to select a lender you can trust > What you should know about the application > How to decipher the financial documents > How the funds are distributed Page 2 2014 Direct Capital Corporation

FINANCE LAND MILE MARKER 1: THE PLAN Before you pack your bags and hit the road, make sure you re prepared. There are some fundamentals to consider before you even approach a lender about financing. Know what you need and why you need it. It may be obvious to you, but your lender is going to want to know how the new piece of equipment is going to be beneficial to your business. Have a handle on your time frame. Your lender will need to know from day one if they are going to have to move mountains to speed up the process for you in many cases, they will. NOTE: istock images used are: #3612953 (Castle) Know where your finances stand. Pull your credit report and #23615324 (Mtn) recent financial statements, that #6251866 way you ll (City) have an idea of any errors or blemishes that might be #2108418 red flags (Amusement to your lender Park) and you ll be prepared to talk about them. SUCCESS $ MILE 1 www.directcapital.com Page 3

FIRST EXIT: SELECTING YOUR LENDER You shouldn t just pull into the first bank you see along the way. There are many different types of lenders, from a traditional bank to a non-traditional alternative lender. Consider what you are looking for and the benefits of each. Be careful, though, some banks will not finance used equipment and will likely put many more restrictions on your loan. LENDERS EXIT 1 TRADITIONAL BANKS ALTERNATIVE LENDERS Once you re settled on the type of lender and think you ve found a good place, go online and check out their website. TIP Do a Google search and read all that you can about that lender. If you re not finding a rating like Direct Capital s A+ from the Better Business Bureau, then you may want to look elsewhere. Page 4 2014 Direct Capital Corporation

REST STOP: COMPLETING THE APPLICATION Pull over and rest for a while take a few minutes to thoughtfully fill out the application. Be sure you complete it accurately or you ll slow down the process. The lender is going to want to learn a number of things from your application: > The length of time that you ve been in business > Your overall revenue > An average bank balance > Your credit score. PICNIC AREA TIP It s important to give the lender only and exactly what they ask for, even if additional information might paint your business in a better light. Not doing so will only confuse the process. Once you have submitted your application, and it has been approved by the credit team (usually within 1-to-48 hours), the lender will begin to assess your options and what programs might be a good fit for your needs. www.directcapital.com Page 5

SERVICE PLAZA: THE FINANCIAL DOCUMENTS There s another stop ahead. Now that you ve submitted the application, your lender will provide you with the financial documents. These documents will include information on payment terms and your financial responsibility, so be sure to read them carefully! Once the signed documents have been returned to the lender, the lender will ensure that the documents are signed in all of the correct places and that nothing has been altered. Now, the lender may begin the funding process. TIP It s usually not necessary to have a lawyer go over the paperwork, but don t be afraid to call in counsel if there s something that doesn t sit right with you or something you just don t understand. Page 6 2014 Direct Capital Corporation

FINAL DESTINATION: RECEIVING THE EQUIPMENT You made it! You re close to receiving the equipment you need, but first your lender must release the funds to the vendor. FINANCE LAND 1 The lender calls the vendor for the delivery date of the equipment and requests payment terms 2 Equipment is delivered to you from the vendor 4 3 You look over equipment to ensure that it is exactly as advertised and free from damage. (Look carefully, this is an important step!) If all is well with delivery, you give the lender a verbal authorization 5 Funds are released to the vendor 6 The contract begins and you begin making payments in accordance with contract terms 7 At the end of the term, you may have the opportunity to purchase the equipment at fair market value or at set a price outlined in the initial contract 8 Finance your next piece of equipment! www.directcapital.com Page 7

ABOUT DIRECT CAPITAL Established in 1993, Direct Capital (www.directcapital.com) is a financial technology company that delivers financial solutions for small & medium sized businesses, franchisors, and equipment and technology sellers. A subsidiary of CIT (www.cit.com), Direct Capital is headquartered in Portsmouth, N.H. You can follow Direct Capital on Twitter at http://twitter.com/ DirectCapital or subscribe to its PointBlank blog at http://blog.directcapital.com/. We re dedicated to quickly providing our customers with what they need, when they need it. The financial products that businesses need Offered at the most competitive prices Delivered with extraordinary speed and automation Wrapped in a remarkable customer experience Learn more at: www.directcapital.com www.directcapital.com Page 9