Equipment Financing for Customers: How to Avoid Deal Killers

What can kill an equipment financing deal?

Things like poor credit, unclear business ownership, and unfavorable equipment can stop you from getting equipment financed for your business. 

Watch or hear Clem and Kesley break down multiple "deal killers" for equipment and vehicle financing. 

You know that having the right equipment is crucial to growing your company and achieving your goals. 

Hopefully the information presented (above for audio, below for video) can help you understand the steps to take to get past any roadblocks if you need to finance equipment. 

Kesley 00;00;05;07 - 00;00;20;13

Welcome to season two, Episode five of The Smarter Business Finance Podcast. I'm Kesley senior rep here, and I am with Clem, the Man, the myth, the Legend. Also a rep here. We're here to talk about some red flags.

Clem 00;00;20;16 - 00;00;21;12

Red flags.

Kesley 00;00;21;16 - 00;00;22;22

Dating Red flags.

Clem 00;00;22;25 - 00;00;27;09

Dating Red flags. Are you still doing Tinder dates?

Kesley 00;00;27;24 - 00;00;33;08

I can't. I can't do I can't do Tinder. There's too many too many felons. I find.

Clem 00;00;33;12 - 00;00;33;27

Felons.

Kesley 00;00;34;04 - 00;00;47;24

Ex-felons. Deadbeat Dads, deadbeat dads. They don't want to pay for their kids, don't want to pay for their kids. And probably going through a bankruptcy, trying to live with me. Oh, I can't. I can't. You know, these men are. No. Can have them living with me.

Clem 00;00;47;24 - 00;00;48;22

I can understand that.

Kesley 00;00;48;27 - 00;00;52;06

It's a lot like commercial lenders. I think they're looking for those red flags.

Clem 00;00;52;06 - 00;00;53;08

They don't like to same people.

Kesley 00;00;53;10 - 00;00;53;25

They don't.

Clem 00;00;53;26 - 00;00;54;11

They don't.

Kesley 00;00;54;11 - 00;01;04;11

No You know, it's I guess it's the concept of, hey, can I have 100,000? I, I didn't pay, you know, I didn't pay my, my buddy back. Yeah, but I'll pay you back. Right.

Clem 00;01;04;13 - 00;01;12;04

The last car I had, the bank came and picked it up. But I need you to loan me money for a truck.

Kesley 00;01;12;04 - 00;01;13;14

Oh Yeah Qualifiable

Clem 00;01;13;17 - 00;01;14;22

Yeah, definitely.

Kesley 00;01;14;27 - 00;01;19;00

No, I'm not. No, but we'll get your hoopty We'll get you one at a high rate. High up.

Clem 00;01;19;17 - 00;01;20;25

In it. Lots of money down.

Kesley 00;01;21;02 - 00;01;22;00

Does the job.

Clem 00;01;22;01 - 00;01;22;10

Yeah.

Kesley 00;01;22;24 - 00;01;23;09

All right.

Clem 00;01;23;17 - 00;01;28;28

There's always a bank that will loan money to somebody. That can fog a mirror as long as they had enough cash down

Kesley 00;01;28;28 - 00;01;49;20

Now, you're one of our top producers here. What are. I mean, what are some real red flags? You've got a business owner calling in on the line. Clem, work your magic. I need to get into a sleeper. My rig is down. What are some red flags? What are some deal killers that you're going to see?

Clem 00;01;49;20 - 00;02;03;13

Two of the biggest black eyes that we can't get around generally is going to be previous auto loan charge offs, also known as repo and past due child support or family support.

Kesley 00;02;04;00 - 00;02;04;20

Kiss of death.

Clem 00;02;04;24 - 00;02;05;14

Kiss of death.

Kesley 00;02;05;23 - 00;02;06;13

Kiss of death.

Clem 00;02;06;16 - 00;02;07;13

Kiss of death.

Kesley 00;02;07;13 - 00;02;08;01

Absolutely.

Clem 00;02;08;01 - 00;02;11;25

Is pretty tough. Bankruptcies we can get around if they're old enough.

Kesley 00;02;13;22 - 00;02;14;21

How old are we talking?

Clem 00;02;14;21 - 00;02;28;00

Couple of years. You know, some banks want to see 5 to 7 years, but you do get some lenders. That's okay if there's a couple of years old, you know, But you can't be fresh out of a bankruptcy and think going to get a commercial loan that dog and gonna hunt

Kesley 00;02;28;00 - 00;02;30;18

What about a felon? You know.

Clem 00;02;30;28 - 00;02;39;20

What about depends on what you did. Let's just be real. You know, everybody got a past.

Kesley 00;02;40;11 - 00;02;41;19

And it's none of our business.

Clem 00;02;41;20 - 00;02;42;17

It's none of our business.

Kesley 00;02;42;17 - 00;02;43;27

Our business. We're not once.

Clem 00;02;44;06 - 00;02;47;13

Not known ones to judge. Okay. I should be the first to say that.

Kesley 00;02;48;18 - 00;02;50;27

But the banks, the one with the coin. So they have to make the rule.

Clem 00;02;50;27 - 00;02;55;16

Exactly like you got previous fraud or sex offenders.

Kesley 00;02;55;16 - 00;02;58;28

Money laundering isn't a good look when you're looking to pick up some trailer.

Clem 00;02;58;28 - 00;03;00;13

Not a good look. I did.

Kesley 00;03;00;13 - 00;03;02;00

Look for business.

Clem 00;03;02;00 - 00;03;12;12

Theft. This could be a tough one. You know, So, yeah, especially if you're looking to go over the road, you know?

Kesley 00;03;12;28 - 00;03;15;12

Right, Right. Working at the ports, too.

Clem 00;03;15;12 - 00;03;18;09

Yeah, yeah, yeah. See, this can be very tempting.

Kesley 00;03;18;09 - 00;03;22;23

Yes. Florida, Florida, The state of Florida can attest for that. Yeah.

Clem 00;03;22;24 - 00;03;23;19

Say, yeah.

Kesley 00;03;24;07 - 00;03;34;08

Late payments on a car note. Yeah, that's tough. But let's talk about time in business. You've got a guy who's got plenty of time in business, is taking great care of his credit. COVID hit.

Clem 00;03;34;28 - 00;03;35;16

Covid hit

Kesley 00;03;35;21 - 00;03;52;29

What goes first? Credit card, car payments, things like that. You know, mortgage has to get paid because the mortgage has a hit. If the mortgage takes a hit, then, you know, probably isn't going to want to give you any more skin to that game because the skin you've got, the skin you have in the game is already defaulted.

Clem 00;03;53;15 - 00;03;58;29

And that's another thing. Like with the sleeper trucks, these banks, you know, they want to see those bank statements.

Kesley 00;03;59;09 - 00;04;00;08

Bank statements.

Clem 00;04;00;08 - 00;04;11;26

And felons. If you don't have money in the bank, start putting money in the bank because the bank does not go for that. My money's in a good safe shit they not be that listen to the money is in the shoeboxes in the mattress.

Kesley 00;04;11;28 - 00;04;15;03

That mattress money know that mattress money means no nothing.

Clem 00;04;15;06 - 00;04;17;02

Nothing they want to see that working capital.

Kesley 00;04;17;05 - 00;04;28;05

That's right. I've got a lot of clients who call in and say I've got 500,000 in cash. I don't trust banks. I don't want to put my money in banks. Well, that sir is a red flag. That's a that's a red flag.

Clem 00;04;28;09 - 00;04;39;22

You will have clients that will send you photos of a bag full of cash. I really got the money. The bank's not going to accept it. At least keep money in the bank for three months and then apply for a loan.

Kesley 00;04;39;25 - 00;04;40;28

90 days? Yeah.

Clem 00;04;40;28 - 00;04;48;21

The banks only ask for three months of bank statements. So if you got three months of bank statements and you got some money in the bank for the last three months, that's that's sufficient.

Kesley 00;04;49;17 - 00;04;56;05

But if those 90 days bank statements have any and as NSF a.k.a overdraft fees.

Clem 00;04;56;05 - 00;04;58;21

Yeah bouncing checks and such. No that's not going to work.

Kesley 00;04;58;21 - 00;05;05;25

The underwriter is typically going to see that as another red flag. Yeah. You know we can't trust you with your own funds. How can we trust you with ours?

Clem 00;05;06;06 - 00;05;08;17

That's correct. That's true. That's true.

Kesley 00;05;08;18 - 00;05;09;16

It's a big red flag.

Clem 00;05;09;16 - 00;05;23;27

Huge red flag. Another big red flag is when you see the loan companies. In other words, they borrowed money to borrow money. You know, MCA laws, MCA loans are bad.

Kesley 00;05;23;27 - 00;05;26;12

That's tough. You've got a note on your note.

Clem 00;05;26;16 - 00;05;48;13

I borrowed 20,000 to put 20,000 down. That's they are the worse the rates through the roof. You got some some lenders that will actually take payments out weekly. Some will even take payments out of their account daily. Yeah. Yeah. Oh, yeah, Yeah. So you talking about Gambino crime family type shit Yeah. So time in business.

Kesley 00;05;49;07 - 00;05;49;24

Time in business.

Clem 00;05;49;24 - 00;05;51;25

What's a good time in business? what’s a bad time in business?

Kesley 00;05;52;06 - 00;06;12;19

There's no bad time in business. I mean, we commend everyone for starting a company, but a red flag. You know, a red flag for a company that just started. You know, I've never paved any roads, right? I'm calling you Clem, and I need a paver. I've never paved any roads. I've never been in the industry before. But I know a guy who's done it

Clem 00;06;12;19 - 00;06;13;18

you know, a guy.

Kesley 00;06;13;21 - 00;06;14;14

I know a guy.

Clem 00;06;14;19 - 00;06;16;22

You got a company who's been around for, what, 15 minutes.

Kesley 00;06;16;27 - 00;06;26;20

15 and a half minutes, I'd say, Got it filed. We're ready to go. You know, I've got a tax guy telling me we're going to do well, but I need a paver. No experience, but I've got 20% down.

Clem 00;06;27;08 - 00;06;41;29

That's going to be tough. That's going to be a tough that's going to be a tough road to tell because, if you don't have any experience in the industry, it’s damn near impossible to get the bank to loan you the money for your bright idea.

Kesley 00;06;42;01 - 00;06;43;11

That's right. And that's what we call.

Clem 00;06;43;11 - 00;06;44;01

A really tough.

Kesley 00;06;44;01 - 00;06;45;16

Red flag. Yeah, red.

Clem 00;06;45;16 - 00;06;51;21

Flag. Really tough to get along for something again. Now, if you have had some experience in the industry. We got banks that give you a shot.

Kesley 00;06;51;22 - 00;06;53;05

How much experience?

Clem 00;06;53;06 - 00;07;14;02

At least a few years here. Yeah. So in other words, if you got it, you want to go into the trucking business and you tired of working for somebody else. Yeah, You need to have at least a couple of two, three years under your belt as a truck driver. At least you can't just wake up one day and decide, I'm going to start a trucking company and you don't even know how to grab a gear.

Clem 00;07;15;11 - 00;07;16;09

That's just not going to work.

Kesley 00;07;16;26 - 00;07;23;11

You know, those trucks, they require a specific license to operate. Yeah, I do get quite a few clients without that CDL.

Clem 00;07;23;11 - 00;07;33;04

Look, you got to have a CDL If you've got a business that's been around for a while and you don't have a CDL you know, and you already established. We got programs for that.

Kesley 00;07;33;09 - 00;07;36;21

They've got skin in the game, they've already got trucks on their fleet. Yeah, but.

Clem 00;07;36;21 - 00;07;42;29

It's you a dentist and you've got too much damn money in the bank and you decide you want to just start a trucking company.

Kesley 00;07;44;00 - 00;07;48;09

It doesn't matter if you've got an 800 FICO or $2.6 million in the account.

Clem 00;07;49;01 - 00;07;49;16

They don't.

Kesley 00;07;49;21 - 00;07;50;16

They don't care.

Clem 00;07;50;16 - 00;07;58;27

You know, this is the first industry I ever been in where having excellent credit is really don't matter all that much.

Kesley 00;07;58;27 - 00;07;59;13

Kesley

It doesn’t

Clem 00;07;59;13 - 00;08;02;19

It helps. But it is certainly not the end all, be all.

Kesley 00;08;02;22 - 00;08;08;00

It really does. I tell all of my clients that the score is only a fraction of what these banks really care about.

Clem 00;08;08;05 - 00;08;15;21

Time in business supersedes personal credit in this game, you can have subpar credit, but if you got some years in business, banks would give you a shot.

Kesley 00;08;16;01 - 00;08;16;14

Oh, yeah.

Clem 00;08;16;26 - 00;08;26;26

But no time in business with excellent credit banks are petrified of that They are petrified.

Kesley 00;08;28;04 - 00;08;35;05

So far we've got a list of red flags with felonies. Felonies lates on a mortgage.

Clem 00;08;35;19 - 00;08;36;18

Repossessions.

Kesley 00;08;36;25 - 00;08;42;19

Recent repossessions. Right within the last three years, you've got an auto loan charge off and you've got a business.

Clem 00;08;42;19 - 00;08;46;16

Past due family support. Those are red flags.

Kesley 00;08;46;26 - 00;08;48;02

Overdraft charges.

Clem 00;08;48;02 - 00;08;49;23

Clean that up.

Kesley 00;08;49;23 - 00;08;50;17

Keep it crispy.

Clem 00;08;50;22 - 00;08;51;01

Yeah.

Kesley 00;08;51;09 - 00;08;56;27

Can't have crappy bank statements. No, how going to make payroll, right? Yeah. Got payroll coming out of that account now.

Clem 00;08;56;27 - 00;09;00;15

Yeah where’s the working capital at? Gotta have working capital

Kesley 00;09;01;15 - 00;09;02;20

No, working capital.

Clem 00;09;03;08 - 00;09;07;16

Yeah. you can't be one break down from filing bankruptcy. That's a red flag.

Kesley 00;09;07;22 - 00;09;09;15

That's a red flag. Yeah, that's a red flag.

Clem 00;09;09;18 - 00;09;11;04

You can’t have all your credit cards maxed out.

Kesley 00;09;11;23 - 00;09;12;13

Red flag

Clem 00;09;12;21 - 00;09;17;08

Yeah. All your cards are maxed out. That ain't great.

Kesley 00;09;18;05 - 00;09;23;18

What isn’t a red flag? Going through a divorce. I always have the clients and started. Well, I'm going through a divorce.

Clem 00;09;25;07 - 00;09;41;05

Yeah, well, you can have some when you see a lot of when you see a handful of derogatory accounts and they all within like three or four months of each other. We could put together a story for that. Yeah. Yeah. Banks like stories.

Kesley 00;09;41;12 - 00;09;41;28

They do?

Clem 00;09;41;29 - 00;09;48;12

Yeah. They like stories That's right. And if banks like stories, I'm Walt Disney. Let's go.

Kesley 00;09;48;12 - 00;09;59;22

Let's talk about some fraudulent bank statements. If you're thinking about fictitious bank statements, just don't. Don't do it. The banks will know they will know

Clem 00;09;59;22 - 00;10;01;16

We will know before you even get to the bank.

Kesley 00;10;02;04 - 00;10;05;11

Yeah, that's true. We'll laugh. We'll laugh at you first.

Clem 00;10;05;22 - 00;10;07;07

Then we got to inactivate your account.

Kesley 00;10;07;14 - 00;10;10;24

Yeah, yeah, yeah. Got to make sure everyone in the company also knows.

Clem 00;10;10;26 - 00;10;31;23

So funny thing about sleeper trucks because we can have a guy call up and want a $100,000 forklift. Banks won't ask for bank statement because it's construction. It's a different industry, blah, blah, blah. But a $50,000 sleeper truck, they want the sun, moon and stars. That's right. The bank statements.

Kesley 00;10;32;14 - 00;10;41;05

Why? Why do you think that they have such higher requirements on lending for that industry? Why are they looking for so many red flags?

Clem 00;10;42;03 - 00;10;45;04

It's like with any loan. It's called risk factors.

Kesley 00;10;45;23 - 00;10;45;29

Yep.

Clem 00;10;46;16 - 00;10;58;22

You know, the higher the risk, the higher the rate, the higher the risk, the more scrutiny you're going to get. You know what I mean? So it’s risk factors, transportation is a higher risk than construction.

Kesley 00;10;59;03 - 00;11;00;20

One of the highest risks in lending.

Clem 00;11;01;09 - 00;11;07;06

Construction is a higher risk than a doctor's office that want an MRI machine. Right. So it's just risk factors.

Kesley 00;11;07;13 - 00;11;08;29

Bank is a business at the end of the day.

Clem 00;11;09;04 - 00;11;10;14

At the end of the day, yeah.

Kesley 00;11;10;23 - 00;11;13;01

They have to they have to make their coin and they need to.

Clem 00;11;13;07 - 00;11;13;16

Yeah.

Kesley 00;11;14;24 - 00;11;18;23

Appropriate the risk as opposed to the income. What deal is worth it.

Clem 00;11;19;03 - 00;11;29;04

Yeah. They look at default rates too. I mean you know trucks default a lot more often than a skid steer

Kesley 00;11;29;11 - 00;11;37;14

70% default through COVID right 70% of haulers who had just gone into business defaulted through hardship. Yeah.

Clem 00;11;37;22 - 00;11;46;23

Or took a payment plan. Yeah but even even pre-COVID trucking just have a higher default rate than every other industry.

Kesley 00;11;47;08 - 00;11;47;25

It's costly to fix

Clem 00;11;47;25 - 00;11;53;25

To that's the reason was more scrutiny. That's why you don't need bank statements for a forklift, but you need bank statements for sleeper truck

Kesley 00;11;54;06 - 00;11;54;17

Right

Clem 00;11;55;14 - 00;11;59;24

Yeah. What about vocational stuff? What are you seeing with those?

Kesley 00;12;00;14 - 00;12;25;00

My biggest red flags for vocational are the clients who don't have the industry experience. They know a guy in the area because infrastructure is huge. Anything locally based is huge here is small knit community. So everyone knows everyone. You've got a buddy who is making 70,000 a month and they want to draft everyone. So that's my biggest red flag I get from clients is it's a dream that they wake up with and they want to launch right into.

Kesley 00;12;25;01 - 00;12;27;29

Yeah, without the experience, without the financials.

Clem 00;12;28;11 - 00;12;31;04

really high risk.

Kesley 00;12;31;04 - 00;12;34;22

What do you see with vocational?

Clem 00;12;34;23 - 00;12;50;24

With tow trucks It can be tough because oh, tow trucks, a lot of these guys get paid under the table, so they got the experience. But it's hard to prove sometimes, You know, you got to kind of make them go back and dig up some old records to get the industry experience, you know?

Kesley 00;12;51;26 - 00;12;56;18

Yeah, tow truck drivers are the mama don't know Money

Clem 00;12;56;19 - 00;12;57;11

There you go. Yeah.

Kesley 00;12;57;11 - 00;13;06;08

No one knows about their money and they're going to keep it a secret. Doesn't help. Towing is high risk. Very high risk towing as an industry is a red flag itself.

Clem 00;13;06;19 - 00;13;11;04

Yeah. Because you actually going to take people cars everybody don't do roadside assistance.

Kesley 00;13;11;05 - 00;13;11;21

That's right.

Clem 00;13;11;26 - 00;13;14;24

Non consent tows to all the tow truck drivers out there.

Kesley 00;13;15;07 - 00;13;22;08

You've got people jumping on the hood, flamethrowers, “YOU’RE NOT TAKING MY CAR”

Clem 00;13;22;09 - 00;13;23;01

Repos.

Kesley 00;13;23;02 - 00;13;24;03

Repos.

Clem 00;13;24;03 - 00;13;26;15

Private impounds

Kesley 00;13;27;07 - 00;13;27;10

Oh yeah

Clem 00;13;27;14 - 00;13;35;26

Yeah, yeah, yeah. Definitely. Definitely tough to get those done sometimes. But vocational world is a lot easier tho than sleeper trucks.

Kesley 00;13;36;22 - 00;13;37;08

I'd say yeah.

Clem 00;13;37;10 - 00;13;38;21

Yeah. ten fold

Kesley 00;13;39;19 - 00;14;04;11

So much easier to look upon the trucks as they are local. Yeah, well, if you're looking at, you know, a hot piece of garbage for 15,000 and it's an 82, you know, with 62 million miles on it, is it really that much easier to get into or is that a red flag? I got to I have a good red flag.

Kesley 00;14;04;21 - 00;14;13;15

Okay, I've got a good one. I'll put it to you this way. I've got $500 in my account. Okay. And I need a skid steer.

Clem 00;14;13;28 - 00;14;14;06

Okay.

Kesley 00;14;14;09 - 00;14;29;25

The skid steer is 250,000 because I need a brand new one. I've got some contracts coming up now. The lender is going to look at me and think, you've got champagne taste on a beer budget. You don't have the up front, you don't have the skin in the game. And quite frankly, credit typically follows suit with that as well.

Kesley 00;14;29;26 - 00;14;38;07

Have you ever finance something comparable? You know, a skid steer for 250,000. That's a mortgage. Are you a homeowner? Have you ever borrowed anything.

Clem 00;14;38;17 - 00;14;40;16

Remotely close to that amount?

Kesley 00;14;40;16 - 00;14;41;08

50%.

Clem 00;14;42;08 - 00;14;46;14

That's another red flag now that you bring it up. Yeah. Comparable debt.

Kesley 00;14;46;18 - 00;14;56;09

Comparable debt, Yeah. You've never borrowed you've got a secured credit card for $350. You're asking for a $65,000 commercial loan.

Clem 00;14;56;13 - 00;14;56;22

Yeah.

Kesley 00;14;57;09 - 00;15;00;16

An underwriter is going to see that as a red flag.

Clem 0;15;01;15 - 00;15;07;01

In other words, it's like you never financed a Honda Civic, but you want to finance.

Kesley 00;15;07;07 - 00;15;07;25

Rolls-Royce.

Clem 00;15;07;27 - 00;15;11;26

A Ferrari 360 Modena.

Kesley 00;15;11;26 - 00;15;12;13

Where.

Clem 00;15;12;13 - 00;15;22;27

You never financed the Toyota. Yeah, but I can handle that. Right. I wont let Bank take that back. Oh, yeah, yeah. Oh, yeah, yeah. You're not going to get a 200,000 loan if you never had a $20,000.

Kesley 00;15;22;27 - 00;15;24;16

All right, That's a red flag.

Clem 00;15;24;19 - 00;15;28;01

Yeah. You to have some payment history.

Kesley 00;15;28;11 - 00;15;48;08

Payment history? That's a good one. That's it? Yeah. You've got auto loans. We've all, a majority of us, have financed a vehicle or leased a vehicle. Lenders want to see positive payment history. Exactly. Now, Yes. They want to see the last 12 months. They want to see that you're in a fair position, especially if you're new to business. Right? That's the only credit.

Kesley 00;15;48;08 - 00;15;51;07

That's the only street credi if you will, that you can offer to them.

Clem 00;15;51;12 - 00;15;51;18

Thats right

Kesley 00;15;51;20 - 00;16;07;10

Your personal CBR, your personal background, but say you finance multiple vehicles and on every single vehicle that you ever purchased, you've made at least three or four late payments for each one. Now that's habitual. That's a pattern. Yeah. And that's a.

Clem 00;16;08;04 - 00;16;10;06

Also known as sloppy red flag.

Kesley 00;16;10;06 - 00;16;10;24

Red flag.

Clem 00;16;11;21 - 00;16;16;04

Yeah. Sloppy pay history that will definitely get you shot down. Oh yeah. Yeah.

Kesley 00;16;17;00 - 00;16;27;00

I mean it's fair right. If I were to ask you for $5,000 note I need $5,000 But you know I, I'm behind on my car payment currently. Are you?

Clem 00;16;27;11 - 00;16;51;01

Well, you know, credit records always tell a story, you know, And the best way to know what somebody is going to do with what they did previously. That's right. That's just a way of life. You know, We all know what's about to happen next, you know, So you look at that credit report, you like, you can already see which way this is going.

Clem 00;16;51;13 - 00;16;57;04

Oh, you know, ain't pay. Nobody on time is a good setting or not going to pay the bank back on time. That's right.

Kesley 00;16;57;07 - 00;16;58;29

Yeah, that's right.

Clem 00;16;58;29 - 00;17;02;16

So, yeah, those are red flags. Definitely sloppy pay history.

Kesley 00;17;02;26 - 00;17;04;27

Sloppy pay history is a big one

Clem 00;17;04;27 - 00;17;15;29

That's where the time in business come in play. So good time in business. The bank kind of like accept a little bit more. They have a higher tolerance for it, you know.

Kesley 00;17;16;01 - 00;17;19;26

Yeah. They have more flexibility with the people who have proven themselves within their industry.

Clem 00;17;19;26 - 00;17;20;15

Absolutely.

Kesley 00;17;20;15 - 00;17;26;09

If you're you're generating income, you're profitable, your bank statements are healthy.

Kesley 00;17;27;06 - 00;17;32;07

You've got time in business. You've got equipment that's operating because banks see your equipment as an employee.

Clem 00;17;32;13 - 00;17;34;01

Got a much better shot of getting the loan.

Kesley 00;17;34;02 - 00;17;34;26

Absolutely.

Clem 00;17;34;27 - 00;17;35;06

You know.

Kesley 00;17;35;27 - 00;17;54;11

Much less risky. That bank is going to make money off of you because you're not going to default and they want you to come back if you're a viable candidate, they want you in their wheelhouse of of borrowers. They want to continue to lend to you. But if you can't prove your trust and you don't have skin in the game.

Clem 00;17;55;09 - 00;17;59;11

No previous commercial credit repossessions. Yeah.

Kesley 00;17;59;21 - 00;18;00;25

Foreclosures.

Clem 00;18;02;09 - 00;18;07;08

Red flags, big ones. This big one, big ones.

Kesley 00;18;07;08 - 00;18;20;04

Got a flag like this. Oh, I have had a client who called me when they were filing bankruptcy. They're in the middle of bankruptcy, and then they let it slip. They let it slip. They weren't going to tell me.

Clem 00;18;20;04 - 00;18;20;18

Well.

Kesley 00;18;21;01 - 00;18;29;27

They weren't going to tell me as if I weren't going to see. 21 derogatory trade lines looking for $75,000 loan.

Clem 00;18;30;22 - 00;18;39;08

Yeah, well, you know, it's important for clients, to be honest. You know, we can help most people.

Kesley 00;18;39;08 - 00;18;40;09

We can't help everybody but...

Clem 00;18;41;02 - 00;18;50;24

Can’t help everybody One thing's for sure for certain, if there's a way to get it done, we gone get it done.

Kesley 00;18;50;29 - 00;18;52;01

Yes, we are. Okay.

Clem 00;18;52;17 - 00;18;58;22

We don't get it done. We don't get paid by the hour. We get paid for moving money.

Kesley 00;18;58;22 - 00;18;59;06

That's right.

Clem 00;18;59;09 - 00;19;03;24

Okay. So if there's a way to get it done, we're gonna make it happen.

Kesley 00;19;04;13 - 00;19;06;00

We're in the business of financing equipment.

Clem 00;19;06;07 - 00;19;23;20

That's right. That's right. That's what we do. Yeah. We've got to find a way to get it done. We're going to get it done. We're talking about red flags, but sometimes as a way to get around some of them. Not all of them, but some of them. And there's a way to get it done. We will get it done.

Kesley 00;19;24;17 - 00;19;27;07

What's a green flag? Give me some green flags

Clem 00;19;27;07 - 00;19;31;14

For a green flag. Homeowner Good payment history.

Kesley 00;19;31;22 - 00;19;34;06

Installment loans. Oh, yeah. Comparable debt.

Clem 00;19;34;09 - 00;19;34;22

Yeah.

Kesley 00;19;36;01 - 00;19;37;04

Time in business.

Clem 00;19;37;04 - 00;19;57;06

Pull up the secretary of state business been around since 2015. We north of five years we're cooking with gas. Cooking with gas sleeper truck three months of bank statements. That’s money in the bank. Oh, Paynet report. I see three trucks. Oh, well, I'm.

Kesley 00;19;57;06 - 00;19;59;07

Sweating I'm so quick. We're getting that submission in

Clem 00;19;59;14 - 00;20;00;14

Yeah. Yeah.

Kesley 00;20;01;06 - 00;20;15;22

I've had a client with an 800 FICO, and they sent me over and they pulled every penny out. They had 170 in overdraft charges 13 years time and business declined.

Clem 00;20;16;09 - 00;20;16;19

Yeah.

Kesley 00;20;16;28 - 00;20;21;18

And why were they declined? One late payment on the mortgage and couldn't show Banks.

Clem 00;20;21;18 - 00;20;22;17

Couldn't show banks.

Kesley 00;20;22;17 - 00;20;43;16

Couldn't show banks. Yeah. I've I've certainly seen banks offer the approval and say it's contingent upon their bank statements. They'd like to see their financials last 90 days, which is it's not that steep of an ask 90 days to show what your business is producing or losing or what you have in reserves. You know, Bank doesn't want to take every dollar you have.

Kesley 00;20;43;16 - 00;20;44;10

They don't want to rob you.

Clem 00;20;44;11 - 00;20;47;25

Exactly. That's the reason why a lot of our lenders don't require money down, Right?

Kesley 00;20;47;28 - 00;20;48;19

A lot of them don't.

Clem 00;20;48;19 - 00;20;51;02

Yeah, just a couple of payments and a doc fee. That's it.

Kesley 00;20;51;10 - 00;21;03;17

That’s right. We've got a couple that'll do zero down just your doc fee. They can't get away from the doc fee every bank charges that it's essentially your processing fee. Just like when you go to buy that Honda Civic, you've got your admin fee and your doc fee.

Clem 00;21;03;20 - 00;21;05;21

You don't pay a doc fee. Oh, yeah. No way around it.

Kesley 00;21;05;23 - 00;21;08;02

Paying for their time, paying for their paper.

Clem 00;21;08;02 - 00;21;08;29

Processing the paper.

Kesley 00;21;08;29 - 00;21;09;18

Yeah, right.

Clem 00;21;09;18 - 00;21;10;27

Processing the loan costs.

Kesley 00;21;11;06 - 00;21;11;23

That's right.

Clem 00;21;11;27 - 00;21;12;23

They gonna charge something.

Kesley 00;21;13;16 - 00;21;20;03

Well, I did a $120,000 rig with a 1200 dollar doc fee. That's all we had to come up with a 1200 dollar doc fee.

Clem 00;21;20;03 - 00;21;20;16

That's it.

Kesley 00;21;21;00 - 00;21;24;07

Walked away. Payment 30 days out, ready to go.

Clem 00;21;24;22 - 00;21;26;16

Previous commercial credit

Kesley 00;21;26;29 - 00;21;30;15

Yes, Commercial credit.

Clem 00;21;30;16 - 00;21;30;27

Yeah.

Kesley 00;21;31;07 - 00;21;32;27

Oh, that's a green flag.

Clem 00;21;32;27 - 00;21;36;03

I’ve financed a couple of trucks already and I paid them off love to hear that

Kesley 00;21;36;13 - 00;21;38;26

You know, a lot of people don't know that commercial credit is forever.

Clem 00;21;39;23 - 00;21;40;23

Yeah, I know

Kesley 00;21;41;08 - 00;21;50;05

It never goes away. I mean, you could have a you write an auto loan off or a piece of equipment eight years ago. You think it's going anywhere that commercial credit is It's showing.

Clem 00;21;50;14 - 00;21;51;13

It’ll show up someplace.

Kesley 00;21;51;14 - 00;22;14;02

Yeah. Any any hiccups on commercial lending? Any hiccups on your Paynet Dun and Bradstreet, at your Equifax? This is a red flag. Yeah, it is. I've seen a lot of clients with substantial time in business, healthy reserves, healthy personal credit. But the minute you look at their Paynet and they've got a charge off, whether it's sixty grand ten grand, typically that's the kiss of death.

Clem 00;22;14;03 - 00;22;15;21

It is. I've seen that, too.

Kesley 00;22;15;25 - 00;22;16;08

Yeah.

Clem 00;22;16;17 - 00;22;38;13

In fact, sometimes when we get a deal and I see everything is lining up perfectly the only thing that can kill this is if you got a crappy pay net report. You'd be like, good time business, great credit, homeowner, Slow down Turbo. Let's see that paynet report.

Kesley 00;22;38;16 - 00;22;47;02

That's right. You know, I'd say that if I've got a client in front of me who's got ten, 15 years time in business and they don't have commercial credit.

Clem 00;22;47;29 - 00;22;49;00

Red flag.

Kesley 00;22;49;09 - 00;22;50;01

That's a red flag.

Clem 00;22;50;07 - 00;22;58;06

Or they, oh, they text you and call you and they got great credit. It is done yet. Is it done yet? Is it done yet? Is it done yet?

Kesley 00;22;58;19 - 00;23;00;08

Who's Social Security Did you steal?

Clem 00;23;00;22 - 00;23;01;04

Yeah.

Kesley 00;23;01;06 - 00;23;03;03

Whose number are you using right now?

Clem 00;23;03;03 - 00;23;06;13

Something's not right. Why do you keep worry? Look good to me. You look.

Kesley 00;23;06;13 - 00;23;06;26

Great.

Clem 00;23;06;26 - 00;23;11;06

Yeah, but if you worry now, you make me worry, you know?

Kesley 00;23;11;18 - 00;23;17;18

Yeah. There's no one more confident than a client with time in business and an 800 FICO. No, not a soul.

Clem 00;23;17;18 - 00;23;22;17

No. On this planet. And no other word they like. Is it done yet? Let's go.

Kesley 00;23;22;23 - 00;23;26;19

Right. I'm calling to get my loan. Just tell me your rate and we'll move on.

Clem 00;23;27;17 - 00;23;29;11

That's it? Yeah.

Kesley 00;23;29;15 - 00;23;30;26

That's a green flag. To me.

Clem 00;23;30;29 - 00;23;32;15

It is a good green flag.

Kesley 00;23;32;15 - 00;23;34;13

Client Who knows that they're qualifiable

Clem 00;23;34;20 - 00;23;35;01

Yeah.

Kesley 00;23;35;05 - 00;23;36;04

Has done borrowing.

Clem 00;23;36;21 - 00;23;37;11

Previously.

Kesley 00;23;37;16 - 00;23;41;06

Absolutely generates a healthy income business is profitable.

Clem 00;23;42;02 - 00;23;45;06

Got equipment already financed equipment already.

Kesley 00;23;45;25 - 00;23;47;22

Yep so that's skin in the game.

Clem 00;23;47;26 - 00;23;49;16

Yeah we just helping them grow.

Kesley 00;23;50;12 - 00;24;08;04

The opportunity to get to do this podcast is pretty awesome. Yeah, but I think the coolest part about all of it and having real reps like us talk about these pain points and these different factors for clients who are really genuinely interested in lending and how to get into because it is tough. You know, we watch people struggle in it.

Kesley 00;24;08;16 - 00;24;14;24

I think that to see opportunity and doing this podcast and offering the information to clients is really awesome. And then our website.

Clem 00;24;15;12 - 00;24;17;09

It website got a ton of information out.

Kesley 00;24;17;10 - 00;24;21;01

Rob has really been juicin that website.

Clem 00;24;21;01 - 00;24;26;16

Yeah, so much information on that site you don't even have to call and talk to nobody. Go to our website and just learn.

Kesley 00;24;26;16 - 00;24;29;02

Right Section 179 articles.

Clem 00;24;29;04 - 00;24;37;22

More podcast than you can shake a stick at talking about just different scenarios wether it’s trucking or construction or towing or.

Kesley 00;24;37;25 - 00;24;57;00

From a real person. Yeah. Not someone trying to sell their company or sell their. No, their, you know, loans or who we are. Just a real person wanting to give the information. Because we work for a company that wants to see everybody eat. I think that's pretty incredible that we don't someone doesn't have to go and pay or pay some guru to give them the answers.

Kesley 00;24;57;00 - 00;25;02;06

You know, we'll give you all the answers in a two day to day program. Right. And we'll teach you how to get lending.

Clem 00;25;02;06 - 00;25;03;10

That’s right.

Kesley 00;25;03;10 - 00;25;05;29

It's right there in front of you. You spend 20 minutes in.

Clem 00;25;07;00 - 00;25;08;25

Smarterfinanceusa.com

Kesley 00;25;09;12 - 00;25;09;26

That's right.

Clem 00;25;10;04 - 00;25;20;25

That's that's that's where it’s at. Well it’s been great Hurricane Kesley. Look forward to doing this again. Nice to share some information with the people.

Kesley 00;25;21;05 - 00;25;24;29

Yeah. Yeah, like that. We'll give all our secrets. Yeah, Everything we know.

Clem 00;25;25;05 - 00;25;25;14

Yep.

Kesley 00;25;26;04 - 00;25;26;28

Keep them coming.

Clem 00;25;27;02 - 00;25;27;20

Keep em coming.

Kesley 00;25;27;23 - 00;25;30;10

Keep them coming. We party over here.

Clem 00;25;30;19 - 00;25;43;16

Yeah, We have a good time. We do Yeah, we do. Yeah, Alright until next time, Kesley

Rob 00;25;43;16 - 00;26;21;14

Thanks for watching. Or listening. If you're listening through a podcast app, we would love it if you would be so kind as to leave a review. If you are watching this on YouTube, it would mean the world to us if you left a comment or give us a big thumbs up. And lastly, if you're looking at us on the website, if you would let us know an episode that's of interest to you, that would be fantastic.