The Power of Leverage: Funding Options for Heavy Machinery

Leveraging the right funding options is crucial when investing in heavy machinery.

With the right financial strategy, you can maximize your purchasing power. 

In this episode, finance experts Anthony Alvarez and Alex Jackson break down the best funding options for heavy machinery.

Whether you’re expanding your fleet or upgrading your equipment, tune in to learn how to effectively leverage funding options to drive your business forward.

Transcript

Hello, and welcome to episode five of the smarter equipment finance podcast.

My name is Anthony Alvarez, and today, I am sitting with Alex Jackson.

And both of us are account managers here at Smarter Equipment Finance.

And today on episode five, we would like to discuss the power of leveraging when it comes to purchasing heavy machinery. The use of heavy machinery has a long history. In fact, going as far back to ancient Rome.

Yeah. It does have a long history. I was just reading that the pile driver was invented in the fifteen hundreds.

In fact, the use of heavy equipment goes all the way back to ancient Rome. And all the way back to, in fact, the first century.

Yeah. I was actually just reading that the pile driver was invented in the fifteen hundreds.

With that said, I think heavy equipment's been around for quite some time.

I mean, there's some major stones that have been moved throughout the, throughout, these different centuries. And if you look at some of these ancient cities that are still standing today, heavy equipment made that happen. Obviously, it was powered by man. Right?

Mhmm. Yeah.

And they had to go ahead and leverage They did.

Leverage their strength with, with machinery, but that's how they were able to get it done back in ancient Rome. Now in current days, it's not the same. In fact, you could take a articulated dump.

I don't even think we could go ahead and stack both of us and reach the height of a tire.

Some of these things in in, say, the mining world or construction world, these machines are just massive. Right?

Along with that being massive, they also have a very, very, very large either burden, planning, or execution plan when it comes to purchasing these these assets. And the reason is because of the cost.

Cost is not the standard when it comes to these larger machineries.

Pretty pretty expensive.

Right? Yeah. In fact, our standard deal of a semi truck for about eighty thousand dollars is out the door when talking about this type of, equipment. Although you're gonna use the same principles to leverage your information for financing, we're talking about heavy machinery today. And because of the size of the cost, why you should plan appropriately.

And how to plan appropriately.

And how to plan appropriately.

Why is heavy machinery a strong investment for the business? And what are some things to look out for?

So when when planning to make a a large purchase like this, you wanna leverage your past to acquire your future. What I mean by that is your past credit history, your past financial history, as well as your past business performance.

You take that information and you leverage it. Correct? Oh, yeah. You leverage it against a loan for a piece of equipment. And the reason that you do that is you have to start planning for these purchases early, especially when we're talking about assets for five to say five hundred thousand to a million dollars to two point eight million. Right?

And the reason that you wanna plan for these because these capital investments are what? They're huge.

Very big.

Yeah.

So it's not like you could take a million dollar asset and just automatically find a way to pay for it just on paper without the performance of jobs being lined up. Right?

Correct. Yeah.

So number one, we have to establish the need.

Yeah.

Yeah. Is there a need for this equipment?

Exactly. Expecting a lender just to lend out that kind of money for such a expensive piece of equipment is very unlikely. So we gotta prepare for that.

Absolutely. Yeah. What are some of the things that we're gonna look at while see, what are some things that we can take a look at with a client to prepare?

Well, some, obviously, bank statements is gonna be the biggest thing. Honest.

Why though? Why why are bank statements so so key?

Well, bank statements are very important because they wanna see that you have some capital, some skin in the game. Also, they wanna see what kind of money you're already generating month to month. So we wanna see good deposits. We wanna see good ending balances. We wanna see a good just flow of a very average structure of money kind of flowing in.

So you you said something that was really really key to me. So balances.

Yeah. Why are balances so important?

Well, it it just shows how your business operates. And and when you say balances, are we talking, like, ending balances or just Ending balances. Ending balances. So ending balances is important because it's you typically at the end of the month is usually depending on what industry you're in.

Most of your money is coming out. Right? Paying your employees, getting paid for your jobs. I understand sometimes things roll over in the next month, but it's a really good indicator on where you're gonna sit at as far as net profit at at the end of a month.

You know, it's funny. I I I think of a story. We we work with a a dealer out in North Carolina who had a client back in December that we had helped.

But when I had asked the the client's wife, how long have you been preparing for this purchase?

And the client had told me they had been in preparation for this for well over six months. Oh, The the drill itself was a one point two million dollar drill, one point one million dollar drill, and they wanted to cap reduce that purchase by three hundred thousand dollars. So what they were doing is they came in with excellent credit, by the way.

Credit and when we speak credit, we're talking personal credit as well as business credit. So for those that are unfamiliar where business credit could be, say, found, you have Paydex, you have Dun and Bradstreet, you have what we use in our industry, PayNet. Mhmm. And it's critical. If you're if you're PayNet, if your commercial credit is not in order and you were going for a capital purchase upwards the amount of three hundred and fifty, five hundred thousand, seven hundred thousand, those balances are gonna come into play. Right?

Oh, absolutely. Yeah. Yeah. Yeah. When it gets more expensive, most lenders are always in a request bank statements. You're asking for a lot of money regardless if you have eight hundred credit.

So if I'm going to a bank because I need money, why do I need money in my in my account?

Well, that's a really good question. I mean, the whole point of financing is to save yourself some capital. I mean, the way that I look at it and how I explain to all my clients as well is equipment. You wanna kinda treat it like an employee.

You know, you wanna pay it as it pays you. You don't hire somebody and just give them their full years of salary. They haven't worked yet. We don't even know if they're gonna work out.

Yep. So we wanna make sure that we're investing into something. Also, when you talk about commercial credit, we could talk about the tax advantages of section one seventy nine, exercising that. And, again, it's for your business.

So why would you ever wanna remove all your capital? You wanna save that money for investing into new employees, other equipment, maybe new location, whatever the case might be, you always wanna invest that anywhere else you can. The less money you can put out, the more you're gonna make.

Another good point. Because as you're preparing to, say, leverage your information for a loan, there are some things that we have to go ahead and do on our end as clients or business owners.

We've touched on the bank statement.

So it's important to so to show steady cash coming in Yeah.

Good healthy balances. I know in some cases, we've recommended anywhere from twenty to thirty percent of the value of what it is that you wanna purchase to be in the account.

So that way you are leveraging your balance in a sense. To say, hey. I have thirty percent of the value of this asset.

By putting ten percent down, I'm still left with the remaining twenty percent of the value of the equipment. So if we wanna use simple math, on a hundred thousand dollar piece of equipment, ideally, we would wanna see thirty thousand in the bank. Correct.

Yeah.

Right?

Absolutely. I mean, it's always good to be safe. I mean, especially when it comes to startups. We'll talk about that a little bit later.

But, I would say twenty to thirty percent of whatever you're asking is very safe. They're because they could come back with a down payment. They may not. But if they do and you wanna get an approved, you're gonna wanna have thirty percent of the bank.

Again, you kinda mentioned it's for the down payment, but they also don't wanna take all your money. They wanna make sure that you have money left over for anything else, whether it's payments, insurance.

I love what you just said because operational cost Yeah. After the purchase, the lender wants to make sure that you can continue without any what?

Issues. Not paying, defaulting, maybe thinking this was a bad decision. Yeah. No. We wanna make sure that we're here to set everybody up for success. We're here not to put businesses under, but to help them expand and provide other jobs for this economy as well.

Now now as you're preparing to leverage your your business and your credit and your banking to come in for a loan, would it be wise for someone to take a look at their own personal credit? And the reason that I bring this up, how many times have we pulled credit and there's, like, a five hundred and fifty four dollar medical bill?

Absolutely. It's very important to know where you stand. I mean, sometimes sure. You've experienced as well as I have.

There's been clients like, yeah. I've got, you know, seven hundred credit in which granted, you know, their credit may not be too off, but they may have a collection or they may have a past due that they're unaware of. Yep. And they're like, what the heck?

I thought I paid that. I can't tell you how many times I've had that. They'll go back. They'll get a letter.

We'll get it situated. And maybe in a month or so when it falls off, we can move forward with the process. But a lot of times, it's very good to prepare whether it's just like an Experian app. Just figure out where your score is.

Figure out what your credit, lines are looking like if you have inquiries or if you have any collections that need to be paid and taken care of.

I almost imagine what you just said, like somebody's riding a ten speed down a hill going thirty miles an hour on this ten speed, but that tiny little pebble in the road can throw everything off.

It's funny because I recently was in a situation where the both the, dealer and the customer were frustrated because the lender wasn't willing to approve them when they had really good credit. They had a lot of money in the bank, but they had a few past due, accounts that they just didn't pay. And the problem with that is it shows negligence, a lack of responsibility. You know, and I get it. Business owners are busy, but they also need to be on top of their stuff.

No. That's a So very, very good point. Yeah. So as they're as they're preparing it to say leverage all this information to acquire this loan for this heavy equipment, we've touched on, number one, taking a look at your credit. Making making sure that your own personal matters and affairs are in order and that you're aware of what's on your credit.

Your commercial credit.

What I've recommended to clients is log in to PayNet. Yeah. See what lenders are saying about you. And the reason I think it's so important is I've run across business owners that had a misconception that they had a ten day grace period on a commercial loan.

Oh, yeah. That's a big misconception with commercial. Yeah.

It's a big misconception because where do we find the information showing that that was incorrect?

That would be pay net.

So we'll be able to see if they've been late now kind of go going back a little bit to what you were talking about. A lot of people are used to, you know, credit cards, auto loans, home mortgages, whatever the case might be. If you're late, you've got a a good grace period. With commercial financing, it's or commercial loans, I should say, one day.

One day thirty days. Yeah. Yeah. Day one.

It's one through thirty.

Yeah. And so for those of you that are that are kind of learning this and, what we're talking about, personal credit, your lates are gauged after a thirty day period.

In the commercial world, your lates are gauged beginning the first day that payment is late. There are no grace periods. Yeah. You have to be on top of these things. I recommend that all clients put all of their payments on automatic debit.

Absolutely. Keep them that way.

Absolutely. Especially, if you're a guy or a gal who didn't have that done and you have some uh-ohs or oopsies on your commercial credit, it's best to get those those those trade lines all all on automatic payment, run current for a minimum of say two to three months showing a positive trend in payment history.

That way, because of a lot of our lenders are story based, we may be able to prove that the person had a misunderstanding or a misconception about credit, and the payments were just being sent two to three days late. We might be able to help clarify that for a lender, but without the effort of straightening out the payments Mhmm. Before you leverage your business for a loan, it could end up being a big waste of time if you're not prepared.

It can be. Honestly, I actually wanna share a story with you because this even caught me really dumbfounded. I had this gentleman.

He had been operating a business for, like, twenty five years, literally, on secretary of state, twenty five years in California.

They generate a ton of revenue. I mean, like, a million a month. And the issue was they're paying it. Horrible. That I don't know who was handling the accounting or who was handling the payments, laid on everything.

Just tons of lates to put it, say the least. All I was asking for was a thirty thousand dollar vehicle. I couldn't get it approved anywhere. So just to kind of really, like, emphasize on how important those payments really are, doesn't matter how good your personal credit is. If they pull a payment and they see your commercial payments are horrible, they're just they don't wanna even attach it. They don't wanna deal with it. So, yeah, it's very important.

It it just jogged my memory. I had a transaction last month.

I have two a paper owners.

And I mean a paper, beautiful credit.

The commercial credit on the other hand, there was a misconception by the ownership there where they thought that commercial credit is gonna report late after thirty days. So with payments being due on a vehicle roughly around the fifteenth to the twentieth, they were making the payments on the twenty fifth of every month.

So on a brand new trade line of eleven months, brand new Late every month.

They've been late ten of those eleven months.

And just just to hear the the client's voice and the frustration. Like, they've worked their whole life their whole life, Alex, to acquire that credit. Yeah. And then they've been in business since two thousand sixteen not knowing how credit is reported commercially.

And just like your client, their personal credit and their commercial credit are giving two different perceptions to a lender. Mhmm.

By the grace of God, we were able to help the client on two of the three items that he was looking for.

But I had to go back to the client and stress to the client.

It's time to go ahead and start preparing to leverage yourself better in the future.

So with that being said, what is it that we need? When we wanna come to the table, what are some things that we are gonna ask for when applying?

So when we first start applying, what we're gonna need, depending on what the equipment is and how much it is, it's always a good idea. First off, we're gonna need to soft pull the credit. So we're gonna need social, obviously, a little basic personal information.

Can I ask you what what's a soft pull?

So soft pull is exactly what it sounds like. It's just not a hard inquiry. So what we do is we evaluate the credit. We evaluate the person first.

Right? We're not gonna do a hard pull on you if we don't even know if we can help you. It's just a waste of time, and we don't wanna hurt your credit. So we do a soft pull, evaluate the credit, see what's on there, confirm the time of business, whether it's through the secretary of state or if you're sole proprietor, then we'll ask for the furthest back tax returns that we can get that you can provide for us.

Time in business, credit, then bank statements, especially if it's a bigger piece of equipment, bigger ticket price. We're gonna definitely wanna see some money in the bank. If it's not, then maybe not. Maybe credit app, signed credit app will need driver's license and just a few questions, stories.

Very simple. It's I think there's also a misconception on, like, acquiring financing as well. It's not as disheartening or difficult. Like, people think it's very simple.

And I think that we do a very good job of making everybody feel that way as well.

An app process with a soft check, not affecting credit, very important because we wanna keep credit, we wanna keep credit, right where we found it. Mhmm. On top of that, maybe some bank statements, a story Yeah. Things of this nature. So these are some things that you can start to do or prepare for when you're getting ready to make the move to leverage your business and looking for, financing.

Absolutely.

What are what are some of my so I'm gonna ask this a little bit different. I know that there are different there's different variations of lending such as an FMV lease or leases or loans or collateralized loans. But what are some of the what are some other ideas that you have on what's available to people when they wanna come and ask for a loan? What what kind of products are they gonna run into?

Well, they're gonna run oh, there's a lot of them. There there there really is a lot of them. I mean, dollar buyouts, balloon payments, all that fun stuff. We primarily focus on EFAs, corporate finance agreements, and these are great because they bridge the gap between a lease and a loan, getting a fixed payment. You're also getting the tax advantages of being able to write it off as well, through, like, section one seventy nine, for example.

I mean, there's you know, a lot of these lenders offer early buyouts. It's gonna what's gonna report to your commercial credit, this is also a big one for me, is say you're getting a loan or a vehicle for fifty thousand, say they have finance charges of twenty thousand for seventy thousand, what actually is gonna get reported onto your your pay net is gonna be the seventy thousand regardless if you pay it off early. So say you paid off in the first year and you end up only paying fifty five thousand, you're gonna get credit for the full seventy thousand. For me, that's huge because that's gonna help any business in the future on additional financing. Just huge.

So, again, I circle back to what we're talking about with commercial credit and and what you just brought up.

As far as that payment history, you wanna make sure that you're not going to the well for the very first time on a million dollar loan when you have zero zero comparable credit. Yeah. Comparable credit is is when you are getting beat when you're preparing yourself to say leverage your history for an asset that you need to borrow money for, it's critical that lenders see what you've done in your past on those items.

So if I'm a cash buyer, should I just keep buying cash if I'm gonna eventually need the finance? Or what is it what should I do as a business owner?

Oh, Oh, you definitely wanna acquire some sort of financing.

Even if it's small, Even if it's small, whether it's a small auto loan or maybe even credit cards.

But, I mean, credit cards are only gonna go so far. You really need to get some, like, financing on some secured installment loans, whether it's a piece of equipment, a vehicle, something. Even honestly, even as far as just getting that on your personal credit will help. I mean, obviously, the idea here is to separate the business and the personal life. That's the whole point of the establishing a business, putting everything on that, and building commercial credit. But you wanna have something comparable that's very important in the, loan industry for, financing.

So it's it's I think what we've come out come down to is we've if we had some highlights on preparation of leveraging yourself, your business, your history, we wanna talk about getting your bank statements prepared. Right? Yeah. Wanting to make sure that all of your financial information is solid.

If you're going for large assets, you gotta start getting your taxes ready. You gotta start getting p and l's ready. Mhmm. You have to start getting balance sheets ready.

You may even have to start going ahead and working on a personal financial statement to get prepared for these things.

Oh, yeah.

But your history, your past is what you're basically leveraging for your future. Oh, absolutely. I mean, throughout this entire discussion, it seems as though we keep falling on what someone has done versus on what they can do.

Oh, yeah.

In other words, banks don't sit there and say, well, we're gonna leverage the fact that you can make a million dollars with this piece of equipment in hopes that you pay. No. No. What they will say is, you have over a million dollars in commercial loans that are very well paid. We feel comfortable extending you this credit because of your past.

Absolutely. Correct? Absolutely.

Same thing with bank statements. Yep. Okay.

Good. And, something I kinda wanna touch on too just to give some clarity because some people may not really know what comparable debt is or what that means. And so what banks and lenders look for is if you're asking for a hundred thousand dollar piece of equipment, they like to see that you have a secured installment loan. This would be comparable debt of fifty thousand. Fifty percent of the ask amount.

So fifty percent of the ask amount?

Yeah. And they wanna see at least twelve months of perfect payments on it. Some lenders even go as far as twenty four, but a majority are twelve. So if you yeah.

I like okay. So this is another good point. If I if I have a three year plan as a business owner to grow, these are some of the things that I need to start thinking of. Right?

Absolutely.

Yeah. I take down a smaller asset, maybe a dump truck for about fifty k, knowing I need to eventually get to a borrowing power of three hundred thousand dollars Yep. Right Yeah. Over the next three years. Mhmm. So it it would be reasonable to say, in year one, I wanna take down something for about fifty. In year two, maybe I I snuck in there at about one twenty five, a hundred, one fifty.

Yep.

And then in year three, because of the trade lines reporting for over twelve months, and now I have two comparable purchases, I'm leveraging my past to secure my future.

Absolutely. Yeah. One thing that I also wanna kinda talk about too is the credit score. So and the reason I'm bringing this up is because a lot of people will reach out to us and make, oh, man.

I got a seven hundred fifty credit score. Beautiful. Let me take a look at it. Take a look at it.

There's only three trade lines. So the issue is a lot of people get the misconception that credit score is everything. Credit score is something, but it's more of the story behind the score that's giving us that score.

Wow. Wow. That and, I mean, you just you just you probably capped on one of the you probably touched on one of the main frustrations I had in my first year in this industry.

I would get some people that would call in. I have a seven twenty eight.

Absolutely, he does. But he has one credit card from Kohl's, a gas card. And again, it's just some people just don't like to utilize credit. So they I get it. Yeah. So when they do secure credit, they're very confident in the number because they think it's the score that's getting them what they want when it's truly the history.

The history of the score.

Yeah. The history of the score. Good. That's that's really intriguing.

Yeah. So it's very important because especially if there's anybody that is, like, thinking about starting or maybe they're already in the process of starting, it's good to even sometimes just reach out to us if they have a few questions on how we can kind of prepare them for the future. I do that all the time with clients if I can help them, what I can do. So, you know, you want trade lines minimum five to seven. Wanna build up the score. If you can get comparable debts, secured installment loans, auto loans are most common for that.

How long do those need to run run for for lenders?

For the auto loans, twelve months. Twelve months? Twelve months? Twelve twenty four. So even when you're, like, first getting a commercial loan, it's always a good idea to plan on paying it off early, which I recommend everybody to do.

But you wanna at least make payments twelve to twenty four months to build that credibility for the future.

So if I if if I know I'm gonna need to, say, leverage my business and my history for an asset six months from now, and I'm currently in a loan for seven months, and that loan is fifty percent of the ask that I need in in the next six months, should I keep this loan for at least twelve months, or should I pay it off at seven months so that lenders say, wow. He borrowed money and he paid back fast.

No. You wanna you wanna at least be paying under the minimum of twelve months so you can establish that comparable credit so so that banks and the lenders can see that and feel comfortable and confident doing that. If you pay it off too early, it's just not a it's not long enough for them to feel comfortable giving a loan for five years. I mean, if you're paying off in seven months, they don't they can't really tell how great your payment history is and how responsible you are on the payments. I had a gentleman reach out to me, and, I mean, this guy had immaculate credit. Time in business, I mean, we're talking twenty five years, makes a lot of money.

Bank statements were also outstanding.

So when it comes to something like that, we are especially from someone like Ditch Witch, which I've established a pretty good relationship with them. But, we we are gonna kind of get into the the territory of manufacturer, you know, rates and approvals and things of that nature. So you've really got to be careful in what we what kind of the way we execute it. And so this gentleman, I ended up getting a amazing approval.

I mean, we're talking he had a five point six percent simple rate. I mean, this is you don't get better than that. And he he absolutely loved it. But more importantly, he loved the how upfront and real I was, how transparent.

There was no BS. No, you know, beating around the bush. He understood everything, what it was, what it entailed, and he was very happy with the whole transaction in general. So I do think though sometimes clients may be able to get better, slightly better approvals or rates, if you will. It's more on the person you're working with and how comfortable and confident they feel with you and just building a relationship.

I mean, I too had one recently, and it came from an RPO.

Oh, really? Yeah. Oh, okay. A rental purchase option.

And this is a great example of leveraging, you know, your business for the future, if you will, and prep preparing to leverage even more to acquire more in the future.

I couldn't help a gentleman that I had met through one of my drill manufacturers two years ago.

He popped back up and had been working with one of the vendors that I had been calling on for a couple years, and the client was in an RPO. The RPO was three hundred and seventy seven thousand. He was paying fourteen thousand dollars a month for fourteen months.

On the RPO structure, he had approximately ten thousand in change going towards his purchase in the future.

This is the art of leveraging. And the reason he mastered that, although it wasn't a finance situation in his case to begin with, it was to seek finance in the future, which is the way we began this podcast.

Yeah. Absolutely.

And you wanna prepare. So in this case, this gentleman turned around and he rented this drill rig for fourteen thousand dollars a month.

He got to the fourteenth month. I took him into a lender, seventy two months, single digit, you know, deal, early payoff option.

He got all the bills and wisdom similar to your Very similar.

Absolutely.

And what I the reason I wanted to bring up this story is you said something when you were talking manufacturer financing. Yeah. Sometimes as great as you are, manufacturer financing may decline. Yeah.

Their tiers may be structured differently, or maybe it's they're just looking to to only finance at this, say, level, if there are levels, if you will. And the reason that I bring this up is he could not believe the deal he got through me. And I know your client couldn't believe it because your your rep called you back on how great of a deal it was. Yeah.

And I think these are two great examples of how customers have prepped to leverage themselves to continuously grow. In other words, they have protected the hive. No matter what, their banks are in order, their credit is in order, their commercial credit is in order, their story makes sense.

Yeah. You know, and, it may not be true for everybody, but from my experiences with manufacturers, most of the time, they don't even report to commercial credit. So a lot of that's kind of a conversation I have as well. I mean, if it comes up, but commercial credit is very important. To my understanding, most manufacturers don't usually typically report to commercial credit.

So You know, I've run across something similar, and I've always said to people, when you finance through me, you're you're you realize you're it's not just about the money or the equipment. It's about the credibility.

Yeah.

You're trading. You're you are leveraging your past history for credibility. Mhmm. That credibility now affords you even more growth.

So if you wanna grow as an owner, what we are saying is you have to be cognizant of your personal credit, your commercial credit.

Your planning has to be in line with what is reporting.

And when you are getting ready to go to the well and ask for a loan, it's imperative that you are prepared.

We run across cases time and time again where people come in slightly ill prepared. And listen, we could still help. Oh, yeah. Well, good. Then sometimes the terms don't actually meet the expectations.

And we pride ourselves on the satisfaction rating of our clientele. In fact, we we we live on it. I mean, think about it. Like, our reviews to us are just like a paycheck, it seems, because the the the excitement or recognition that someone acknowledges the time that you put in to educate them on business credit Yeah. To help them leverage themselves further in the future to acquire the assets that they need. I feel like I make friends more than I make clients.

Oh, yeah. Absolutely. I'm gonna kinda backtrack a little bit on what you were saying, which I agree a ton with is, you know, come prepared best. But if you don't, we'll help you. We'll help guide you in that direction. We're your advocate.

What kind of pitfalls are are involved in preparing for this? And and how could they circumvent those pitfalls?

And I think we've and now that I'm saying this, I guess I've actually answered the question because in a sense, it would be a blind eye to your credit. Yeah. That's a pitfall. Right? Not preparing.

Not preparing. Much. Yeah.

Not evaluating what you're gonna make. Yeah.

There are some times when you go to a lender, if you are unaware of what that asset is gonna generate for your business as good as you sound, there's some lenders that'll pull back and they'll they'll remove they will not finance you Yeah.

Because the story doesn't make sense.

Yeah. Not everything is adding up. I mean, as far as pitfalls, that's pretty much it blows down to is maybe just not being educated on it, and that's that's completely fine. I wouldn't expect almost any business owner to really understand the financing world and what they need.

But they should reach out to somebody, even us, Smarter Co owner Finance. We'll be more than happy to guide in the direction. We're not here just to, you know, finance that moment. We're there to help prepare them for financing in the future.

I think a lot of the pitfalls can be avoided with the type of relationship that you offer people. Mhmm. Not every transaction I wanna be clear. Not every transaction is gonna be completed within a day or two. No. Not every transaction will be done within five to ten days.

And in some cases, we need to help a customer examine their their their leverage power at the time. We need to help them examine what their credit looks like, what's reporting on their commercial side. So having an advocate like Alex can be the determining factor of whether or not you're able to leverage your history to acquire a finance loan.

Yeah. And there's, I mean, there's even situations where I'll be in room. I'm like, yeah. I can help you.

I was like, but can I be honest with you for a second? If I was in your situation and with the knowledge that I have, I would wait. I would wait a month, and what I would do is I would get your credit availability up a little bit more. You're saying about thirty five percent.

Let's try and get it to, like, sixty seven, pay some credit cards off, maybe pay a few more auto loans to get the credit up a little bit. You know? Again, we can help you, but I want to try and secure the best approval possible. Because sometimes, what you wanna focus on is the future, not the present.

And I think a lot of people get held up on that is what you wanna focus on. These these loans are gonna go for four or five years. If we can get you a better approval in a couple months, it'll be more worthwhile. However, just depends because if the equipment's really that vital in that moment in time and it's gonna generate you thirty to fifty thousand dollars because you got a contract lined up that you just can't wait another week for, oh, then, yeah.

I mean, of course, we could probably get you into something, but it's always you wanna, like, weigh out all options.

Two two last points I'd like to make. One of them regarding the the the importance of leveraging history Mhmm. When you're a start up. When you're a start up, you and I both know.

And when I started, I was here a little before you. And when I started, it was a little easier to get a start up done. And then we had this, little weird thing take place called COVID. Oh, yeah.

God. Yeah. Everything went out of whack. Yeah. And for a startup business owner, things became, since COVID, four times harder than it ever was before.

But it's also based on, you know, scrutinizing the history of the performance of startups. Right? Yeah. So the importance of preparing to leverage your history for a loan or to purchase a major asset, proper planning, credit, all of these things have to be accounted for.

But how much are you going to make with that? Do you have contracts lined up? And if you are a start up, do you have everything it takes?

What I would suggest is if you are a start up and you are looking to acquire any form of commercial lending, I would give Alex Jackson a call. Alex has been here now for well over a year, and I have to say he has won the ear of many different vendors and clients based on his dedication.

Again, my name is Anthony Alvarez with Smarter Equipment Finance with Alex Jackson, and I just wanna thank you all for listening, learning, and participating.

And, Alex, would you like to close with anything?

You know what? If you would like to, you can always go to our website, and you can apply as well, and one of us will reach out to you.

Absolutely. Thank you so much for participating, and we look forward to being a source of information for you in the future.