Questions? Feedback? powered by Olark live chat software Frequently Asked Questions – American Leasing & Financial

Frequently Asked Questions

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Are you a direct lender?

We have two companies – one is American Leasefund, Inc., and we are a direct lender in fourteen Western States. For customers who don’t fit in our in-house window, our other company American Leasing & Financial can place with private label funding programs at over two dozen lenders. These range from bank rate programs to standard commercial transactions, all the way up to structured or collateral-based transactions.

Can I buy from a private party?

Yes, for most of our programs, you can buy equipment from an auction, private party seller, or vendor. Our only requirement is that the transaction be ‘arm’s length.’ In other words, you can’t buy from your own brother or from another company you control an interest in.

Can you finance start-up companies?

Yes, we offer financing for start-ups and established businesses. With start-up companies, because there is no time in business or cash flow to hang your hat on, most credit decisions are based primarily on the personal credit of the applicants.

What kinds of equipment can you finance?
We finance equipment in a wide variety of industries including: medical, construction, logging, office, restaurant, trucking, manufacturing, agriculture, retail, and many others. We pride ourselves on making financing accessible on types of equipment conventionally excluded by our competitors.
Can you help me find equipment?

We normally don’t get involved in selecting equipment. We just pay for the equipment you choose. One way we can help is to get you a pre-qualification/pre-approval for a particular dollar amount, so that you can shop for the equipment you want and negotiate price with the confidence that you’re already approved.

Do I have to be a business?

Yes, all of our financing is commercial in nature. However, you don’t have to be a big enterprise to qualify as a business. Farmers can qualify as sole proprietors, as can many types of independent contractors. More importantly, if you’re not a business yet, you can start a business and qualify.

Do you offer leases or loans?

We offer both leases and equipment finance agreements. Even though you hear the term ‘lease’ thrown around, leases are just another vehicle to acquire the equipment.  All of our contracts, whether lease or finance, result in ownership of the equipment at the end.   There are benefits to both, and normally customers can choose with type of contract they prefer.

Do you offer unsecured loans?

Yes, we have access to working capital loans with no collateral requirements. These are based completely on business cash flow. For customers needing cash who have equipment they can pledge as collateral, we offer cash back loans based on the value of the collateral.

Do you have any age restrictions on equipment?

For most of our customer base, we can finance equipment of any age, make, and model. For certain kinds of long-haul trucking specialty programs, we require units newer than 2007.

How much of a down payment must I come up with?

Most of our programs require no down payment and need only the first and last payment on the contract. For example, on a 36 month term, you might have to come up with two payments upfront, leaving 34 remaining on the contract at the time of funding.

Is there any early payoff penalty on your contracts?

While we don’t have a surcharge or early payoff penalty, commercial contracts are non-cancellable. This means every contract begins from the standpoint that you’re responsible for all of the payments on the term. There are a couple of ways lenders in our space make this more competitive – 1) we always suggest that customers go with the shortest possible term they can stomach from a monthly payment standpoint, as this reduces the interest payback; 2) most of our programs offer discounts on the term for early payoff provided you have more than twelve payments remaining on the contract.

What are your credit requirements?

We have programs for all credit types – including bank rates for A and B credit customers and structured transactions for customers with challenged credit.

What are your interest rates?

Rates vary depending on credit, industry, strength of business cash flow, time in business, and other factors. The lowest buy rates on the market are between 5-9%, while middle of the road commercial rates tend to be just higher than those numbers.  However, it’s important to remember that commercial contracts are not structured with a principle and interest component, they’re set up as a stream of payments for a predetermined term length.

What do I need in order to apply?
In most cases, we can get started with just an application, although it is often handy to have access to three months of business bank statements.
Do you have a minimum transaction size?

We accept transactions of $5,000 or more.

What is the largest dollar amount transaction you can do?

We have completed transactions well in excess of $1.5 Million. We do not have a set ‘cap’ on dollar amount, although most of our transactions are between $15,000 and $125,000.

What is the difference between a lease and a finance agreement?
A commercial equipment lease is an agreement allowing a lessee to utilize equipment in exchange for making payments, while a finance agreement allows a borrower to pay back a set amount plus interest toward ownership of equipment. Often, lease agreements include a ‘residual’ offer that allows the lessee to purchase the equipment at the conclusion of the agreement for a small fraction of its original price.
What are the benefits to leasing, as opposed to financing equipment?

Leasing equipment affords numerous benefits over financing:

Reduces tax liability: companies are often able to deduct lease payments as a business expense.

100% financing: A lease can cover the full cost of equipment, including hidden costs like shipping/freight, accessories, installation, taxes, and staff training.

Protects credit leverage: Because lease payments are not reported to the major credit bureaus, lessees are able to use their equipment while retaining access to their ability to borrow for other purposes.

Ability to upgrade: Lease agreements don’t tie you down to a piece of equipment, meaning you can upgrade as necessary over the course of conducting business.

Applied down payments: advance payments are applied toward lease payments, resulting in true “no money down” financing.

Protects ownership: We don’t take an equity position in your company, only in the equipment which prevents ownership from being diluted.

What are your credit criteria?
Because we offer both in-house funding and access to our lender-partners, we are able to work with people ranging from fair to excellent credit. What’s more, we review candidates for our in-house funding manually, meaning we consider applicants as a complete package instead of simply on the basis of their credit score.
What industries do you work with?

We finance equipment in a wide variety of industries including: medical, construction, logging, office, restaurant, trucking, manufacturing, agriculture, retail, and many others. We pride ourselves on making financing accessible to industries conventionally excluded by our competitors.

I have credit issues. Can you still help?

We are one of very few lenders in the market that structure transactions for customers with credit challenges. This means we are often able to use some combination of cosigners, additional collateral, or larger down payments to make tougher deals work. We even offer credit consulting services to clean up incorrect credit reporting and increase your odds of qualifying for our better programs!

What are some other questions commonly asked by your customers?

We’re glad you asked!  In fact, we’ve prepared a brochure with 10 Questions every customer should be asking their equipment finance company.