You may be able to convert your equipment finance denials into approvals. This means more equipment sales. You may already be working with an equipment finance company. However, not all finance companies underwrite the same way. Underwriting, are guidelines which lenders use to make a credit decision. Some lenders are more strict than others, while other lenders are less strict. The reasoning behind being strict or not, depends on the risk level that a lender wants to assume. If you want us to review your denials, we can work with you. Contact us today: 888-505-5835
100% approval rate is unlikely
It's unlikely that your current lender approves 100% of the loan applications submitted for equipment financing. We know this because there is no lender that can approve 100% of all applications submitted. Where do you start off? First, you need to know what is the denial rate. Is it 20%, 30%, 50% or higher? What do you with those equipment loan denials? More than likely, they only have two options either leasing or a cash deal. In some cases, buyers may even get upset. Offering financing can be a delicate issue if it is not disclosed properly that an equipment loan is subject a a credit decision. And, a credit decision means that you will either be approved or denied. Rather, than losing a sale having a back up option is always a good idea.
What to do with denied applicants?
When buyers are denied with your existing equipment financing lender, you should have lenders that take on riskier deals. Think of car dealerships. They just don't work with one bank or finance company. They work with several for this reason. When the buyer is denied, they let them know that they have another finance company that may be able to approve them, but that the interest rate may be higher. This way they increase sales. As oppose to just letting the buyer walk away. In the end, these customers will be happy if they get approved and if they purchase their equipment from you. Having two to four lenders is important to your business and in selling more equipment. This way you may be able to convert your equipment finance deals into prospective buyers.
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