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Welcome To Capital Finance !
Welcome To Capital Finance !
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Capital Finance EQUIPMENT LEASING GUIDELINES Thank you for considering Capital Finance to assist you and your customers/prospects with their equipment leasing needs. Capital Finance was founded in 1987 for the purpose of assisting banks and their middle-market clients to obtain financing of all types at a reasonable cost. We are still dedicated to this mission and strive to provide you with quick, professional service. We have prepared these guidelines to assist you in working with us. While we can not foresee every possible situation, we do think, if you use these guidelines as a reference source, it will answer many of the most common questions. Our Market Niche - We are seeking to originate leases in the $2,000 to $250,000 range from qualified businesses, banks, vendors and lease brokers. The lessee will typically be a company that wishes to take advantage of the benefits of leasing but also includes one that fails to meet one or more aspects of the credit criteria of the other lease funders in the industry. This would include companies with minor credit problems, industries that may be restricted by other funders, those with insufficient bank balances, used equipment, new ownership situations, or any lessee that needs special consideration or terms. We do not; however, accept highly collateral dependent or substandard credits. As you move to larger funding amounts, we become increasingly less willing to stray from more traditional credit analysis. We are most interested in credits in the $2,000 to $250,000 range. How to Use Us: We provide lease financing for your business or customers that do not always meet established credit criteria of traditional lease funding sources. This allows us to fund leases that would normally be rejected. This is a powerful marketing tool for you. Now leasing is available to every qualified credit. Our rates reflect the risk of our lease purchases, you will find us very competitive in the under $5,000 FMV market; sometimes varying only a few dollars per month from the "A" lessor's pricing. How to Submit an Application: We prefer to get our applications by fax, (760) 776-9179. Do not send more than the application, bank and trade report sheets unless we ask you to do so. Please be aware that marginal handwriting becomes illegible when faxed so, if this is a problem for you, we suggest a typewritten application. It is permissible to use your own form as long as the following information is included: (a) The complete legal name, address, and phone number of the business; (b) What the business does, how long they have been in business, how long under current ownership, and whether it is a corporation, partnership or sole proprietor; (c) The names, home address, Social Security Numbers of all owners, partners, or shareholders over 10%; (d) Bank account information with a telephone number and three trade references with the account numbers and telephone numbers. (Please provide both the 800 number and regular number); (e) A complete description of the equipment including make, model and pricing breakdowns for each piece of equipment we are being asked to consider; (f) Vendor business name, complete address and telephone number; (g) Landlord name, address and phone number; (h) Any mitigating circumstances or explanations, especially if there is a past credit problem. A brief credit write-up is not required but is a real plus. Trouble Spots: Most applications give a complete picture and allow us to quickly act on your credit; however, sometimes the information provided needs clarification. The following are the most common errors: (a) Failure to include complete personal data on each significant owner or partner; (b) Leaving off a detailed description including price breakdowns of the equipment to be leased; (c) Forgetting to include the name, address, and phone number of the vendor; (d) Not disclosing the nature of the business and the time in business; (e) Failure to send us the bank, trade, and landlord information. Equipment and lndustry Restrictions: We are a credit based lessor and therefore have very few industry or equipment restrictions. What follows is our short list. When in doubt regarding equipment that will qualify for a lease, please consult us. Problem situations include: Tanning Beds Water Purifiers Vending Machines Water Coolers Software Only Pagers Small Furniture and Any equipment that does not lend itself to exact identification or has an extremely short economic life. Requests must match that typically used in the applicant's business. For example, we probably would not approve a request from a CPA firm for a pizza oven. We will usually make a credit decision on the application only if the lease request is under $5,000. There are times when we bend this rule of thumb on either side. Sometimes we will ask for additional information to get a better understanding of the lessee's financial situation and sometimes to verify certain information. Our goal is to approve any application if at all possible. To do this, we may sometimes ask for additional information. This is not intended to make things difficult; but an attempt to find every way to approve a request. Bank, Trade and Landlord References: The trade references must be from the largest suppliers. Unfortunately, a company using trade credit to the extent of millions of dollars per year can not be approved based upon a $100. high credit at the local stationery store. We will check references and material derogatory trades will cause an applicant to be rejected. Telephone Directory Assistance & Business Checking Account: The lease applicant must verify in telephone directory assistance under the business name or Trade Style. The applicant bank rating must be a commercial account under the business name and must not be a personal account. If the applicant does not have a business telephone and/or does not have a business checking account, then they are not in business. Special Considerations: We can make your transaction happen with a number of innovative lease structures. This is useful when the credit just will not support the request and the lessee is willing to look at possible solutions. Automatic Withdrawal (Direct Debit/ACH) of Lease Payments: We require this form of payment as a part of our credit approval. Sometimes less financially sophisticated lessees will balk at this because they don't understand the process. As you know, most banks will send a notice after the fact and all monthly bank statements reflect evidence of the payment. Before We Pay: Before we issue checks, we always verbally confirm the lease transaction into which we have agreed to enter. We ask about the lease, the vendor, the end of lease options, and other items germane to the lease. Documentation: Capital Finance documents must be used. Our lease documentation is straight forward and easy to complete. Most delays in funding center around an improperly prepared and signed document. You can prevent these delays by remembering a few simple rules: 1. No white outs of data or alterations of the terms of the lease are acceptable. Leases that are returned to us with terms and conditions altered will be rejected; 2. All signatures must have the printed name underneath; 3. We must have a photocopy of the driver's license for each person that signed the lease, personal guarantors, authorized signers and witnesses; 4. The legal name must be exact; refer to the credit approval form; 5. All equipment leased must be listed with the respective manufacturer, model number and serial number on both the lease document and the invoice; 6. We seem to get a few leases each month where somebody signs another's name. We reject these leases and will not reconsider them; 8. All dates should be the same or the lease date must be before the Personal Guaranty and Delivery & Acceptance. To start, we recommend that you have Capital Finance review your documents before and after they are signed to ensure accuracy of terms, signatures, titles, dates, etc. If we can assist you in picking up on common miscues before the originals reach our office, you will get paid quicker, cut down on stress, and make your vendor relationships more secure. Accurate documentation is essential; please take great care in this area and it will save each of us time, money, and bruised relationships. Personal Guarantors: We do not fund lease transactions without the personal guaranty of each individual that has a substantial interest (10% or more) in the business. The sole exception is for a well established public company. Security Deposits: We require the security deposit and other fees to be paid with a company check from the lessee. We do not accept checks from vendors on behalf of the lessee. The check submitted must be from the bank account listed and verified on the application and bank report. How We Pay: We pay the vendor's invoice on the day we have all properly executed documents and have made our verbal verifications. The vendor check will go directly to them. We take the following verification steps and if we have any reason whatsoever to believe that a transaction may not be appropriate we will reject it at any stage of the process, including the final checkout before funding. 1. We will call directory assistance for the lessee's place of business and call that business; 2. We will call directory assistance for the vendor and call the vendor; 3. We will carefully scrutinize the lease signatures; 4. We will not fund any transaction where the underlying equipment is more than 5% over the cost of the same equipment from our established sources. Some common application miscues we see are: (1) Listing the business as a partnership and then submitting only one name for the personal guarantor; (2) Listing the proposed equipment in such a manner that its impossible to ascertain what the collateral really is. For example, "Computer System ... $5,000; (3) Writing so small that we can't read. The way to approval is through a well prepared lease application. A neat application that provides all of the information we need to make a credit decision saves all of us time and money. A well thought out application also gives us the benefit of your knowledge. Incomplete applications increase both of our costs and invariably cause delays. Credit Criteria: What follows is an overview of our credit approval process. We depend a great deal on the national credit reports. While it may vary somewhat with each case, this will give you an insight into our decision making process. It will also give you a firm idea of what most likely will be accepted for purchase. Individual Credit Bureau reports reflecting a Score greater than 250, or a TRW score greater than 300; bankruptcy within the last 2 years; unpaid judgments or liens; chronic slow pay or loan defaults will cause an applicant to be rejected. Bankruptcies more than 2 years old; paid judgments and collection accounts and slow trade references will have the obvious deleterious effect on an application. Credit depth is very important as well as the amount of outstanding debt. It is highly unlikely that we will approve an applicant with all credit cards approaching the credit limit. It is equally unlikely that we will approve an applicant with little credit history. We may sometimes ask for additional information such as financial statements or tax returns before we decide on a credit. This additional information can clear up confusing or misunderstood aspects of the transaction. In the case of newer businesses, this information can give us an insight into the business acumen of the customer. The area of lease financing we provide sometimes requires a closer look at the prospective lessee in the way of additional information to verify data, confirm data, or generally get a better "feel" for the credit. We want to approve you so, if we ask for more information, please don't look on it as harassment. We are doing our best to find a way to make your transaction a reality. Available on Transactions $5,000 and Less Submission Requirements: 1) Complete lease application with bank and trade names and phone numbers. 2) Written credit-release if available as it is normally required for bank verification. 3) Exact equipment description, including make, model and item cost breakdown. Note: Applications with three or more leasing inquiries in the last 90 days may require additional time for review. Leasing inquiries will be called. In order to expedite the transaction, you may wish to call the inquiries yourself and forward the information. Upon Submission: An alternate CBR may be pulled. Capital Finance will analyze the CBR submitted and any additional bureaus requested (i.e. additional accounts, inquiries, and risk score factors). Capital Finance's credit department will then complete: - Directory Assistance checks on lessee and vendor. - Bank and trade reference calls. Leases with previous lease submissions may require additional time for review. The security deposit check must be written from the business checking account represented on the originally submitted application. The, lessee name, account number and bank name must correspond. FINAL CHECKLIST & LESSEE INFORMATION
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"Bonded and Licensed
California Commercial Finance Lender"
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