By: GreatAmerica on November 20th, 2023
7 Things to Consider When Getting Your Customer Credit Approved
Updated 11/20/23. Originally published 2/18/2018.
When you’ve put in countless hours of navigating your customer’s complex needs and finding the technology solution that will suit them best, the last thing you have time for is a credit approval process with any surprises. The credit approval process is one of the first steps in the financing process and in this post, we share seven things to consider before submitting your customer for credit approval. Reflecting on these seven items will help your approval process go as smoothly as possible.
1. The information that GreatAmerica needs to start the credit approval process
To begin our credit approval process, we need a few basic pieces of information for our underwriters:
- Your customer’s name, business address, and phone number
- Equipment description and funding amount
- Requested terms (i.e. length of agreement, lease type, etc.)
The underwriting process at GreatAmerica is imperative to the company’s success. Our process protects us which in return protects you and your customers.
2. What criteria is reviewed during the credit approval process
Applications are run through a series of automatic steps to verify the business details provided and generate a credit score for the business. Applications that are not automatically approved are reviewed by a credit analyst, who will consider the following criteria as a baseline, along with anything specifically warranted by the application:
- Tenure of the business
- Size/number of employees
- Industry segment
- Pay history
- Comparable credit
3. How long it takes for GreatAmerica to make a credit decision
We are usually able to have a decision back to you within an hour. Larger ($200k or more) or unique requests such as complex equipment (new to the market or limited scope of use) may take more time, but we will send you updates as we review the application.
4. When GreatAmerica does and doesn’t require guarantees
A credit guarantee is a risk sharing instrument for lenders and aims to improve flow of credit in borrower segments that may be perceived as risky by lenders. We may require guarantees when a customer’s business credit is weak, absent, or limited. We may also require guarantees for new businesses. The two types of guarantees we may require are a personal guarantee or a corporate guarantee.
For a personal guarantee the owner of the business signs as a guarantor, agreeing to make payments in the event that the business is unable to. We often require a review of a personal credit report for a personal guarantee.
For a corporate guarantee if there is common ownership between two businesses, we may ask that the more established business signs a corporate guarantee. The corporate guarantor agrees to make payments if the other business is unable to. This requires a satisfactory credit history of the business providing the guarantee.
5. What kind of financial information GreatAmerica may request
We may request financial statements on larger transactions. This provides our analysts with a view of where the company is financially, what potential risks are in their business, and how they are set up for future operations.
6. Any additional information GreatAmerica might need
Our analysts may need additional information when a company’s business credit is weak, absent, or limited. Some information that may be requested is:
- The company’s legal name and structure
- Bank statements
- Your pay history with the customer, if it’s an existing customer of yours
- Other references
If preferred, we can work directly with the customer to obtain any additional information we are requesting.
7. Credit approval expiration dates
Approvals expire after 60 days. Transactions must be resubmitted for approval after that time. We abide by this timeline due to potential changes in the economic results and environment impacting the end user, but also due to the ever-changing rate environment.
What if your customer isn’t credit approved?
Although our approval rating runs right around 80%, we unfortunately can’t approve every application. When the credit conditions warrant it, we will issue a decline. That may happen when there is a derogatory item reporting in the customer’s credit report (such as a past lease write off, bad debts, or large tax liens). In these instances, we can call and talk through the credit decision with you.
Our credit team builds upon the GreatAmerica Mission— “We help our Customers achieve greater success.” Our team is solution driven, tenacious and we look at the whole picture. At the end of day, we strive to make the credit approval for you and your potential customer a timely and simple step in the leasing process. If you’re confused by a decision or step in the process, please let your GreatAmerica team know and we’ll be happy to answer any questions you have.
GreatAmerica is the largest independent, family-owned national commercial equipment finance company in the U.S. and is dedicated to helping manufacturers, vendors, and dealers be more successful and keep their customers for a lifetime. GreatAmerica was established in Cedar Rapids, Iowa in 1992 and now has offices in Iowa, Georgia, Minnesota, and Illinois. In addition to financing, GreatAmerica offers innovative non-financial services to help our customers grow.