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, I share seven questions our credit team receives regarding our approval process to help make it as smooth as possible.
1. What information do you need?
To begin our underwriting process, we need a few basic pieces of information:
- Your customer’s name, business address, and phone number
- Equipment description and funding amount
- Requested terms (i.e. length of agreement, lease type, etc.)
2. What criteria do you look at?
Our credit team manually reviews every application we receive. A credit analyst primarily considers the following criteria:
- Tenure of the business
- Size/number of employees
- Industry segment
- Pay history
- Comparable credit
3. When will you have a decision made?
We are usually able to have a decision back to you within an hour. Larger or unique requests may take more time, but we will send you updates as we review the application.
4. Do you require guarantees?
We may require guarantees when a customer’s business credit is weak, absent, or limited. We may also require guarantees for new businesses. There are two types of guarantees we may require:
- 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.
- 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 in the event that the other business is unable to. This requires satisfactory credit history of the business providing the guarantee.
5. Do you require financial information?
We may request financial statements on larger transactions. This provides our analysts a broader understanding of the company’s operations and stability.
6. What other additional information might be needed?
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. Do credit approvals expire?
Approvals expire after 60 days. Transactions must be resubmitted for approval after that time.
Although our approval rating runs right around 85%, 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 solutions 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.
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