Introduction

A study by the Federal Reserve revealed that 50% of businesses face credit challenges when applying for financing. In this article, we'll clarify the credit analysis process and offer clear guidelines to help your business meet our credit score requirements, so you can secure the best equipment financing.

Importance of Credit Scores in Equipment Financing

A business credit score is a numerical representation of a company’s creditworthiness. It is based on various financial factors, including payment history, current debt levels, and overall financial stability.

How Credit Scores Affect Financing Options

Credit scores significantly impact the availability and terms of financing options. Higher credit scores typically result in better lease terms, including lower interest rates and options for longer repayment periods. Lower credit scores may lead to higher interest rates or even denial of credit.

General Business Credit Score Ranges and Their Meanings

• Excellent (80-100): Low-risk, favorable terms and rates.

• Good (70-79): Lower risk, generally favorable terms.

• Fair (50-69): Moderate risk, acceptable terms.

• Poor (40-49): Higher risk, less favorable terms.

• Very Poor (0-39): High risk, limited financing options.

Avtech Capital’s Credit Score Requirements

At Avtech Capital, we have specific requirements to ensure responsible lending:

• Paydex Score: We prefer scores over 60 but can consider scores close to this.

• Paynet Master Score: We generally look for scores above 650, indicating a solid payment history.

• Internal Scorecard: We aim for a score of 25, derived from various creditworthiness factors.

Request a free credit analysis here.

Our requirements vary depending on the type of financing. We also consider special factors, like higher-risk industries (restaurants, transportation, & energy) and younger businesses (less than 3 years old), which may need extra collateral or guarantees.

Alternatives to Traditional Credit-Based Financing

We understand that traditional credit models don't suit every business. At Avtech Capital, one of our key benefits is our flexibility in working with imperfect credit scores. Many of our customers come to us when their bank won't approve them for financing, and we strive to support them by addressing their unique equipment needs and credit situations. We can often offset credit score imperfections with enhancement points, providing a tailored solution for each business.

Enhancement Points

Enhancement Points help customers get approved for financing by adjusting the various aspects of the lease terms. These include:

• Down Payment Amount: Adjusting the initial payment can make the deal more favorable.

• Security Deposit: A larger deposit can reduce perceived risk.

• Additional Collateral: Offering more equipment or real estate as collateral can strengthen the application.

• Shorter Terms: Shortening the lease term can improve approval chances.

Conclusion

Understanding credit score requirements is essential for securing favorable equipment financing through Avtech Capital. For tips to improve your business credit, read 5 Ways to Get and Build Business Credit.

For more information or to begin the application process, contact our team today.

Contact Information

For personalized assistance, contact Avtech Capital at:

Phone: (801) 748-2200

Email: info@avtechcapital.com