If you are a small business owner with a good FICO score and a steady stream of cash flows, you likely won’t find it hard getting financing for your equipment. However, if you are a business with bad credit or weak cash flows, getting your hands on important equipment is challenging.
Why? Well, as mentioned, they have a bad credit score and that doesn’t work for a lot of financers out there. In this case, what should such a business do? Or even if a startup has just started and hasn't established steady revenue flow, where does such a startup go to finance the equipment it needs?
These are important questions and you are likely to be searching for answers if you are a small business owner with similar problems. Well! The days of your inability to finance the equipment you need are over. Because we have got just the right lender for you who will address all these needs without prodding you for a high credit score.
Pawnee Leasing Corporation has been a lender acting as a financer since 1982. In this article, we will give you all the details you need to get financing from Pawnee Leasing. Moreover, we will also give you a thorough review of the interest rates and terms that will be a part of your agreement so that you can make the right decision for your business.
Pawnee Leasing Corporation is a small ticket leasing company that caters to the needs of startups and small businesses. The company was established in 1982 and has since expanded its business to over 50 US states.
One of the best things about Pawnee is that it provides financing for all its customers regardless of their credit history. Pawnee Leasing Corporation helps businesses purchase crucial equipment by providing loans that start from $1,000 and go up to $350,000.
Pawnee Leasing is the only business in the industry that also incorporates the financing needs of startups. The company has financed many new companies and has cemented its reputation for helping businesses address their cash flow difficulties.
In 2006, Pawnee Leasing Corporation became a subsidiary of Chesswood Group Limited. Chesswood Group Limited (TSX:CHW) is a public company headquartered in Toronto, Canada.
Pawnee Leasing Corporation is a well-established lender with many years of experience in the lending industry; the company finances new as well as the old equipment. In addition, the repayment schedule of the company is also pretty flexible.
The lease term usually ranges from anywhere between 12 to 72 months. Similarly, it takes only a few hours for the company to finalize your application for equipment financing.
Financing equipment is a major part of keeping the business competitive. However, if your business is facing cash flow difficulties, then you might need to look for alternate options to get the much-needed equipment for your business. Pawnee Leasing finances several businesses to address these needs and make budgeting easier for you. These include businesses that mainly operate in the software and medical industry.
Moreover, the company also finances all other businesses that don't come under the umbrella of its prohibited businesses. Pawnee Leasing Corporation has given another incentive to such businesses. These businesses—that don't come under the list of prohibited businesses/industries—will get financing even if they have a B or C type credit.
The only downside of Pawnee Leasing is that it has an extensive list of prohibited businesses that will not get financing. Similarly, A-type creditors have been barred from getting loans due to the pandemic. The list of Pawnee Leasing prohibited businesses include:
- Any home-based business
- Carpet cleaning
- Long transportation
- Event planning
- Oil and gas
- Alternative medical equipment
- Real estate agent/Broker
- Tattoo/Body piercing
- Adult Entertainment
- Alternative/Discretionary medical- businesses
Nevertheless, the financing differs on a case-by-case basis. Even if you come under the prohibited businesses sections, you can still apply for financing at Pawnee Leasing Corporation. The decision to finance or not to do so rests with the company.
“Pawnee is one of the only lenders in the industry that helps startups to get their much-needed equipment”
Who Should Apply For Commercial Truck/Equipment Financing With Pawnee Leasing Corporation?
Pawnee Leasing Corporation works with customers from diverse industries. As said earlier, it is one of the only lenders in the industry that helps even startups to get their much-needed equipment. But there are three main types of customers of this brand: Independent brokers who want to lease equipment, Dealers or manufacturers of equipment, and small businesses or startups facing credit difficulties.
Equipment Leasing Broker
Pawnee Leasing Corporation goes out of its way to ensure that all the brokers who work with it can finance their customers. Even if a broker has to finance leases for customers who have previously had issues with their credit, they can still be sure about getting their leases financed.
Moreover, customers do not have to wait or file long applications with many strings attached to get their funds. The application program at Pawnee Leasing is quick, easy, and simple. Using Pawnee Leasing, brokers can be sure that they will be able to get as many new customers as possible. Besides, they will also be able to meet the financing needs of all such customers.
Equipment Dealer or Manufacturer
Equipment dealers can use useful financing schemes at Pawnee Leasing and capture customers. All dealers or manufacturers need a leasing company to be able to sell their inventory. However, unlike Pawnee Leasing, most other leasing companies need strict credit requirements before they help you with leasing equipment to potential customers. Pawnee Leasing makes this process easier by:
- Removing the minimum two years of business standing for the potential customers.
- Easing the stringent credit parameters that operate in the industry.
Pawnee Leasing Corporation understands that the business loses potential customers every time a customer is rejected due to the two above reasons. Pawnee Leasing is the way to go if you want to ratchet your sales. Pawnee Leasing will link you with one of their approved brokers.
Pawnee Leasing brokers will pitch up your sales by helping you connect with the right kind of customers who meet your credit conditions. Furthermore, the brokers will also educate you on how to ensure that you make the most of leasing your equipment.
Small Business Owner
If you are a small business owner looking for ways to finance equipment needed by your business, then Pawnee Leasing might be the answer to what you are looking for. Pawnee Leasing similarly also helps with leasing if you have had bad credit issues before. The financing you can get ranges between $1,000 and $350,000, and the repayment term can be stretched up to six years.
If you have already made a deal with a dealer or a manufacturer, you can have that dealer/manufacturer contact Pawnee Leasing Corporation to process your application quickly. The method to do so would entail signing up on Pawnee Leasing Corporation's website and selecting the 'Business Owner' option on the website's main page.
Afterward, you will be directed to one of the many independent lease brokers of the company who work around the US. The broker will then help you finance your equipment.
An equipment lease is one of the most used methods by new businesses to finance their equipment. The reason it's mostly chosen as a go-to option is because leasing is simple, easy, and hassle-free to acquire the equipment needed by the business.
“Pawnee Leasing Corporation has unique programs for startups”
How Do You Qualify For Commercial Truck/Equipment Financing At Pawnee Leasing Corporation?
Pawnee Leasing Corporation offers several small-ticket credit programs. The credit programs are available to all brokers, and you will have to get in touch with any of the Pawnee Leasing brokers in the US to finance your business needs.
Pawnee Leasing Corporation has unique programs for startups, Credit A, B, and C type creditors. Additionally, Pawnee Leasing Corporation caters only to the needs of the broker community.
Pawnee Leasing A Creditors
To guarantee the loan, the A-type creditors need to take a few steps, which include:
- You are sending your application to the Pawnee Leasing Corporation.
- Creditors have two different types of financing available depending on their time in their respective businesses,
- Businesses with more than five years of experience can be financed for up to $75,000.
- Businesses with an experience of over five years in their respective industry will be financed for up to $350,000.
- Financing generally ranges between $5,000 and $350,000 for A-type creditors.
Pawnee Leasing B Creditors
B-type creditors have to meet less stringent conditions to qualify for financing. This is because B-type creditors have less experience as an operating entity in their industry than A-type creditors. The conditions imposed on B creditors are listed below.
- Like A-type creditors, you only need to send an application to apply for financing.
- B-type creditors who have more than two years of experience in the business can be financed for $75,000.
- In general, the financing for these types of creditors ranges between $5,000 and $75,000.
Pawnee Leasing C Creditors
C Creditors are those creditors who will be financed anywhere between $1,000 and $35,000. Moreover, Pawnee Leasing Corporation has no experience doing business with such lessees. These businesses only have to send in their application to be considered for financing.
Perhaps Pawnee Leasing Corporation is the only lender who considers startups for financing. Startups have to fulfill the following conditions to receive financing from Pawnee Leasing Corporation:
- Application to be filled out online on the Pawnee Leasing website.
- Should have a business standing of fewer than two years.
- Startups can receive between $1 and $50,000 to meet their financing needs.
- Food and Beverage Industries are considered for different amounts of financing.
- The Food/Beverage industry will receive $15,000 to meet financing needs.
- On the other hand, the Tanning Industry can receive as much as $25,000 in terms of financing.
“Pawnee doesn't impose daunting conditions as a part of its loan qualification”
Loan Application Process At Pawnee Leasing Corporation
Pawnee Leasing Corporation doesn't impose daunting conditions as a part of its loan qualification process. In the same vein, it allows businesses with even B or C type credit ratings to apply for loans at Pawnee Leasing (as long as said businesses do not come under the prohibited list).
Nonetheless, Pawnee Leasing Corporation requires a few conditions to be fulfilled so that you are eligible for financing. Such conditions are:
- The business requiring financing should have been in the business for at least two preceding years.
- Proof of homeownership is also required.
- Sometimes you might as well be asked for a down payment on your lease/loan.
We have discussed what a borrower should have before applying for a loan/lease. Let's discuss the application process. To get the loan, you will ask for a few documents like:
- Credit application duly signed.
- Invoice of the equipment that shows at least 70% ownership.
- Bank statements for the last three months may also be required.
- Proof that your business has been operating for the last two (or more) years.
While these should suffice, you still may also be ready to submit a few more documents that might be required. Such documents include proof of:
- Review of the invoice
- Ownership of the home
- Liens and vendor approval, etc.
Interest Rates at Pawnee Leasing Corporation
Pawnee Leasing Corporation is not unnecessarily harsh regarding the Interest rate you will have to pay. Nonetheless, it is important that you, as a lessee/loan receiver, are aware of the terms and conditions that will make a part of your deal with Pawnee Leasing Corporation.
Below we will give you a rundown on all such factors that you should consider as a must before you sign up for a lease or a loan at Pawnee Leasing.
The interest rates are usually high for financing from non-traditional lenders as the risk involved is also high. The interest rate at Pawnee Leasing Corporation starts from 14 percent.
As said earlier, Pawnee Leasing Corporation specializes in small-ticket financing. Therefore, the funding involved is rather low compared to other lenders. The funding at Pawnee Leasing ranges between $5,000 and $250,000.
Term of the Loan/Lease
The loan term offered by Pawnee Leasing can be dubbed as medium-term, as it ranges between 22 to 60 months.
Down payment at Pawnee Leasing also comes around to the industry's average. You are supposed to pay 0 to 15 percent of the total value of the equipment as a down payment.
Pawnee Leasing Corporation offers many buyout agreements. Buyout Agreements decide what will happen with the underlying equipment once the lease/loan term ends. The buyout agreements that might be part of your agreement with Pawnee Leasing include:
- $1 Buyout agreement. You will have to pay $1 to have complete ownership transferred at the end of the lease term.
- 10% buyout. 10% buyout is when you will have to pay an under underlying asset value the term's value ends.
- FMV purchase. Fair market value purchase entails paying the market price of the asset/equipment in question when the lease term ends.
Additional costs that have to be paid include the following:
- $150 to be paid for documentation.
- $250 was paid for transferring the title.
- $350 to be paid for hiring a professional who will inspect the site where equipment is supposed to be installed.
- $250 is the loan processing fee.
Unfortunately, the company has listed next to no information on the terms and fees that will be charged. Customers have frequent complaints about the lack of transparency on the terms and fees.
Similarly, the company's profile on Better Business Bureau (BBB) also states similar concerns about the lack of transparency at Pawnee Leasing regarding rates and fees.
While there have been complaints about lack of clarity on fees, other customers have appreciated the support and help they got from the customer support staff of Pawnee Leasing Corporation.
What can I finance at Pawnee Leasing Corporation?
Pawnee Leasing Corporation finances both old and new equipment needed by businesses. Pawnee Leasing focuses on companies operating in the software and medical sector. However, the company will also finance other businesses that do not fall under the list of prohibited businesses.
Does Pawnee Leasing charge an application fee?
It is unclear whether Pawnee Leasing charges an application fee. However, the company does charge a loan processing fee of $250.
Should I lease or purchase the equipment if I need the equipment for the short term?
If you need the equipment for a short period, then leasing it might be the cost-effective way to do so. However, if you need the equipment for a period exceeding three years, then maybe you should get a loan from Pawnee Leasing and purchase the equipment for yourself.
Why should I lease the equipment?
A lease should be your go-to choice for equipment that needs upgrading. For Instance, you should lease software from Pawnee Leasing rather than buying them, as it will need to be constantly updated. By leasing, you get to pay lower upfront costs. In a nutshell, leasing makes it easier for you to finance equipment that is too costly for you to buy.
What are the potential benefits of equipment financing?
As a small business owner, you will often have to choose between buying new equipment and leaving enough cash in the drawer to finance your daily operations. Thus, most businesses go for leasing equipment rather than buying it when faced with such a choice. In this way, they can avoid uncertainties associated with acquiring the equipment.
What do I need to do to qualify for financing?
Typically, businesses need to have been in the business for at least two years to apply for financing. Similarly, the revenue limit set on businesses applying for leases is $50,000. Moreover, a credit card score of 650 FICO is also usually required.
However, there are no such requirements if you apply for a loan/lease at Pawnee Leasing. This is because Pawnee Leasing finances startups and old businesses alike. Similarly, Pawnee Leasing doesn't care about the credit scores of its customers.
What do you mean by financing?
Financing refers to the process of providing funds for the activities of the business. This means that all the activities that take place in the business, like making purchases, investing, buying equipment, etc., have to be financed by banks or other private lenders.
Without financers, it will be difficult for businesses to perform their business operations as they will face cash flow difficulties stemming from not being able to cater to all the needs of the business; that's why financing is a crucial business activity.
How do I repay my lease/loan?
Both equipment financing loans and leases work rather similarly regarding their repayment. Such businesses must pay back their loan/lease according to their repayment schedule. Usually, businesses' loan/lease term depends on the risk involved, that is, their credit performance. In some cases, the repayment term can be extended depending on the circumstances of the borrower/lessee.
What are the interest rates for equipment financing?
The equipment financing rates differ across businesses. They vary on a case-by-case basis. Usually, such rates depend on the following things:
- Type of lender
- The creditworthiness of the borrower/lessee.
- Amount of time in the business.
- Type of the loan or lease (finance/operating).
The interest rates for most businesses usually fluctuate between an effective rate of 2 to 20 percent.