Equipment Leasing Criteria 2

Equipment Leasing is an Asset Based Loan with the 3 fundamental characteristics of a loan:

• The use of the equipment as collateral for the loan;
• Defined payments to the funding source;
• The payments to be made over a specific period of time

Unlike Factoring, a debt is created and the funding source will look more closely at the Borrower’s financial position to determine cash flow strength for repayments. Specifically:

• List of assets and any encumbrances against each one
• Valuation report of the business assets – this must be higher than the loan amount, after taking into account any encumbrances.
• 2 years audited financial statements from the Borrower
• 2 years corporate tax returns
• Purpose of the loan
• Amount of the loan
• Likelihood of repayment
• Any recent contracts to verify increased business
• Bio on principals of the business
• Background and credit checks on them
• Additional data that will give the funding source a complete view of the borrower

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