Guest Blog Post Authored By: Ramona Mutter, Senior Manager, Credit Operations
Make sure your lease application is accepted by following these seven recommendations.
Few things will sap your motivation and momentum on a project (or worse, while starting a business) than having a lease application rejected. Progress can grind to a halt while you scramble to regroup, potentially missing deadlines and maybe even losing money.
It doesn’t have to be that way! At National Leasing, we hate nothing more than turning down a lease application, especially when the reason for rejection may be something simple -- and easily correctable. Here are some tips to help you get approved!
Tip 1: It’s all about the details
This may seem like a really obvious one, but believe it or not, lack of information is one of the most common reasons applications are turned down or require more time to review. It’s as simple as making sure you’ve filled out every possible field on the application before you submit.
Along with completing your application fully: always provide as many details as possible on your lease application. The more details you give us, the more likely you’ll be approved (and with fewer delays.) For example, when we ask about which industry you’re in, you might list “construction”. But what kind of construction is it? Road construction, home construction, or something else entirely? Providing extra detail goes a long way toward getting us to a comfort level where we can approve you. Vague answers simply don’t give us enough information to go on.
Tip 2: New business? You may need a personal guarantee
You might be surprised to learn we need a personal guarantee before we’re able to approve an application for a brand new business. To provide a personal guarantee, you have to submit personal information like your full name, home address and date of birth, which allows us to pull a credit bureau report, and the expectation is that you’ll become a party to the lease.
A lot of people think their business lease can only be done in the name of the business, but if the company is too new, your personal guarantee may provide the additional support needed to approve the application.
Tip 3: Tell us your story
Another item that can help new businesses with approval is to provide a business plan or a backgrounder describing your related experience. Although those things may not seem like they fit on a business lease application, if you don’t have established credit history or financial statements, we need to understand how and why you’re going to be able to pay for the lease. Once again, the more info you can provide, the better.
Tip 4: Be in good standing
With all applications, we look at commercial credit reports and sometimes personal credit bureaus as well. We encourage all applicants to manage the level of debt they’re carrying, like not carrying really high balances or showing really high utilization of credit lines. Also, we want to see that you’re paying trades on time because that shows us two things: capacity and character.
Along with being in good standing with the credit reporting agencies, we also encourage you to keep your corporate registration and tax filings up to date. With businesses, sometimes we see corporate registrations or filings aren’t up to date, which can cast some doubt about the legitimacy of the business.
Tip 5: Handle credit issues responsibly
If you’ve had prior issues with credit, what’s important is how you managed it. We know businesses run into hiccups from time to time and we totally understand that; whether an owner goes through a divorce or there’s an economic downturn in a region, we know things can happen that are out of your control. It’s how you manage those struggles that matters. Don’t avoid your creditors and be sure to take care of any ongoing issues before you make your lease application.
Tip 6: Get your statements prepared by an expert
One thing we require on larger transactions is financial statements. With those, we encourage an accountant to do your statement as opposed to providing an internally prepared statement. Not everyone can afford to hire an accountant to do it, but if it’s possible, it just provides another level of validity to the numbers and what’s being presented to us. Once we get those statements, we’re looking for healthy balance sheets and demonstrated cash flow.
Tip 7: Don’t take it personally
When we ask for additional information, please don’t take it personally! It’s just part of the process that gives us a better understanding of your business and your ability to make your payments. It isn’t a sign that we’re doubting your business or questioning you; it’s simply us doing our due diligence.
I’ve got it all in order, now what?
Once you have a fully complete application submitted, we should be able to provide a decision in a very short amount of time. We aim to adjudicate our transactions under $50,000 within a couple of hours, transactions $50,000 - $100,000 within one business day and transactions over $100,000 within about two business days.