No! But it is not impossible. You have to understand that restaurant equipment is expensive. Just about every type of financing today requires a credit check. If you have poor credit, chances are you did not pay a company back for their goods or services and ripped them off. This makes it difficult for a lender to extend credit to you and your business. Also, the restaurant industry is viewed as high risk in the lending world due to the high percentages of default. However, there are alternative ways to obtain a lease on restaurant equipment, even after being delinquent on your payments.
Trying to obtain a lease without a credit check will be tough. If you do not want your credit pulled, you definitely have something to hide. Is it a tax lien, child support payments, 30-60-90-day lates, collections, short sales, or bankruptcies? Below are some solutions for those of you who have a challenged credit situation.
Fix Your Credit
This should be at the top of the list for all business owners. Yes, fix your credit! You borrowed the money and used a company’s products or services so now it’s time to pay it back. Yes, pay your bills on time. A company trusted you to pay them back, just do it. Honor the agreement that was made. Sounds simple but a lot of people refuse to. If you have problems contacting creditors, there are several companies as well as attorneys who specialize in credit enhancing.
Having a cosigner may assist you in leasing the restaurant equipment, especially if the cosigner has good credit. You may be able to qualify with just your cosigner on the lease. Check around at different outlets that offer restaurant equipment leasing. Also, make sure your cosigner has good credit. If he or she does not, you may be out of luck.
Security Deposit/Down Payment
A large down payment or deposit may help you secure the much-needed equipment. The restaurant leasing outlet may have a special program if you put down a sizable deposit or down payment. They may be able to lease to you without a credit check if you put more down upfront. This way, they see that you have more skin in the game.
Do you have existing equipment in your restaurant paid off? You may be able to use that existing equipment in addition to other pieces of equipment and cross collateralize. The restaurant leasing outlet may have a special program if you have sufficient collateral and a solid track record.
Having a proven track record with your existing restaurant equipment outlet will definitely help you in obtaining that lease. The supplier can go back and take a look at your payment history for previous purchases and/or leases.
We have advised several clients to use Magilla Loans, a fast, anonymous, and free search engine for commercial loans. It is simple to use, just answer a handful of questions and receive multiple loan proposals. Above all, Magilla Loans is absolutely FREE.