Our Lending Philosophy
“Couldn’t every transaction be doable with the right structure and terms?” That’s the question we asked ourselves twenty-five years ago when our related brokerage American Leasing & Financial began. At the time, big banks were beginning to implement rigid criteria and an entire era of lending without exceptions began. Ten years later, when American Leasefund started, we knew that it was our flexibility and lack of restrictions that would set us apart from the competition.
After surviving the worst economic recession in recent memory, American Leasefund has prospered tremendously. Each of our last five years has been better than the one before, and we’re already on pace to double our total fundings from 2014.
Funding in-house affords us the opportunity to do business with a variety of customers—including ones unable to attain financing through conventional outlets. With a wider credit window than many of our competitors, we have a high approval rate for applications placed with us. Because our approvals are issued manually, you never have to worry about a computer system scoring you out of range. Yes, we use our own scoring model, but we’ve always held the belief that credit is not as simple as a magic number, making us one of the most flexible lenders in the country.
Here are some other reasons to choose Leasefund for your next transaction:
How We Underwrite
Often, it takes building a relationship with a lender to get a complete sense of how they lend money. Many equipment finance companies do this on the basis of credit. Still others rely on detailed financials to ensure ratios are in order and a business can service its debt load. At American Leasefund, we believe the only true way to get the full picture of a transaction is to look at all of the details.
For us, this begins with using credit scores for their intended purpose: as evidence of prior repayment and as a snapshot of current debt. Over the years, we’ve seen a great deal of 700+ credit score guarantors default on a lease. We’ve seen just as many (if not more) 500 credit score customers pay us as agreed. When lenders get bogged down with the idea that a credit score can accurately predict risk for everyone, they miss the opportunity to build relationships with a lot of solid businesses.
By evaluating credit along with cash flow and a variety of other factors (including: location, industry, and stability), we help paint a picture with more relevant details. Many business owners have encountered personal credit hiccups merely through their efforts to salvage their business. Still others have leveraged their personal credit to keep the business afloat. The result is that there are strong companies that can and will repay commercial obligations even though the personal credit of the business principals may be imperfect.
Once we get a complete picture, we think structure. Some transactions are true “Application Only” deals. One payment in advance and a term commensurate with the amount being borrowed are all the structure that’s needed. Still others require additional collateral or a larger advance payment to fit our criteria. Structure mitigates risk. By piecing together terms that answer back any concerns about the credit risks at hand, we come up with a mutually advantageous approval.
While common sense dictates that not every transaction can be approved, we’re committed to finding ways to put a transaction together—in short, we would rather find ways to say ‘Yes’ than to say ‘No.’ The benefit to this philosophy is simple: our brokers, customers, and vendors can believe in a Leasefund approval, knowing we will stand behind our credit decision when it comes time to fund.