How to Ensure a Complete and Accurate Business Credit Report

Michael Lockwood, President of TEQlease Capital, wrote an article for Up and Running Blog that was published today titled “8 Ways to Clean Up Your Business Credit Report”. We are including an excerpt from that article below.

A complete and accurate business credit report is like a gourmet meal to a loan underwriter.  Your business credit report is important for your company getting a business loan, because it tends to verify the information provided in your credit application and business plan.  Much like a personal credit report, unless it is managed the business credit report is often inaccurate, incomplete and it presents your company in a poorer light than it should.  If you want to maximize your chances of getting your business approved for a business loan or equipment lease, ensuring that the get a copy of your business credit report is accurate and complete should be done very early in the process.  In fact, why not do it now?

Business credit reports are sold to the credit underwriters employed by lenders and equipment lessors.  Dun & Bradstreet is the largest supplier of business credit reports, but it is by no means the only one. The data that goes into the business credit report comes from a lot of different public and non-public sources:  lenders pool business credit information on a voluntary basis and public information is obtained and synthesized from sources like the State Secretary of State or the Division of Corporations.  But don’t trust that the available information is accurate – take the responsibility to verify the information, and then add as much information as possible.

The first step of course is to get a copy of your business credit report.  No need to pay for the report – you can get one for free from any provider, and you can modify the information (within limits) either online or over the phone.  We recommend doing it online.  Once you have the business credit report, verify it or correct it, following these tips:

  • Make sure the business credit report accurately shows the business name, and any trade styles (DBA’s)
  • Verify the physical business address, and include your website address
  • Look at the payments score in detail.  Is it accurate?  Does it accurately show payment promptness?  If not you can challenge an entry that shows the payment was paid later than it was, but be prepared to be able to prove the details.
  • Is ownership of the business accurately explained, and does the business credit report properly show the business entity type (partnership, LLC, corporation), and time in business?
  • The business credit report allows you to add the name of the officers of the company, the title and business function, and some work experience.
  • It also provides for entries for the history of the company, and any recent company events, such as a move to a new location, a change in ownership, etc.
  • You can decide whether to add financial information about the company, but remember that you will be making sometimes sensitive information available to everyone
  • The business credit report will show liens, lawsuits, and loans.  Make sure this information is accurate.

Managing your business credit report is a good practice.  Calendar a follow up in a year to revisit the business credit report to check any changes and add new information.

Please contact us if  you have any questions.

 

Winery Expanding Manufacturing through Equipment Leasing with TEQlease Capital

Oak Mountain Winery, located in Temecula, California, has recently secured equipment lease financing through TEQlease Capital for new champagne tanks and will also be adding new bottling equipment. With the new equipment in place, Oak Mountain Winery will be expanding their winery business even further and will be offering their winery manufacturing services to three local wineries. You can learn more about the wines they offer at http://www.oakmountainwinery.com/.

Tablets Quickly Becoming Primary Computing Devices

By 2016 there will be 760 million tablets in use globally representing a 46% compound annual growth rate, Forrester Research forecasts in their just published report “Tablets Will Rule the Future Personal Computing Landscape.” That’s pretty dramatic growth considering that in 2011 56 million tablets were sold.

Why the rapid growth in the tablet market? According to Forrester’s Frank Gillett, “Tablets aren’t the most powerful computing gadgets. But they are the most convenient.”

Gillett explains:

They have longer battery life and always-on capabilities better than any PC — and will continue to be better at that than any ultrathin/book/Air laptop. That makes them very handy for carrying around and using frequently, casually, and intermittently even where there isn’t a flat surface or a chair on which to use a laptop.

And tablets are very good for information consumption, an activity that many of us do a lot of. Content creation apps are appearing on tablets. They’ll get a lot better as developers get used to building for touch-first interfaces, taking advantage of voice input, and adding motion gestures.

Forrester goes on to forecast that by 2016 one third of all tablets will be purchased by businesses and we will “see a very different computing landscape, with tablet adoption having had a dramatic impact on PCs.”

These predictions are probably not a surprise to many small businesses and schools that are already using tablets for many of their business functions. The Street recently reported on the growing using of tablets by small businesses in their article “Why Every Small Business Needs an iPad”. According to Mike Pugh, vice president of marketing at j2 Global:

Credit card processing off a mobile device is a great way to be able to do business in a variety of different settings. Using the camera in the device to be able to do both taking pictures and video. For someone who has remote offices, video conferencing can be a fantastic way to maintain contact with customers or employees. Using the camera is also great way to do documentation; essentially it serves as a scanner that can document insurance claims or for interior designers to be able to take pictures of different environments.

What are we seeing? We have seen an uptick in schools leasing tablets for the 2012/2013 school year especially since Apple’s launch of the new iPad.

What questions do you have about leasing tablets for your business or school? Please contact us and we will walk you through the options.

12 Recommendations for Leasing Tree Care Equipment

Rayco 35 HP Stump GrinderThe last four years have been tough on the tree care industry, but as consumers and businesses begin to return to spending, it’s a good time for tree services companies to take stock of their equipment needs and financing options to make sure they are primed for the return of discretionary expenditures. With limited budgets during the Great Recession, many tree services companies have delayed capital expenditures for high ticket items including wood chippers, stump grinders, ground units, aerial chip dumps, and telescoping tree trimmers.  However, with a pretty consistent flow of positive economic news for both consumers and business, we see this changing in 2012.

If you are also considering acquiring new equipment, and want to conserve available cash, leasing may be an appropriate solution.  However, before finalizing the purchase or lease of needed tree services equipment, I recommend that companies carefully consider the following 12 tips so they don’t make any costly mistakes.

  1. Understand your business credit and organize your financial information before contacting an equipment lease financing provider. Make sure you understand your credit score, your business financial picture, and any discrepancies that might be on your personal credit report or Dun & Bradstreet business credit report.
  2. Do the math and determine whether the Section 179 deduction and bonus depreciation will benefit your business or not. Section 179 allows businesses to deduct the cost of qualifying businesses equipment placed in service in 2012 up to $125,000. In 2013, the deduction will drop significantly to just $25,000 unless Congress acts.  Also, get advice from your tax advisor about the acquisition.
  3. Determine whether equipment purchases should be made in cash, or whether lease financing makes sense to conserve capital.  Do a lease-versus-buy analysis.
  4. Don’t assume your bank or the equipment manufacturer’s captive finance company will offer the best terms. The majority of equipment leases are done by equipment lease providers, and often at better pricing. Always compare rates, lease terms, fees and options.
  5. Do due diligence on your proposed financing provider. Once you have a short list of providers make sure to check them out thoroughly. Go to Google and run a search on them. Also run a search on social media sites like Twitter. Work only with established financial solution providers.
  6. Don’t pay upfront “application” fees to a bank or equipment financing provider.
  7. Be prepared to explain in advance any negative business results to a lease financing provider. For example, if you had a business loss in 2010 explain why.  If you recently won a major contract, explain that too, even if the new business hasn’t yet affected your business results.
  8. Understand the difference between a Fair Market Value Lease and a $1 Purchase Option Lease. A Fair Market Value (FMV) Lease is one of the most common leases that businesses select because it offers the lowest monthly payments, provides the greatest flexibility at the end of the lease, and may also provide tax incentives. A FMV lease is often used for acquiring technology equipment. On the other hand, a $1 Purchase Option Lease gives businesses the ability to “purchase” equipment for a $1 at the end of a leasing period. The monthly payments are higher than a FMV lease. In addition, you may have additional financial benefits including depreciation and/or interest expense benefits for tax purposes under either scenario.
  9. Describe to the equipment lease financing provider how the equipment acquisition will benefit your business. Provide a projection of cost savings or incremental realizable margins if you have one.  Obviously there is a reason why you want to acquire new equipment.  Make sure your equipment lease financing provider understands exactly what this reason is.
  10. Consider bundling multiple equipment acquisitions from different vendors under one lease with an independent commercial equipment lessor. Rates tend to be higher for smaller transactions. Bundling equipment acquisitions generally results in lower rates, is simpler to administer and account for, and also minimizes processing fees.
  11. Ask your equipment vendor for payment terms so you can defer a portion of the equipment cost, and coordinate deposits, progress payments, and performance retention payments.  Most equipment vendors will ask for a downpayment, with the balance due either at delivery or with ten to thirty days after delivery.
  12. Be careful of earnest money payment requests. An earnest money payment is sometimes required equal to a fixed amount or one month’s rent as a refundable application fee. The earnest money payment can be called an application fee, deposit, due diligence fee, etc. If the lease transaction is approved, the earnest money payment is applied to the first or last rental payment due under the lease. If the lessor declines the lease transaction, the earnest money payment is refunded, but sometimes, if specifically agreed in the lease proposal, a small portion of the earnest payment may be retained as an application or processing fee. Not all lessors require an earnest money payment.

 

5 Things You Need to Know About a Master Lease Agreement

U.S. companies are ramping up borrowing and signed up “ $5 billion in loans, leases and lines of credit in February, 22 percent more than the $4.1 billion a year earlier” according to the Equipment Leasing and Finance Association (ELFA). Much of that new spending is concentrated on technology. With increased interest in replacing aging equipment and acquiring new technology to increase productivity, many businesses are researching equipment leasing to stretch their budgets further.

If your company is one of them, there are five things you need to know before signing a master lease agreement.

  1. A master lease agreement is a governing agreement that may include a number of equipment schedules under it. It can be viewed as an umbrella agreement that a company leasing equipment may use to acquire additional equipment over time with the same lease funder without having to execute a new lease each time.
  2. Under each master lease agreement, there is a separate equipment schedule agreement that lists equipment leased, terms of the lease, pricing of the lease per equipment schedule, and end of lease options. If a company acquires equipment at two separate times for example, there would be two separate equipment schedules but only one master lease agreement.
  3. The end of lease terms on the separate equipment schedules that fall under a master lease agreement may be different.
  4. All the other terms –except end of lease– of the master lease agreement are incorporated into the equipment schedule.
  5. Once a master lease agreement is in place, a company does not need to renegotiate terms with a lease funder each time it adds a new equipment schedule to the master lease agreement. A master lease agreement speeds the process of acquiring equipment.

If you have any questions regarding a master lease agreement and whether it is right for your company please contact us.

 

 

Consumer Confidence at Highest Level Since 2007

Regardless of high gas prices, U.S. consumers are more confident about the economy than they have been since late 2007, according to the latest consumer survey by Thomson Reuters/University of Michigan.

The survey also reported that more households are describing the most improved financial situation in the last four years and are the most optimistic about employment prospects. Perhaps even better news for businesses, the data from the survey indicates “inflation-adjusted personal consumption expenditures can be expected to grow by 2.3% in 2012.” Consumer spending drives two-thirds of the economy.

The U.S. Commerce Department also weighed in and said “personal spending rose by a bigger-than expected .8% month over month in February, the largest monthly rise since July.”

All the upbeat consumer news is tempered by a warning from the survey director Richard Curtain, “Gas prices of $4 are no longer shocking, if they approached $5, the impact would be widespread and substantial.”

TEQlease Capital Secures More than $1 Million in Lease Financing for California Poultry Farm

TEQlease Capital is very pleased to announce we have recently secured more than $1 million in lease financing for one of California’s largest poultry farms to use to acquire cage-free hen housing.  With this lease financing in place, the poultry farm will be able to more than double its egg production, thereby increasing its profits and expanding its ability to supply organic eggs to one of the nation’s largest food retailers. In addition, with its state of the art cage-free system, the poultry farm now not only meets but exceeds California’s Proposition 2 law mandating humane standards for farm animals, and it has met the requirements of the law well ahead of its 2015 deadline.

Personal Cloud Will Replace Personal Computers by 2014

If the launch of the iPad didn’t cause enough of a stir with predictions of the imminent demise of the personal computer, Gartner recently announced, “the reign of the personal computer as the sole corporate access device is coming to a close, and by 2014, the personal cloud will replace the personal computer at the center of users’ digital lives.”

Questions to think about include how will this impact your business, the products and services that you deliver, and whether your business will be ready?

According to Steve Kleynhans, research vice president at Gartner, “Many call this era the post-PC era, but it isn’t really about being ‘after’ the PC, but rather about a new style of personal computing that frees individuals to use computing in fundamentally new ways to improve multiple aspects of their work and personal lives.”

The consumerization of IT has been taking place for nearly a decade. However, Gartner believes the next wave is starting to place as the following factors come together:

  • Users are more technologically savvy and have very different expectations of technology.
  • The Internet and social media have empowered and emboldened users.
  • The rise of powerful, affordable mobile devices changes the equation for users.
  • Users have become innovators.
  • Through the democratization of technology, users of all types and status within the organizations can now have similar technology available to them.

How will your business respond?

How to get your financing approved

Michael Lockwood, President of TEQlease Capital, wrote an article for Up and Running Blog that was published today titled “5 tips to getting small business financing “. We are including an excerpt from that article below.

It’s no secret that small businesses have had a hard time getting financing approval for nearly four years. But according to the latest Wells Fargo/Gallup Small Index –a quarterly survey of small business owners nationwide – small business owners are now more optimistic about getting credit than they have been since July 2008. According to the report, 28% of U.S. small businesses plan to increase their capital expenditures in 2012, the highest rate it has been in four years. And perhaps most importantly, 24% of small businesses have already started increasing their capital expenditures for 2012.

With optimism for gaining financing spreading, the question for many is how to best approach lenders to maximize the chances of getting a credit approval. Here are five keys for small businesses to get approved.

  • Demonstrate that your business generates steady cash flow. Cash is still king and is also a key predictor of a business’ health and prospects for the future. By being able to demonstrate you have ample and/or steady cash flow, you are ensuring to potential financers that you have plenty of money to pay creditors, employees and others on time.
  • Maintain a manageable debt load. Debt load is the amount of debt that is carried on your balance sheet. You need to be able to demonstrate you can not only handle your current debt load but also the additional debt repayment your proposed financing will cause. If you want to incur the debt for expanding your business be prepared to demonstrate why this additional debt will be beneficial.
  • Sustain a positive payment history. One of the most important factors for any financer to weigh is a business’ payment history. A financer needs to see that a business has a record of paying down debt, and on time.
  • Prove business judgment. Potential lenders want to be assured that you anticipate potential challenges and have a plan in place as to how to address these challenges. Furthermore, lenders are also interested to see that you have the management in place necessary to overcome any obstacles that might come your way
  • And of course, shop around for financing. Don’t assume your bank or the vendor will offer the best terms.  Compare rates, lease terms, fees and options and use only established financing providers.

If you have any questions, please contact us.

 

5 Tips for Replacing and Financing Technology Equipment

This week Michael Lockwood, President of TEQlease Capital, wrote an article for Up and Running Blog titled “10 Things to Consider before Replacing Business Equipment“. We are including an excerpt from that article below. You can read the entire article at the link referenced above.

With the end of the first quarter in sight and with economic indicators continuing to look positive, many businesses may finally be ready to pull the trigger and replace their worn business technology equipment. Regardless of whether you are looking to move your business computing to the Cloud or to upgrade your computers, servers, smart phones or any technology equipment, before taking the plunge we recommend that business owners follow the tips below.

  • Carefully research the technology you are considering. Make sure to invest the time into reading reviews of the equipment you are considering from analysts and professional reviewers such as CNET, PC Magazine, Small Business Computing, eWeek and Consumer Reports.
  • Remember the cheapest solution may not be the best fit. If you are planning on keeping your technology for three years or more, make sure you opt for the “best solution” for your needs. Determine what it will be worth in 3 to 5 years.
  • Choose your equipment vendor wisely. With all the easy comparison shopping that is available online make sure to compare costs and warranties across multiple vendors. No one wants to pay a high cost and neither does your financier.
  • Understand Section 179 benefits. Section 179 allows businesses to deduct the cost of qualifying businesses equipment placed in service in 2012 up to $125,000. In 2013, the deduction will drop significantly to just $25,000 unless Congress acts.
  • Carefully investigate your financing options. To learn more about equipment leasing and its benefits, you can read our post “Eight Equipment Leasing Tips” or contact us .