Clean Credit

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About First Capital

 

Leasing For 
Start-Ups, New Businesses & All Businesses

We have very few "cast in stone" rules.
Although the following
guidelines are important for most First Capital lease programs, start-up and new business programs often have their own special requirements.  ("start-up" restaurant requirements for example, are the most stringent and least flexible) General guidelines for "clean personal credit" appear below as well:

Extending Credit
The decision to extend credit to Start-Ups and New Businesses will rely heavily on the financial strength and demonstrated ability to manage credit of each of the principals (owners of 10% or more) of the entity seeking lease financing. 

Credit Based Criteria
Start-up and new business leasing
in particular, is a "credit-based" decision (as opposed to asset based).  The "idea," the business plan, projections and the value of the equipment are all considerations in an approval, but none will outweigh the importance of the principal's credit.  As the business doesn't have any "credit," the only credit left to consider is that of the owners.

We are not "investors."
We are not venture capitalists, nor are we looking for equity or any participation in the "upside" of the project's success.  Our only interest is in the timely repayment of the lease and hopefully an opportunity to fund your business' future growth & expansion!  If the deal falls apart at any point, for any reason and we have to recover overdue payments and/or recover your used equipment, the total transactions is almost certainly a NET LOSS for the leasing company. 

What We Mean By "Clean Credit" (Start-Ups & All Businesses)

bulletPersonal Credit Bureau Report Characteristics that will be considered:
- Minimum Score 625
(675 is better, 700+ is where you "want" to be)
  ( >750 is MANDATORY for start-up restaurants/food service)
- No slow pays during the previous 12 months
(or VERY GOOD explanations)
- No Unpaid Charge Offs
(or VERY GOOD explanations)
- No Unpaid Collection Accounts (or VERY GOOD explanations)
- At least 7 "trade lines"
(accounts on you credit bureau)
- Oldest credit account at least 3 years
- "Availability" of credit is important. 
(Being "maxed out" is a significant negative)
bulletRecent Inquires - Less than 10 in the previous 12 months.  (Don't "shop" your lease to death, you'll end up being turned down automatically, by everyone!  We see this everyday)
bulletBank Reference (business or personal account for start-ups) that shows a 3 month history as follows:
- Lease amount up to $20,000: The average bank balance should be at least 4-figures (low)
- Lease amount up to $30,000: The average bank balance should be at least 4-figures (medium)
bulletBank Account should be "in good standing" with NO NSF's (or VERY GOOD explanations)
bulletComparable Debt.  Can you show a track record of repaying a debt comparable to amount you are requesting?  (A big plus)
bulletNo Personal Bankruptcy (for start-up or new businesses).
bulletRevolving Debt (credit & other charge accounts) should be less than $25,000
bulletNo Open Tax Liens or Unsatisfied Judgments (your assets may be subject to seizure at any time)
bulletNo Child Support Defaults (your assets may be subject to seizure at any time)
bulletNo Student Loan Defaults  (your assets may be subject to seizure at any time)


Other credit considerations:

bulletHomeowner (a plus)
bulletCo-signor! -- Can you bring a stronger co-signor to the transaction?  (This is a  big plus for marginal transactions, it is of NO USE if the principal is significantly below the standards outline above)  

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