Bob needs $125,000 of your equipment. Now what?


Let me tell you a true story (with names changed to protect the innocent). Bob is in the market for about $125,000 in new commercial equipment. Part replacement for older equipment and part addition for some new business on the way, this package of equipment is pretty important to the company. Bob loves the industry leading brand. He takes of pride in being an equipment owner of this brand so he reaches out to his long time dealer relationship and Kim, the rep he works with at the dealer.

Kim, knowing Bob and his affinity for the industry leading brand of equipment she represents, chuckled a bit when she saw the brand of her equipment’s ballcap on the dashboard of Bob’s truck as he pulled into the parking lot. While a veteran salesperson, Kim was already counting the commission on this one. Kim’s conversation with Bob started with what equipment Bob had in mind. Bob, as such a fan of the brand, had an equipment package researched with options, bells and whistles and of course…pretty firm expectations of pricing. Kim snatched up the list and began pricing things out giving Bob a new branded keychain while he waited.

But when Kim quoted the price, Bob was stunned. The price of the equipment has risen nearly 20% over what he had researched. Kim explained about rising costs of materials and something about oil, but Bob’s hearing had shut down. Kim, seeing her commission check sliding away, offered a used equipment package, similar…but far from the same. And then, the phrase commercial equipment sales teams love…I’ll have to think about it. He told Kim he loved the brand, he just needed to “shore some things up”. Kim was still pretty confident. After all—Bob loved the brand.

On the way back to his office, Bob reached out to a respected competitor in shock over the price only to find out the competitor confirmed the experience. Bob took another look at his financial situation and figured he’d need to call his bank, but they said the process could take 3-6 weeks. So Bob hit Google. And 2 cigars later, he discovered one of the “other brands” was giving advice about how to handle growth in his industry. It sounded like they were describing his company. So he reached out to that dealer, just to confirm he didn’t want their brand.

The “other” dealer asked Bob what was going on with his business. They asked about how he acquired, maintained and disposed on similar assets. After having this conversation, the “other” dealer proposed an equipment package that was larger with value added services that met Bob’s needs in a unique way. Then the kicker. They said he could have it for only $1700 per month with no money down—that he could keep his cash and match his payment to his inflows of revenue. 2 meetings and 4 hours later…the deal was done.

When Kim heard the news and reached out to Bob, he explained that the “other” dealer created a solution not even his fandom of the industry leading brand could create. And when she asked him how much it cost, he simply said $1700 per month. She pointed out that was his finance payment and not the cost, but Bob said he wasn’t sure of the purchase price…and he’d have to look that up. Hmm.

Cautionary tale? Yep. Deeper knowledge of what someone does drives a custom solution that is marketed with a payment first and voila…done deal. And leading with a payment helps you control the sale. If you’d like to become that “other” dealer, give us a call…we can help. SLS makes commercial equipment financing uncomplicated for your customer with affordable, easy, monthly payments.

A better way to acquire equipment?


For most business owners, equipment acquisition happens in the break/fix moment. Recent research points to more than 60% of all small business owners replacing equipment only when they absolutely have to. But with the price of this equipment being so significant and the enormity of downtime expenses, is this the right approach?

The downside of waiting until you have to.

Running an asset “until the wheels fall off” or close might be a very expensive strategy. Maintenance expense can be a monster, but downtime is the real killer. Most business equipment is a source of revenue and the ones that aren’t are counted on for operating efficiency. Hours or days of downtime in these circumstances cost big bucks, not just in lost productivity, but in rental and other real dollar costs.

Understanding your equipment

If running equipment as long as conceivable is not an option, what is the right time to replace equipment? The answer depends on the equipment and how you use it. To avoid some of the real pitfalls of aged equipment and its downtime, you have to first look at each class of equipment you need and how you use it. For technology, the cycle may be 2 years and for some construction equipment it may be 15 years. But we’ve seen trucking companies that replace Tractors every 24 months and replace laptops every 3 years. It all really depends on the unique nature of your business.

A better way?

A Life Cycle Management approach to acquire, finance, manage and dispose of your commercial equipment just might be an attractive alternative for you. Working with a combination of your equipment sales partners and a strategic finance partner, you can actually develop a program—customized for your company—that provides the best way to acquire equipment affordably while maximizing uptime and staying on the cutting edge of technology.

At SLS, we help business owners acquire equipment with competitive finance programs and make things downright uncomplicated. We can help you avoid the expense and fire drill of the break/fix moment with an affordable approach to acquiring new equipment. If you would like learn more, contact us today.

Surprising tips for a great customer experience


In a highly competitive environment, how can equipment manufacturers, vendors and dealers ensure they are consistently delivering a superior service experience? Often customers are happy with the “front-end” part of the sale, but it’s the “back-end” processes of documentation, payment and financing that become challenging.

In a recent survey, 61% of recent purchasers of commercial equipment site the “deal closing” process as the worst part of the customer experience.

Could there be an opportunity for equipment sales teams to create differentiation in this overlooked part of the customer experience? We think so. Here are 5 tips to consider when developing your “back-end” value proposition:

  1. Don’t hide the process. In fact…do the opposite. Create a quick step by step written journey for the customer and make sure they have access to that information early in the sales process. Often customers become dissatisfied because they are surprised with certain information requirements at the last minute that delays or complicates the close. By establishing the process up front, you remove the mystery and prepare your customer for a smooth experience.
  2. Money Matters. Make sure they are prepared for the finance process. And not just the application process, but to total experience all the way to close. Ensuring that you bring up finance, payment and other money matters up front will save you migraines at the closing table.
  3. Word of mouth. Get testimonials of your smooth, successful transactions and focus on the customer experience, not just the value of the equipment. Hearing a customer speak of their experiences in the finance, documentation, insurance and other final stages helps new prospects feel confident in the buying experience…before they are ready to buy.
  4. Be straightforward and realistic. It’s easy to become excited when you are close to a sale and not want to say anything that might concern the customer. But having the courage to identify potential land mines in the process is important. More challenging credit might take a few more days to close. Upgrading insurance requirements may involve a few steps and take some time. Being proactive with these matters and setting realistic expectations actually creates a better customer experience. It’s the unforeseen surprises that hurt you.
  5. Understand the business that is buying. It is really important to understand who is buying, financing, paying, how many signatures, etc. up front. Asking this simple question can easily avoid troubles at the end.

At SLS, we think the finance part of your back-end process should feel very uncomplicated. And we help manufacturers, dealers and vendors grow sales through a wide variety of competitive equipment finance solutions. If you would like to see how a finance partner can help you differentiate with a smooth customer experience, contact us today.

A simple explanation of how business credit decisions are made


Most business owners have applied for a loan and faced rejection or an insufficient solution. Often they don’t know why they are being successful or unsuccessful in the endeavor to borrow money. While many make the process feel like rocket science, the fundamentals of commercial credit are actually quite simple. Lenders call it the five “C’s” of credit.


Admittedly, it’s hard to judge a person’s character you don’t know. That said, there are some key measures lenders evaluate that present the potential “character” of the business relationship. While there could be a number of items, the follow are the most common:

  • Pay history
  • Personal Credit
  • Tax History
  • Time in Business


How much can you borrow? What is your capacity to take on and repay debt? Capacity is simply where your lender calculates a number of important factors to answer these questions. These factors include:

  • Revenues
  • Earnings history
  • Cash flow
  • Leverage (think of it as debt to worth)


Often the easiest to understand…the equipment. If the lender is financing a new excavator that will have resale value for 20 years, that’s a good thing. If the lender is financing software, the finance options will be more limited. Secondary market value is very important to lenders when looking at the overall picture.


It’s easiest to think about this category as a description of how much investment you have in your company and the asset you are financing. If you have a significant investment in your company (especially as compared to how much debt you have) that’s typically viewed better than using everyone else’s money to fuel your business. Also, when acquiring equipment if you have equity (through trade or cash) in the new purchase that also add strength to the situation.


The general business environment makes a difference. Everyone remembers what the “Great Recession” did to some industries. Not pretty. Even if a company in those industries was strong in other areas, the general environment could negatively affect the situation to a degree.

Could interest rate be the least important factor in acquiring new equipment?


What’s the interest rate? It’s like buying a new lawn mower and asking who manufactured the spark plug. Don’t get us wrong, the mower doesn’t run without it so the importance is obvious, but are you really concerned with it? When acquiring new commercial equipment, interest rate is important…just not as important as many business owners make it.

Revenue growth

For many companies, each asset is revenue producing. Understanding the revenue impact each asset may bring is the single most important factor in evaluating a commercial equipment purchase. Whether bidding on bigger projects, hiring new staff, or a new focus driving additional sources of revenue, the opportunity cost of not having the asset working for your company often overwhelms any single part of the acquisition process.

Expense Reduction

Rental expense, downtime and maintenance costs create inconsistent cash flows, customer satisfaction issues and a generally challenging business model. Understanding the detail of the financial consequence your company is facing for each of these issues is critically important. Newer, more reliable equipment, in service improves consistency of cash flows and may lower overall expenses at a level far exceeding components of the finance structure.

Efficiency gains

In addition to downtime expenses, older assets often operate less efficiently. They may not possess the newest technology causing higher operating costs and a lower production rate. Employees that use less efficient equipment are often less satisfied with their job, leading to potentially high turnover costs and other management concerns. The real dollar expense of inefficiency is another factor that outweighs finance implications.

Payment over rate.

“How low can we go?” It can be easy to be seduced by interest rate. Obtaining a supremely low interest rate might feel like a badge of honor of sorts. In reality though, while a good thing, it’s somewhat like winning the award for being the tallest short person. The most important concept in finance is payment. That’s because the most important concept in your business is cash flow. Your bank may offer a great 6.5% rate, but the finance term is 48 months. An equipment finance company may offer 9%, but financed over 72 months. Lower payment frees you up to reinvest in your business…even monthly…in areas that provide a greater return on investment than investing precious cash flow in a depreciating asset.

At SLS, we help business owners with equipment finance that is downright uncomplicated. If you ever want to talk about how to position yourself for success with the acquisition of your equipment, give us a call.

Good Credit. Making money. Strong Business. Still turned down at the bank?


Most business owners find mystery in the process of acquiring financing for your business. One year everything goes smooth as silk. The next year the process feels cumbersome and difficult even though your good credit is still good. While the reasons for these wild swings in the experience of borrowing money are many, there is one that surprises most business owners when it’s too late: exposure limits

Most lenders have a somewhat mythical, unexplained level of debt they are willing to carry with your company. Even though you may be able to easily afford the additional debt as a company, the lender pushes back from the table because they are “full”. While this feels very odd to most business owners, there is a very rational explanation.

Most lenders are under increasing pressure from regulators and other sources ensure they can withstand the pressure of an economic downturn. If they over-invest, on a relative basis, with one company they may be taking too much risk from a portfolio management or regulatory perspective. Think of it as putting too many eggs in their basket. Because of this, they establish these “exposure limits” with any company so they don’t break any eggs. The problem is, most business owners only know of the exposure problems when the bank says “no more” and are not prepared for what to do next.

Knowing how lenders approach these issues, it is very important to diversify your sources of financing and not put all your eggs in the basket of any lender. You might use a bank for working capital, another bank for your real estate and another specialist lender for your equipment needs. But even within the equipment category, some businesses need such a volume of revenue producing equipment that diversifying a few sources even among the equipment lenders is important. Planning this diversification strategy can avoid times of capital constraint in economic uncertainty or “capping out” with an exposure limit.

Another option would be to work with a capital provider that offers multiple finance programs for commercial equipment. These lenders may have their own portfolio money, unique partnerships with funding sources and access to other specialty providers all in one phone call. A strong, experienced lender like this can help you with diversification and managing exposure without having to manage multiple relationships.

At SLS, we are an option that can help you manage diversification and exposure concerns for your business. With access to a wide variety of programs, our seasoned experts can help you plan for this strategy with competitive offerings while saving you a great deal of time and effort. If you would like to see how a finance partner can help you diversify your sources of lending, contact us today.

Is there more to “application only” than the application?


“Just fill in the simple form and in anywhere from an hour to a day we’ll hand you $150,000 for commercial equipment.” The increasingly technology-driven world of small business credit decisions is a wonderful thing. Right?

Well, it can be. It can also be riddled with problems. As you look to “application only” lending for your commercial equipment, here are some important items to consider:

Easy vs. Right. Easily getting your hands on the money feels good, but the devil is in the details. Just because you are approved, doesn’t mean it’s a good deal for you and your business.

All that glitters. What are the end of term provisions? How much money up front? Are their blanket liens placed on your business? We could go on and on. The equipment finance business is full lenders that seem to offer wonderful terms, but upon review, the details the finance structure can be harmful or at least not as good as it could be.

Seduction by Interest Rate. Finance geeks are great at “hiding” the interest rate. They may advertise 4% financing, but it’s hidden in an equipment sale package where the equipment price is increased to cover the low rate. Or they ask for more payments up front as a way to massage the faux interest rate down. Other parties may get you in the door with a low rate offer that virtually no one can actually get. The old bait and switch is always waiting for the low rate shopper.

Dealers are not finance people. Commercial equipment dealers leveraging financing to help sell their equipment…and rightly so. The problem is they are not finance experts and many small business owners leave success or failure in the hands of people that turn wrenches or write code. Not a consistent path to success.

You don’t know, what you don’t know. This biggest problem with application only lending is that most business owners simply don’t know what to look for, questions to ask and if the finance deal in front of them is actually a good deal.

At SLS, we help manufacturers, dealers and vendors grow sales with competitive finance programs that make things downright uncomplicated. If you need an expert with decades of experience guiding business owners through the process, contact us today.

The benefits of pre-qualification for your equipment financing.


Many small business owners spend significant time going back and forth with equipment specs and spend virtually no time preparing the financing. Unfortunately, knowing how and where to get the money should be a first step and not an afterthought. The lack of up-front preparation for the finance process can lead to frustration on both ends of a transaction and a difficult experience. There is a simple solution that can better position you for success.


We are all familiar with the “pre-qualification” process of home ownership. Because of the complex nature of mortgages, it only makes sense to have a firm grip of how the asset is going to be purchased before you spend too much time in the purchase process. The process for acquiring financing for commercial equipment can be drastically simpler, but by completing a fast pre-qualification process you can dramatically improve the experience.

A quick pre-qualification program can:

  • Help you focus on only the equipment you can afford, rather than wishing.
  • Open your eyes to more equipment once they see how affordable one item might be.
  • Shop and negotiate with confidence in the buying process
  • Help eliminate the uncertainty and anxiety in the process

How to get pre-qualified

Establishing a relationship with an equipment lender is valuable for more than just the current need. Their expertise with the financial side of the equipment business can guide your direction, limit your confidential and challenging conversations from the equipment source and position you for long term success. It is also beneficial to partner with an equipment financier that has access to a wide range of offerings—from good credit to challenged credit—that can offer more options for a rapidly changing lending climate.

At SLS, we help business owners acquire equipment with competitive finance programs and make things downright uncomplicated. If you would like to get pre-qualified for your equipment need, contact us today.

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