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Lender Tips of the Week #3: Consider A Loan Even When You Have Cash

When it comes to helping companies get small businesses loans, Fundera wants to make the process as easy and transparent as possible for borrowers. Not only do we cut down on the amount of paperwork, but we also find new ways to inform and inspire small business owners.

This is the first in an ongoing series in which we ask our trusted partners to share their best lender tips for prospective borrowers.

This week, Martin Franco, the Director of DLJ Financial‘s Equipment Finance and Business Capital Division, explains why it’s often better to finance than buy equipment outright—even if you have the money.

This may sound counter-intuitive, but there are a few compelling reasons.

Firstly, you should take advantage of not spending money out of pocket, Franco tells us. Even if you have the money in the bank, you want to keep as much as you can on hand.

Secondly, if you’re a new business, or you’ve never financed anything before, financing (even for equipment that costs as little as $5,000) will help you establish a credit history through D&B and demonstrate your ability to pay your debts. If you need credit later, your lender will want to see that you’ve financed — and paid off — at least half the amount you’re trying to borrow. You’re developing a solid business credit score.



Team at Fundera
Fundera is a curated marketplace connecting small business owners quickly and easily to the right loans for their business. It's our mission to help more small business owners to understand, apply for, and receive the funding they need.