Celtic Commercial Finance: The Ultimate Guide

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The Ultimate Guide to Celtic Commercial Finance

Odds are, your business probably needs equipment in some form or fashion. However, you may not have the cash on hand to buy expensive equipment without a little help. That’s where financial institutions step in.

One of these best banks for business loans that help businesses get their hands on the equipment they need is Celtic Commercial Finance, and you might’ve come across their name in your search for equipment help.

To help you out, we’ve compiled a guide to Celtic Commercial Finance and navigating your business loans options beyond what they’re able to offer.

Ready to get some new equipment without emptying your business’s pockets?

In this guide, we’ll walk through exactly how Celtic Commercial Finance works, and other alternatives to solve your equipment financing needs.

The Rundown on Celtic Commercial Finance

Celtic Commercial Finance is a wholly-owned subsidiary of MB Financial Bank that specializes in full-service equipment leasing.

They’ve been at the equipment leasing game for 27 years and have leased over $2 billion worth of equipment to over 20 different industries. It’s important to note that they lease equipment, which is different from if you were to buy a piece of equipment, and finance it with a loan from a lender.

That aside, from graphic arts to trailers, Celtic Commercial Finance helps businesses get equipment of almost any kind.

Think the equipment you need might fall somewhere within that range? It very well might.

Let’s take a look at the details.

The Details on Celtic Commercial Finance’s Equipment Leasing

So, now that we’ve covered the basics, let’s take a look at exactly what Celtic Commercial Finance can offer small business owners like you.

You already know that Celtic Commercial Finance offers equipment leasing, but there’s still more to it—they actually offer multiple structures of equipment leasing.

Explaining these can be complicated, so we’ve provided some concrete examples to help illustrate the point.

Operating Leases

An operating lease is probably what you picture when you picture a typical equipment lease—you’ll pay a recurring payment for having and operating a piece of equipment that isn’t technically yours.

However, Celtic Commercial Finance offers various end-of-term options that you don’t typically see with equipment leasing. For instance, they allow options of renewing your lease, buying the piece of equipment at fair market value, or simply returning the equipment to the lessor.

Capital Leases

For business owners who know they’ll prefer to own the equipment after the lease ends, Celtic Commercial Finance also offers capital leases.

When you sign onto a capital lease, you’ll establish an end-of-term buyout amount. The best part? Depreciation benefits will accrue over your lease term, as well.

Specialized Leases

If you have very specific requirements for your lease, Celtic Commercial Finance is willing to look into specialized leases, as well.

Among other lease structures, step leases, PRO leases, deferred payment leases, and note and security agreements are available through Celtic Commercial Finance.

Purchases/Leasebacks

This lease type involves a lessor purchasing a piece of your company’s equipment and immediately leasing it back to you. The leaseback could either be structured as an operating lease or a capital lease. That means, you can either choose to buy the equipment back at the end of the lease or choose to return it to the lessor.

If your business needs a quick jolt to its cash flow, then a purchase/leaseback set up through Celtic Commercial Finance could be a good option for achieving this.

The Advantages and Disadvantages to Leasing with Celtic Commercial Finance

The Advantages to Leasing with Celtic Commercial Finance

Having covered all of your different options within Celtic Commercial Finance’s equipment leasing arsenal, it’s time we take a step back in order to take a look at the big picture.

What are some of the main reasons you should look into equipment leasing through Celtic Commercial Finance?

Well, there’s really only one main advantage, but it’s a big one.

Let’s take a moment to consider why you should consider working with Celtic Commercial Finance.

    Flexibility

    All in all, Celtic Commercial Finance provides extraordinary flexibility in their equipment lease. From the many types of equipment they lease, to the various leasing structures they offer, the flexibility the leasing through Celtic Commercial Finance comes with is a huge draw for small business owners.

The Disadvantages to Leasing with Celtic Commercial Finance

That said, leasing equipment through Celtic Commercial Finance also comes with its fair share of downsides.

Not the least of which comes built into the nature of leasing equipment in the first place.

    Unowned Equipment

    Quite simply, while still paying large amounts of money to use the equipment, your business won’t have ownership of the equipment.

    As such, the piece of equipment won’t be considered an asset, but rather a liability. This will come into play in determining your company’s monetary worth, among many other things.

    At the end of the day, if your business can swing it, it’s far more savvy to buy equipment.

The Alternatives to Celtic Commercial Finance: Equipment Financing Details

If Celtic Commercial Finance isn’t the right fit for your business, how else can you get the money you need to purchase your business’s equipment?

Here are the alternatives to consider for your equipment financing needs.

Equipment Leasing versus Equipment Financing

You might be asking yourself, why would I cough up a huge lump sum of cash for a piece of equipment when I could just lease it?

Well, the thing is, you don’t necessarily need to pay off all of your equipment’s worth right when you purchase it.

How does that work, you ask?

Well, it’s called equipment financing. This is another option that allows you to own equipment while you pay it off gradually. It works like a secured loan for your business for the specific use of purchasing equipment. Equipment financing can cover up to 100% of the cost of the equipment you need.

Not to mention, with this option, you’ll be able to access even better rates than traditional business financing, because the piece of equipment in question will act as a form of collateral.

The way we see it, with ownership and gradual pay off, equipment financing is an option that offers the best of both worlds.

The Details on Equipment Financing

Does equipment financing sound like the perfect way to get your hands on the equipment your business needs in order to grow?

We think so, too.

Because it’s such an ideal option, we want to walk you through the logistics of looking into equipment financing.

Let’s look closely at the details on all things equipment financing.

    Equipment Financing Amounts

    As we mentioned, depending on the equipment in question’s worth, equipment financing can cover anywhere up to 100% of how much you’ll have to pay upfront for the equipment.

    Equipment Financing Rates

    Buy and large, equipment financing will often come with more affordable APR’s than other options because the equipment itself secures the loan.

    As such, equipment financing will come with interest rates as low as 8% and up to 30%.

    Equipment Financing Term Length

    Generally speaking, equipment financing will reach maturity at the end of your equipment’s projected life.

    So, say you get equipment financing to acquire a truck that’s projected to last 10 years. Your lender will schedule your payments with a term that will span the duration of this truck’s projected longevity.

    Equipment Financing Funding Speed

    Even better? If you qualify, you’ll be able to secure equipment financing in as little as 2 business days.

    Equipment financing lenders realize that deals and opportunities won’t wait for you to round up the cash, so they try to get you the cash for your equipment quickly.

Equipment Financing Lenders

Finally, it’s time to take a look at which lenders provide loans that can be used as equipment financing. Though most any small business loan can go towards buying equipment, not all small business loans can take equipment as collateral.

Two lenders in particular—Direct Capital and Funding Circle—do equipment financing particularly well.

If you’re hoping to secure crucial equipment for your business without having to worry about leasing it, then look in these two equipment financing options before opting for Celtic Commercial Finance.

Also, it’s important to note that some lenders will offer business loans that can be used for the purposes of equipment purchases, while not explicitly being equipment loans. Bank loans, for instance, might offer products that could fit your equipment financing needs more affordably. Some options to check out are Citibank business loansBank of America SBA loans, a Capital One business line of credit or BB&T business loans.

The Bottom Line on Celtic Commercial Finance

Securing Equipment Financing

All of these details on equipment financing are all well and good, but without knowing what it takes to secure equipment financing, then you’ll never be able to reap its benefits.

Equipment financing comes with a few general, minimum requirements for applicants to qualify—you’ll need to have at least 11 months in business, at least a 600 FICO score, and at least $100,000+ in annual revenue.

To be sure, these are general minimum requirements, and meeting them doesn’t ensure that you’ll be able to secure equipment financing. However, if you do meet these requirements, your chances of securing financing for equipment are much higher.

Having combed through all the details on Celtic Commercial Finance and its best alternatives, what’s the next step?

It depends what effect all the facts on Celtic Commercial Finance had on your plan of action.

Are you now wavering in your decision to lease equipment for your business? Or, are you ready as ever to move forward with leasing equipment?

You’ve likely already gathered our two cents at this point, but if you’re asking us, we consider equipment financing to be a far better option than leasing in almost every case.

Our advice is to seek equipment financing first before you decide on leasing equipment. And unless you’re unable to qualify for equipment financing, buying the equipment and paying it off gradually is far more beneficial for your business than renting it.

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Vice President and Founding Editor at Fundera

Meredith Wood

Meredith Wood is the founding editor of the Fundera Ledger and a vice president at Fundera. She launched the Fundera Ledger in 2014 and has specialized in financial advice for small business owners for almost a decade. Meredith is frequently sought out for her expertise in small business lending. She is a monthly columnist for AllBusiness, and her advice has appeared in the SBA, SCORE, Yahoo, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, MyCorporation, Small Biz Daily, StartupNation, and more. Email: meredith@fundera.com.
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