By Mary Francik – GreatAmerica: Picture this: you have recently gained a new customer and are excited to begin doing business with them. The new revenue and potential for more growth is promising for your business and you are eager to see where this partnership will go. Just one more step – your customer’s credit needs to be approved for financing. And, cue the bump in the road: your customer is not able to reach an approval. Without an approval, you are unable to help them acquire the equipment they need and you are missing an opportunity to create a long-standing customer relationship.
There are several reasons why a business may not get approved initially. Perhaps their business has limited tenure or historically they have paid cash and have not established business credit. A decline may not be a hard “no” but rather an indication that your finance partner needs additional information. Whatever the situation is, you want to ensure an opportunity to serve a customer’s needs. So, what options do you and your customer have?
During the six years I have been working in the financial industry at GreatAmerica, I’ve worked with a number of office technology providers who have run into this very roadblock. Sometimes, additional context and information about your customer can help us determine if there are other avenues we can take. While we will not approve deals that would be counterproductive to our mutual business objectives, it is important to look at the big picture and understand why an application may have been originally declined. By digging a bit deeper, we may uncover additional details that allow us to grant an approval.
What Are My Options?
If your customer is not able to reach an immediate credit approval, there may be two options we can explore:
- Personal Guarantee:with this type of guarantee, the business owner’s social security number is requested, and their personal credit is reviewed. A history of good personal credit is a positive attribute and may offset the elements preventing the business alone from getting approved. This may allow the owner to personally support the transaction, in addition to their business.