Should You Work With Us or Your Bank?

We are often asked why someone should work with us rather than their ban. The short answer is, maybe you should and maybe you shouldn't, but today I'm going to address this question.

The more dubious reps in the finance industry may attempt to slide around this subject by quoting some out of this world low rate that they can play bait and switch with later on, but the reality is, third party equipment financing is not designed to be a replacement for your banking relationship.

There are alway strengths and weaknesses, and what the matter comes down to is understanding your business goals and how your overall funding strategy relates to them. So, let's look at a few highlights–

-Rate

When it comes to raw rate, in all likelihood, no one is going to beat a well-established bank relationship (maybe in house dealer financing at 0%, but that's about it). This can be due to various potential factors such as down payment requirements, blanket liens, access to your accounts, account balance minimus, floating rates, etc.

If rate is the sole deciding factor in the question, just utilize your bank. But it almost never is, so let's look at some of those.

-Down Payment

Many banks require large down payments that can be a cumbersome drag on cash flow. A company like Voyage has programs requiring little or no money down.

-Speed & Underwriting

Banks often walk more cautiously through the underwriting process and require an abundance of hoop-jumping, sometimes taking weeks or even months to finally grant approvals.

The majority of credit approvals through Voyage are attained within 24 hours or so, and we have access to application only programs up to $500K.

-Tapping Credit Lines

This is a big one. Many of our clients who do have strong banking partnerships still work with us as specialists on the equipment side because they understand the importance of keeping their bank lines open for non-equipment needs such as marketing, staffing, materials, etc.

This is an area where no one understands your business like yourself, and our goal is simply to be a player on your team in the very specific area of equipment acquisitions. That's what we do well.

-Variable vs. Floating Rate

One of the key ways you might "pay" for a lower rate with your bank is through a variable or floating rate. This is not universal. It's just something to be aware of.

When financing with someone like Voyage, you will not deal with floating risk. Finance agreements and leases are structured with fixed rates. If you sign a 60 month agreement, your payment remains the same through the life of the contract.

-Lien Treatment

With a traditional loan or line of credit, a bank may place a “blanket lien” on business assets. On the other hand, equipment finance agreements and leases such as those offered by Voyage generally utilize collateral specific liens.

More can be said and none of these topics are universal to any one bank or lender. The point is, there is almost always far more to consider than bare interest rate, and a quick overview shows the importance of having knowledgeable finance professionals in your corner.

Here at Voyage, we do equipment, and we do it well. If you don't already have someone knocking it out of the park in this area, we'd love to set up a time to talk about how we can help accomplish your business goals.

*Voyage Capital does not provide tax, legal or accounting advice. This material is for informational purposes only. Always consult your own tax, legal and accounting advisors.*