Vendor Financing 101

“It's the things you learn after you know it all that count”
-John Wooden (October 14 th 1910 – June 4 th 2010)

In our daily conversations with business owners and corporate executives we are constantly being told that business is getting much better and there is a general acknowledgment that the economy is getting stronger. However, many in the business world are trying to hold back judgment as they are unclear on exactly how strong the forward momentum is. First Star can directly attest to this dynamic. Our volume of incoming applications / funding requests has tripled since February. We have seen a significant increase in demand for equipment financing over the last several months. In fact, we exceeded the highest monthly application volume in April that we have ever received in our ten year history. The previous milestone was set in 10/02' again, coming out of a recession (albeit a much shallower and shorter one than the Great Recession that we have just come out of).

Many of the equipment suppliers (vendors, dealers, distributors, etc.) that currently work with First Star have stated that their quoting activity has increased substantially in recent months. Our job is to help convert these quotes to orders and ultimately to invoices for equipment sales. This is being accomplished by offering attractive monthly payment plans through either a term loan or an equipment lease.

If you are not currently offering your prospective customers more than one way to pay for your proposed equipment sale, you may be missing out. Assuming upfront payment as the only option will absolutely result in a lower conversion rate with respect to quotes turning into orders / invoices. Now that the economy is getting back in gear it may be time for you to revisit your sales strategy and incorporate a good payment plan option through First Star Capital.

Each year American businesses invest more than $1 trillion in capital equipment. On average more than 2/3rds of this is financed through a combination of term loans, equipment leases and utilization of existing lines of credit. Eight out of ten companies lease some or all of their equipment.

If your company is not currently offering an attractive payment plan option to your customers it is safe to assume that one of your competitors is! Offering an effective leasing or financing option keeps you in control of the sale. An attractive payment plan option will help you retain profit margins, offer multiple payment options, and close sales faster.

First Star Capital can provide funding for nearly any type of capital equipment that a business or Municipality might require. First Star is a small to middle ticket lender that funds individual transactions as small as $10K and as large as $10mm.

We routinely approve and fund equipment such as computers, servers, software, phone systems, furniture, energy management systems, HVAC units, chillers & VFD's (Variable Frequency Drives), medical equipment, laboratory instrumentation, waste management equipment (garbage trucks, compactors, balers – even carts & containers), commercial vehicles, manufacturing equipment, machine tools, packaging equipment and food processing / production equipment. First Star Capital provides attractive fixed rate financing or leasing for any type of equipment as long as the company is credit worthy and the equipment being acquired would be considered essential or mission critical to the operations of the business.

Progress Payments – This is typically referred to as a Pre-Fund and it allows your company to receive a partial payment(s) upfront prior to the equipment being delivered and installed. A Progress Payment or Pre-Fund from First Star would substitute for a deposit or down payment that might be required from your customer which results in lower upfront costs for your client.
Used Equipment – First Star can fund many types of used equipment. Depending on the age of the asset we may need to limit the repayment term however we typically don't have age restrictions.
Software Only – We routinely issue approvals for funding requests comprised of 100% software. Many lenders & lessors require hardware to be involved but First Star understands that software can be essential or mission critical for many businesses and we continue to be a pioneer in software only leasing.
Private Label Programs – First Star has some of the most robust private label financing / leasing programs available in the industry. Your company can offer leasing / financing under your name with a private label funding program through First Star Capital. With a minimal volume commitment we will offer private label credit applications, lease / finance proposals, payment calculators, marketing flyers and much more. All of these resources are available both online and offline.

If your company in not currently offering a financing or leasing option on your proposed equipment sales, now would be a good time to experience the First Star advantage.

Vendor Financing 101 is a strategic tool box for top performing equipment vendors nationally. Businesses that sell equipment experience an immediate jump in sales when they implement an effective equipment financing or equipment leasing program. Business owners and sales people constantly report sizeable increases in their sales volume after implementing an equipment finance program for their customers. The vendor finance group is the fastest growing division within First Star Capital. Read More »