Equipment Finance Insights

TIB – Time in Business
Not surprisingly, this is one of the best signs of business stability. We always check with each applicant’s state to confirm when a business was incorporated.

Pay History (commercial) Data and Score
Using national data reporting bureaus, finance companies check the payment history of a business (your customer), to see if they’ve been making payments on time.

Balance Sheet and Income Statement
On larger transactions we generally ask for the last two years of financial data. Some finance companies focus on cash flow, but at First Western Equipment Finance/First Western Bank & Trust, we focus on the equity held in the business.

Equity
To simplify, the overall value of the business after earnings, losses and liabilities. A simple example: business assets – liabilities + retained earnings (profits) = equity.

PG – Personal Guaranty
Typically, a personal guaranty is used for startups or for businesses with lower or less established credit. A personal guaranty means the owner(s) sign off that they are personally responsible for making the payments.

CBR – Credit Bureau Report
Is a personal credit score from a major reporting service. Typically used for sole proprietors, partnerships and closely held corporations.

Entity or Business Structure
The type of filing the business has with the IRS. This includes LLCs, corporations, partnerships, sole proprietorships and municipalities (government).