# What Lenders Look At Beyond Credit Canonical URL: https://fundmyequipment.com/learn/what-lenders-look-at-beyond-credit/ Last modified: 2026-05-29T19:39:17+00:00 Type: efin_guide ## Summary What Lenders Look At Beyond Credit. Comprehensive guide. ## Content Personal and business credit scores are the headline number, but equipment lenders look at much more. Knowing what else they evaluate helps you present the strongest application. The six factors beyond credit score 1. Time in business Most equipment lenders want at least 2 years operating history. Some go down to 6 months. Startups (under 6 months) have a narrow lender pool and pay more. Time in business is verified through: Business formation documents (state filing date) Tax returns (year filed) Business bank account opening date EIN issuance date The earliest of these documented dates establishes time in business. 2. Revenue and revenue stability Lenders look at three things: Annual revenue: Most equipment lenders want gross annual revenue 3x to 5x the loan amount. A $200,000 loan typically needs $600,000 to $1,000,000 annual revenue. Monthly consistency: Bank statements over 3 to 12 months. Lenders look for stable deposits, not big swings. Trend: Year-over-year revenue growth, flat, or decline. Growth helps, decline hurts. 3. Cash flow and debt service coverage The key metric is debt service coverage ratio. Operating cash flow divided by total debt payments. Lenders want at least 1.20 to 1.35, meaning you generate 20% to 35% more cash flow than your debt obligations. For larger deals (over $500,000), lenders calculate this from full financial statements. For smaller deals, they estimate it from bank statements. 4. Industry and use case Some industries are favored. Others are restricted or excluded: Generally favoredCommon restrictions Construction (residential, commercial)Cannabis (state-legal but federally illegal) ManufacturingAdult entertainment HealthcareGambling AgricultureCryptocurrency mining Trucking and logisticsTelemarketing Professional servicesSome commission-only sales Restrictions vary by lender. Many will still finance restricted industries at higher rates and lower LTV. 5. Equipment itself The collateral matters because the lender's recovery if you default depends on it. Lenders evaluate: Brand: Major brands (Caterpillar, John Deere, Komatsu, Mack) get better terms than lesser-known. Age: New: best terms. 1 to 5 years old: standard terms. 6 to 10 years: shorter terms, higher rates. 10+ years: limited lender pool. Type: Equipment with strong used-market demand (excavators, trucks, cranes) gets better terms than niche or custom-built equipment. Resale geography: Equipment that sells across regions (mobile, transportable) gets better terms than installed equipment that is harder to repossess. 6. The borrower team For deals over $250,000 or with weaker credit, lenders look at: Personal financial statement of owners: Net worth, liquidity, real estate holdings Industry experience: How long the owners have been in this specific industry Co-borrowers and personal guarantees: Who else is on the hook A well-credentialed owner with 20 years of industry experience offsets some credit weakness. A novice operator at a startup faces a steeper underwriting standard. How to present your application well Beyond the standard application: Brief business narrative. 1 to 2 paragraphs on what the business does, how long you have been in it, and what the equipment will do. Use case for the equipment. Specific revenue or savings the equipment generates. "Adds 1,200 hours per year of billable utilization" or "replaces $4,500/month rental cost." Year-over-year revenue trend. A simple chart showing 3 years of revenue. Major customers or contracts. If you have multi-year contracts, mention them. Insurance plan. Confirm you have commercial insurance and can name the lender as loss payee. Red flags that hurt Recent NSF (non-sufficient funds) charges on bank statements Outstanding tax liens Multiple merchant cash advances Recent bankruptcy (under 2 years) Rapidly declining revenue Significant existing debt without matching cash flow Repeated application activity (5+ inquiries in last 30 days suggests shopping or distress) What helps offset weak credit If your credit score is below typical thresholds: Higher down payment (20% to 30%) Co-borrower or stronger personal guarantor Pledge of additional collateral Strong cash reserves visible in bank statements Long industry experience with documented success Specific contract or customer commitment that supports the equipment use Apply with the full picture When you apply, use the optional notes field to add context. The story behind the application often matters as much as the numbers.