When entrepreneurs need new equipment for their business, they should ask a basic but challenging question: “How much can I afford — both in dollars and the time spent financing all this?” A Burlington, Mass.-based company called LeaseQ attempts to change that equation, making equipment easier to get at a lower cost.
LeaseQ is an all-in-one platform. It works with more than 100 equipment-leasing companies around the country that serve roughly 25 industries, from construction to salons to restaurants.
It then pools lenders to spread their risk — enabling LeaseQ to work with entrepreneurs with no (or bad) credit history. Roughly more than half of applicants are approved, with repayment due in two to five years. Interest rates range from 4 to 38 percent, depending on a person’s FICO credit score.
Take a look at how two ’treps used it, to see how you might plan for your own needs.
Project ‘expand a gym’
Isaiah Stanback opened a 1,500-square-foot gym in 2013 called Steadfast Fitness and Performance, in Flower Mound, Texas. Last year, he planned to grow into a new 14,000-square-foot operation. Many people assumed Stanback could afford this himself: After all, he played in the NFL from 2007 to 2012. “Not everyone gets two commas in their contract,” the ex-footballer says with a chuckle, and his credit score isn’t great.
How he used LeaseQ: Stanback raised $80,000 from private investors, but he needed $100,000 more. So in late 2015, he leased through LeaseQ with a three-year repayment term and no prepayment penalties. At 18 percent, the interest rate was higher than he wanted, but other lending platforms quoted up to 35 percent. It was worth it: “In the first two months,” he says, “we’ve almost doubled what we made in the first year in business.”
Project ‘build a restaurant and a café’
Sean Woods, Jared Forman and Albert LaValley wanted to open Deadhorse Hill, the restaurant and café of their dreams, and leased a space in Worcester, Mass., last September. They then spent $90,000 on kitchen equipment, but that covered only the “restaurant” part. To serve the caffeine/café crowd, they’d need $400,000 in equipment –and it made no sense to open just as a restaurant and then evolve later.
How they used LeaseQ: They covered most of it through their personal credit, friends and family loans and a $25,000 microloan from the city. Then they used LeaseQ to finance $75,000 of equipment at a 12 percent interest rate with a five-year repayment term and no prepayment penalties. “These are the kinds of things we couldn’t afford to do on our own,” Forman says. The restaurant and café opened in April.