MANAGING EXPECTATIONS:HOW COVID-19 HAS IMPACTED THE CREDIT PROCESS
The year 2020 and the COVID-19 pandemic effects have created a roller coaster for every person and industry worldwide. Although many of our customers are experiencing an uptick in business – like the tree care, landscape, and construction industries – it is still not “business as usual.”
Even within the equipment finance industry, we are experiencing changes, especially related to our credit process. “We have a few more questions we are required to ask our customers as we begin the application process, due to the coronavirus,” said Andrew Halladay, CLFP and Business Development Officer at Oakmont Capital Services. “However, we’re asking these questions to better understand our customers’ businesses and ensure that securing a loan is the right financial move. The questions give us insight into how risky a loan is for all involved.”
And it is not just Oakmont Capital Services that has added an extra layer to our process; it is most lending sources. Why are these questions related to COVID-19 so important? According to Oakmont Capital Service’s Syndication Manager and CLFP, Kayla Perlinger, “At a high level, Oakmont wants to discuss how COVID-19 has impacted a customer’s business. The more we can understand the effects, the easier it is to obtain the best financing possible. By attaining greater detail upfront, we can provide customized financing solutions via a more streamlined process.”
FAQ’s Regarding The “New Normal” Credit Process
Question: So, what exactly are these additional COVID-19 questions all about?
Answer: “It comes down to discussing the customer’s current needs for the financed equipment within the pandemic environment,” said Perlinger. “With all the variables and unknowns caused by the coronavirus, we ask questions to understand how the shutdown has impacted current operations as well as the plans for the future. In tandem with the customer, we also estimate the volume of business the customer forecasts in the near future to ensure the loan is a practical business decision for us both.”
Question: With the new stipulations in place, is it harder to get an equipment loan right now?
Answer: “In short, no. There is still financing out there, and we still conduct business daily,” added Perlinger. “We are so proud that we can continue to do work with many partners to support our customers, and secure equipment financing. We also want to make sure the timing of the financing is right for our customers’ business while dotting all the ‘i’s’ and crossing all the ‘t’s’ throughout the application process.”
Question: How much longer is the process now? Can I still get a loan quickly?
Answer: “Many times, a customer contacts me after they’ve chosen a piece of equipment or because they need a loan quickly to purchase a piece of machinery to get a job done,” said Halladay. “I still encourage those calls, but I want to manage expectations and communicate that the process is a bit different from six months ago, and things might take slightly longer.”
Question: Is any business exempt from the COVID-19 questions? Can I skip them to make the process move faster?
Answer: “The COVID-19 questions are asked of every applicant, so circumventing the process is not an option. However, what I do suggest is getting pre-approved for a loan,” said Halladay.
“You can still complete our simple online application to get started, and then one of our finance professionals will follow up to get the answers to the required COVID-19 questions. Together, we will decide whether it is the best time to invest in equipment for your business and work through any additional requirements brought on by the pandemic,” he added. “Plus, if you are not planning to purchase equipment until the fall, your pre-approval stays valid for up to 90 days, so why not plan ahead?”
Recap: Today’s Financing Process
Some changes in the credit process brought on by COVID-19 were put in place to protect both lenders and customers from a financial standpoint. It is important to note that Oakmont Capital Services has integrated the required COVID-19 questions into our process for a seamless experience, even though there is one more step required.
Also, we are still funding daily, so if you are in the market for equipment financing, please contact us. We have options for all types of credit, including payment deferrals. Plus, you will work with a dedicated finance professional who will hold your hand (virtually, of course!) throughout the entire process.
If you have questions about the financing process, the new COVID-19 questions, or equipment financing in general, please email firstname.lastname@example.org, and an OCS team member will reach out to you shortly.
Stay safe and stay healthy!
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