Do customers act on credit approved beyond the original application amount?
In a Secured Research survey of more than 4,000 small business borrowers and 1,200 finance companies and brokers, nearly eight in 10 buyers of commercial equipment said they would use credit amounts approved above their current capital need in 60 days; however, only two in 10 brokers or finance providers said they believed similarly.
Here’s an industry breakdown:
| Industry | Buyers That Would Use Additional Credit Approved | Financiers That Believe Buyers Would Use Additional Credit |
| Material Handling | 39% | 12% |
| Printing | 54% | 20% |
| Packaging | 81% | 23% |
| Technology | 22% | 31% |
| Construction | 62% | 27% |
| Vocational Truck | 88% | 21% |
| POS | 15% | 10% |
| Manufacturing | 49% | 18% |
Why the disconnect?
Lenders tend to be myopically focused on the specific request without digging into the larger need. Further, only 6% of recent borrowers recall being offered more credit than applied for or being asked about other credit needs, according to the survey.
If you offer working capital, ask about their equipment. If you’re equipment-driven, ask about working capital. As a financier, if you can offer additional credit beyond the immediate application need, you’ll sell more financing. If you can get your dealers to promote your ability to offer credit beyond the immediate equipment need, they’ll sell more equipment.
