SC Equipment Funding has announced a new program to protect consumers and businesses from ill conceived funding programs. Just as the mortgage industry has been hit by sub-prime loans, the equipment funding industry is seeing its own share of risky funding programs. To protect consumers and businesses from entering into these agreements, SC Equipment Funding will provide a “Free Review Service” of any funding agreement for any individual or business before it is finalized.

The “Free Review Service” will explain to consumers the risks associated with using their homes to raise operating or equipment purchase capital for their businesses at extremely low rates. Just like the sub-prime mortgages, these loans appear very attractive because of their low interest rates. Using these kinds of funding programs for operating and capital expenses, however, creates a new set of problems. SC Equipment Funding's “Free Review Service” is designed to expose the problems programs such as these create.

“We just want to make sure that people know what they're getting into,” explains SC Equipment Funding's Bruce Braviroff, “We've seen cases where individuals didn't realize the ramifications of borrowing against their personal residences.” “Funding a business this way,” continues Braviroff, “causes the debt to appear on both their personal balance sheets and also on their personal credit reports.” Most of the time the customer’s personal score is lowered. Under generally accepted accounting practices (GAAP), the debt should also be accounted for as a “loan from shareholder” on the company’s balance sheet. “If you think about this,” explains Braviroff, “it really double states the debt since it is on the customer’s personal credit report and also on the company’s balance sheet.”

The “Free Review Service” will also help identify funding agreements that have a very long amortization. “Some of these amortization periods far exceed the useful life of the equipment,” cautions Braviroff, “In 5 to 7 years, these customers will still be paying for equipment that is now obsolete as well as paying for the new equipment needed to replace it.”

Another feature of the “Free Review Service” is to educate individuals about the pitfalls of “mixing” personal and business finances. Many smaller companies get themselves into trouble with taxing agencies by failing to keep personal and business finances separate. If the tax authorities think there is a co-mingling of funds, they will start to disallow items, most of the time resulting in increased taxes, interest charges and penalties.

“If we are able to protect just one consumer or business from these programs, the “Free Review Service” will be worth it,” adds Braviroff, “We don't need another crises in the banking industry.”

About SC Equipment Funding®
SC Equipment Funding began in 1984 with the aim of providing expert equipment leasing to a wide variety of domestic businesses. From the main facility located in North Orange County, California, the company provides funding for equipment acquisition for all types and sizes of businesses. SC Equipment Funding provides lease programs through several financial partners as well as the company's own funding sources. This diversity of leasing products allows SC Equipment Funding to be extremely competitive while providing unique funding programs.

For further information about SC Equipment Funding and the company's equipment leasing programs can be found at www.scequipmentfunding.com.

SC Equipment Funding
895 E. Yorba Linda Blvd.
Placentia, CA 92870
Phone: 714-996-1298
Fax 714-200-0314