Did you ever wonder why lending companies offer approvals with an expiration date?

Most people say this has to do with the possible changes in credit over time, but this is not always true. It has to do more with reserving the funds for that particular business.

When a lender provides an approval, those funds are then set aside for that one customer and can’t be accessed or offered to anyone else. This is done to minimize risk but, at the same time, maximize the lending potential. Lenders will reserve funds for any customer or business for up to 90 days. A customer can access those funds within that time before the approval expires.

Should the approval expire, the customer can opt to extend it or void the approval. If the customer voids the approval, those funds would be available to another prospective customer needing equipment for their business.

If you are interested in obtaining equipment or a small business loan for your business or would like to learn more, please give us a call and talk to one of our account managers today.