Chase Equipment Financing Review
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- Date Established
- New York, NY
- Suited for large businesses
- Excellent rates
- Poor public reputation
- Opaque terms and fees
JPMorgan Chase Bank, N.A., based in Columbus, is the result of a 2000 merger between Chase Manhattan Bank and J.P. Morgan & Co. It’s the largest American bank by assets and the largest in the world by market capitalization.
Among its many financial services is equipment financing, which serves mid-sized and large corporations through its business and commercial divisions respectively. Chase’s deep pockets and market presence make it a convenient option for businesses that qualify, but its scandal-ridden behavior and persistent customer service issues warrant caution.
When looking at any kind of financing, we encourage you to compare your options and offers.
Table of Contents
Chase Equipment Financing provides the following types of business funding:
- Equipment financing
Chase serves the following industries:
- Food processing
- Higher education
Chase doesn’t disclose hard minimums for its customers, though expect to run into difficulties if your credit score falls below the high-600s, or if your business is less than two years old. Additionally, Chase may require you to have a business checking account to qualify.
|Time in business:||Unknown|
|Revenue:||$20 million – $20 billion (commercial)|
Under $20 million (Chase for Business)
You’ll also need to be based in one of the following states:
- New Jersey
- New York
- West Virginia
Terms & Fees
Chase hasn’t responded to our inquiry, but here’s what we were able to gather:
|Term length:||Up to 7 years or 75% of equipment’s estimated useful life|
|Buyout agreement:||Equipment loans; Tax leases; Operating leases; TRAC leases; Split TRAC leases; Synthetic leases; Line of Credit|
|Effective APR:||Learn more|
Chase offers 100% equipment financing, along with up to 10% of soft costs (shipping, installation, etc.).
Equipment financing comes in a number of different configurations, including both loans and leases. Equipment loans are very similar to other types of loans, but the equipment purchased serves as part or all of the collateral. This lowers risk and can result in lower interest rates.
Leases come in a variety of different forms. Broadly, leases fall into two broad categories: finance leases and operating leases.
If you’re looking for a simple loan alternative, you’re probably looking at a finance lease. Sometimes called capital leases or conditional sales agreements (CSAs). In a CSA, you’ll assume all the responsibilities and benefits of ownership near or at the beginning of the lease. Finance leases typically feature inverted relationships between your monthly payment and the amount of money you’ll owe at the end of your term (the residual). The higher one is, the lower the other.
Operating leases, sometimes called “true leases,” function as a form of rental agreement. In most cases, the lessor (the bank) will retain ownership of the equipment while allowing you to use it for the length of the term. At the end of the lease, you have the option to either buy or return the equipment. If you decide to purchase, you’ll usually pay a significantly higher residual fee than you would with a finance lease, an amount equal to the equipment’s fair market value (FMV) at the end of the lease.
There are a number of variations on operating leases. TRAC leases are a common way to lease commercial vehicles. Traditionally, most operating leases were considered tax leases, meaning that the lessor, not the lessee, retained ownership of the asset both formally and for tax purposes. However, starting in 2019, only certain operating leases will still qualify as tax leases. Chase offers a type of operating/tax lease that is rarely seen these days: the synthetic lease.
Chase also extends lines of credit for equipment purchases.
You won’t find much information about rates disclosed up front, but Chase has a reputation for offering rates near prime.
Depending on the size of your business, you can query Chase through its commercial or business lending divisions.
Chase, like most banks, is numbers driven, so expect your credit rating, business history, revenue, and reputation to play heavily into their decision-making process. Chase still does most of its business in person, so you should be prepared to head into a local branch to speak with a representative. In most cases, you’ll want to know the equipment you’re buying to help expedite the process.
As is often the case with big, traditional banks, you should be prepared for a long, exhaustive application process.
Sales & Advertising Transparency
Chase seems willing to part with a little more information than many of its similarly sized competitors. That said, don’t expect to see interest rates or credit requirements on their websites. As is often the case with the larger banks, information is spread across a number of different divisions and categories.
Customer Service & Technical Support
Large corporations tend to incur a lot of customer wrath by virtue of the size of their customer base alone. Even taking size into account, however, Chase seems to have a lot of customer complaints. The common thread linking most of them? Chase was unresponsive to their complaints.
You may have heard that the big national banks aren’t exactly known for good behavior. Chase won’t do much to change that. Chase currently rates an F with the BBB for failure to respond to complaints, as well as taking a long time to respond to the complaints that they do respond to.
Negative Reviews & Complaints
Chase has been the subject of several government actions and numerous complaints. Issues include:
- Scandal-ridden: Chase has been involved in some of the biggest financial scandals of the last decade, including currency manipulation.
- Unresponsive to customer complaints: BBB has logged 104 recent customer complaints were unaddressed by Chase.
- Rates can be high if you don’t have great credit: Customers report that, while Chase’s rates are pretty good for customers with strong credit, customers who come in at the lower end of what the bank will accept can face high interest rates.
Positive Reviews & Testimonials
Despite the issues above, there are advantages that a large, venerable banking institution like Chase can provide:
- Enormous resources: Chase can easily finance both mid-sized companies and international corporations.
- Variety of options: Chase offers a broad range of leasing and loan options.
- Locations: Chase has a presence in all 50 states, making it easy to do business with them in person.
Major banks like Chase pose an interesting problem. They are the biggest acts in town, able to (in theory) offer the most money at the best rates. The trade-off is convenience, accessibility, not to mention dealing with organizations that have a history of bad, sometimes criminal behavior. Can you do business with them and have a great experience? Absolutely. The bigger issue for many businesses will be meeting Chase’s qualifications for lending.
Didn’t make the cut? Check out our equipment financing comparisons.
Business Loan Rating Criteria.