TD Bank Equipment Financing Review

Pros

• Suited for small to large businesses
• Low interest rates
• Few additional fees

Cons

• Stringent borrower qualification
• Only operates in 16 states

Overview

T.D. Bank, N.A. is the American branch of Canadian bank Toronto-Dominion Bank. The division is based out of New Jersey and operates in 16 states, primarily on the East Coast. They also serve Washington, D.C.

East Coast businesses with excellent credit that are looking for a large, but not too large, alternative to the Big 4 banks may find TD provides the lending muscle, good rates, and easy access they’re looking for.

Read on and see if TD Bank is the right solution for your company.

Business Lending Products

• Business term loans
• Lines of credit
• SBA loans
• Commercial lending
• Equipment financing

Borrower Qualifications

Below are the qualifications for TD Bank loans. The bank doesn’t explicitly state a minimum credit rating for all loans, but for unsecured loans you’ll need a FICO score of 680 or higher. Since equipment financing is usually secured, this isn’t likely to apply here. There are no set revenue restrictions, but you should expect to have at least $1.50 in revenue for every $1 you borrow.

You’ll also want to be in one of the states in which TD operates:

• Connecticut
• Delaware
• Florida
• Maine
• Maryland
• Massachusetts
• New Hampshire
• New Jersey
• New York
• North Carolina
• Pennsylvania
• Rhode Island
• South Carolina
• Texas
• Vermont
• Virginia
• Washington, D.C.

Industries Served

TD Bank can finance equipment for the following industries:

• Municipalities
• Banking
• Aircraft
• Computer Equipment
• Over-the-road Transportation
• Construction
• Dental
• Laboratory
• Medical
• Marine
• Office
• Printing and reproduction
• Quality control
• Rail
• Retail
• Telecommunications
• Manufacturing
• Maintenance

Terms & Fees

TD offers several lending products to small businesses.

Unfortunately, TD discloses very little information about their equipment financing products upfront. To get a complete rundown of what the bank offers, you’ll need to talk to your local TD bank representative.

Not ready to jump in your car yet? Here’s what you can expect of equipment financing more generally.

Equipment financing generally falls under two large umbrellas: equipment loans and equipment leases.

Equipment loans closely resemble other types of business term loans, with a few key differences. Since the equipment you’re purchasing can serve as collateral, equipment loans are almost always secured loans. As such they tend to come with slightly lower interest rates and more favorable terms than an unsecured loan from the same lender would. There will, on the other hand, be much greater restrictions on what you can use that money for (see above for the types of equipment TD covers). Policies vary from lender to lender, but traditionally, equipment loans cover most but not all of your equipment’s price tag, usually about 80 percent.

Equipment leases, on the other hand, are a whole other animal. In broad strokes, leases can be broken down into capital and operating leases. At this risk of oversimplifying, a capital lease fills a niche similar to a loan while an operating lease is closer to renting.

Capital leases are typically designed to transfer ownership rights to the lessee. Over the course of the capital lease, the lessee will have paid the vast majority of the cost of the equipment, usually culminating in a small residual payment at the end of the term. This payment can be ridiculously low–$1 buyouts are a common type of capital lease. As a general rule, the larger your monthly lease payments are, the lower your residual will be.

Because you’re paying off most of the equipment’s value, there isn’t much of an incentive to return the equipment to the lessor (the bank) at the end of the term. Because of this, you’ll only want to seek out a capital lease if your plan is to own the equipment. This makes them more ideal for equipment that doesn’t go obsolete quickly.

Operating leases almost always come with shorter terms. In these cases, the lessor retains ownership of the equipment, which it then rents to the lessee. In the past, this allowed businesses to write off their lease payments as operating expenses. This is still possible, but as of 2018, fewer operating leases will qualify for that kind of tax arrangement. Unlike the capital lease, operating leases are oriented around the idea that you’ll return your equipment to the lessor at the end of the term. Many, will, however, still give you the option to buy at the end of the lease, but this generally isn’t an efficient way of purchasing equipment. For example, you may be able to buy the equipment you leased at fair market value (FMV) at the end of your term.

There are numerous variations on both operating leases and capital leases that affect term lengths, residuals, monthly payments, and tax incentives. Make sure you have a sense of how you want to account for your new equipment before you sign a lease.

Application Process

TD Bank is a traditional financial institution, so don’t expect online applications with slick UIs. You’ll need to contact your local TD Bank branch and speak with a representation to get started.

If you’re in a rush and need less than $50,000, be sure to ask about the Express Lease option, which features a less-than-24-hour turnaround time and a simplified application process.

Sales & Advertising Transparency

As TD Bank’s personal loans pages provide a good amount of information to prospective borrowers, I was disappointed by the amount of information they provide about their equipment financing programs. Even worse, the information that is available isn’t always laid out conveniently, requiring scrolling past unrelated products or links to other parts of the site.

Customer Service & Technical Support

You can reach customer service by phone.

You can also schedule an appointment by contact form. There’s a chat feature on the site that’s supposed to be active Monday through Friday, 8:30 – 5:30 ET, but in my experience, it’s a bit of a crapshoot as to whether it’ll be available.

You can also interact with TD Bank on social media:

• Twitter
• Facebook
• Instagram
• YouTube
• LinkedIn

As is the case for most big financial institutions, customer experiences vary greatly by location and circumstance. Overall, TD Bank seems to come off better than many of its other large competitors.

User Reviews

TD Bank is accredited with the BBB and as of writing it has maintained an A+ rating with the watchdog organization. User reviews on the site aren’t quite as kind, with the aggregate score clocking in at just over 1-out-of-5 stars. As is often the case with banks, many of these complaints relate to banking fee disputes.

Negative Reviews & Complaints

Here are some issues you may want to consider before applying for a loan or lease from TD:

• Regional: You’ll have an easier time doing business with TD if you’re on the East Coast and have a branch nearby.
• Traditional Application: It may be a little faster than it was in the old days, but you’re going to need to fill out a bunch of forms rather than rely on easy, online convenience.
• Harder To Qualify: Compared to alternative lenders, companies will have a harder time making the credit cut with TD.

Positive Reviews & Testimonials

Advantages of financing with TD include:

• Express Options: TD offers expedited equipment financing to businesses seeking less than $50,000.
• Versatile Products: Banks like TD often have products that are more flexible and more numerous than you might find with an alternative lender.
• Better Rates: While TD’s rates aren’t the best in the business, they’re lower than you’d find with many other lenders.

Final Verdict

TD is a medium-sized bank for people who might be turned off by the sheer scale (and questionable reputations) of the Big 4. East Coast businesses looking to finance equipment will find a flexible lender with a traditional feel. Unfortunately, the bank doesn’t provide too many tools to compare products without speaking to them directly. As is the case with many banks, your existing business relationship will be one of the bigger determining factors.

Need other equipment financing options? Check out our equipment lending comparisons.

Looking for a loan or line of credit and want an alternative to TD Bank? See how they compare to other bank lenders. Don’t qualify for a bank loan? You can still get funding through alternative sources.

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