U.S. Bank Equipment Finance Review

Pros

• Suited for large businesses
• Good public reputation

Cons

• Opaque terms and fees

U.S. Bank Equipment Finance Overview

U.S. Bancorp is the holding and parent company of U.S. Bank, the seventh-largest bank in the U.S. by total assets. The Minneapolis-based bank finances equipment to both large and small businesses and maintains branches in 25 states.

As a large, traditional lending institution, U.S. Bank brings the deep pockets and stability one would expect from a well-known bank. That said, you’ll likely need to deal with them directly to get a sense of their rates and prerequisites for lending as they don’t give up that information on their site or to direct inquiry.

If you live in an area well-served by U.S. Bank, particularly in the Midwest, it’s probably not a bad idea to see what they can do for you. Or, if you’re looking for alternatives, check out our other equipment financing reviews.

Services Offered

U.S Bank Equipment Finance provides the following types of business funding:

• Equipment financing

Industries Served

U.S. Bank breaks down their equipment financing division into different groups focusing on specific industry clusters. Those groups are:

• Capital Equipment Group
• Technology Finance Group
• Government Leasing and Finance Group
• Small business equipment financing

Borrower Qualifications

U.S. Bank declined to provide additional information about their borrower qualifications:

Terms & Fees

Here is an overview of U.S. Bank’s equipment finance products. Be aware that availability of specific types of financing may vary depending on your industry, revenue, and credit. U.S. Bank declined to provide additional information about their financial products (sensing a pattern?):

U.S. Bank separates its equipment financing activities into a number of different groups, each offering different products and loan limits. Depending on which category you fall into, you’ll have a different point of contact with the bank.

You can approach equipment financing in a number of differences ways based on your needs. Most equipment financing comes in the form of leases or loans. Equipment loans look a lot like other loans, except that the equipment itself can serve as collateral. For this reason, equipment loans tend to have a lower interest rate than similar non-equipment loans. Be aware that equipment loans don’t traditionally cover the entire amount of the equipment; 80% is typical.

If you’re looking to have the entire cost of the equipment financed, you’ll probably want to look at leases. Leases are a complex category of financial product that, in turn, can be broken down into a number of different categories. U.S. Bank uses the popular delineation between tax and non-tax leases to group their products.

In broad terms, tax leases are arrangements where the equipment you’re leasing never appears on your balance sheet. Instead, the bank retains the title, as well as all the responsibilities and benefits of ownership. You, the lessee, are treated like a renter for tax purposes. Tax leases are usually operating leases, though not all operating leases will qualify as tax leases starting in 2019.

Non-tax leases, on the other hand, appear on your balance sheet either because the lessor transfers the title to you, or because they’re operating leases with term lengths longer than a year. Finance/capital leases are non-tax leases.

Tax issues aside, the main things to keep in mind with leases are:

• Do you want to own or return the equipment at the end of the lease?
• How much do you want to pay each month vs. the leftover amount (residual) that you have to pay at the end of the lease?

If you are financing a piece of equipment that becomes obsolete quickly (like technology), it might not be worth owning. In this case, you’ll want an operating lease, which usually means lower monthly payments and the option to return it at the end of the lease. Meanwhile, capital leases are designed to facilitate ownership, meaning the total cost of the equipment will be factored into your lease payments and residual.

Application Process

If you’re a small business looking for $250,000 or less, U.S. Bank offers a simplified version of their application. Unfortunately, there are no online applications you can fill out, so you’ll have to request the appropriate paperwork by phone or contact form. Alternately, since you are dealing with a traditional bank, you can physically go to your local branch.

Larger businesses and businesses looking for more money will want to contact the appropriate division:

• Capital Equipment Group
• Technology Finance Group
• Government Leasing and Finance Group
• Small business equipment financing

Sales & Advertising Transparency

U.S. Bank recently updated their somewhat-dated site. While it looks more modern and better organized, it’s come at the cost of some product information. The site currently presents the basics–borrowing amounts, product names etc.–but not much more.

Customer Service & Technical Support

U.S. Bank’s staff is polite and helpful, but it can be challenging to find a representative who both has the answers and is cleared to give them to you. Many user reviewers on the BBB website claimed to find it difficult to get U.S. Bank to respond to their problems in a timely manner.

User Reviews

U.S. Bank had been notable for being a large bank with an A+ rating with the BBB, but unfortunately, the bank’s rep recently has taken a hit due to violation of the Secrecy Act. They currently rate A- on BBB, with an average one-star rating from 156 customer reviews. Overall, the bank has the customer problems you’d expect: lots of disputes over fines and payments.

Negative Reviews & Complaints

Issues customers have with U.S. Bank include:

• Large And Impersonal: Many customers complained about the bank being unresponsive to their complaints.
• Billing Issues: Like most major banks, a large percentage of U.S. Bank’s customers are complaining about overdraft fees.
• Harder To Qualify: Compared to alternative lenders, companies seeking equipment financing from U.S. Bank will have a higher bar to clear in terms of credit rating.

Positive Reviews & Testimonials

Advantages of financing with U.S. Bank include:

• Deep Pockets: Larger corporations and businesses that need seven-figure financing will be able to find it here.
• Well-established: U.S. Bank is one of the larger and more stable financial institutions in the country.
• Branches Are Accessible:  Even in the digital age, sometimes it’s just easier to take care of business in person. Customers in the 25 states served by U.S. Bank branches should have an easy time finding a branch.

Final Verdict

Larger businesses, particularly those based in the Midwest, will likely find U.S. Bank’s resources and industry-specific approach to equipment financing beneficial. The express application for small businesses seeking smaller amounts of funding is also a perk.

Like many larger corporations, however, U.S. Bank doesn’t easily part with specific information and details. This might not be a problem for large businesses, but smaller companies would benefit from the ability to more easily do comparison shopping. While not specific to equipment financing, bear in mind that many user reviews expressed frustration with U.S. Bank’s approach to customer complaints.

If you’re looking for alternatives, check out our other equipment financing reviews.

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