Equipment Finance Insights

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PATRIOT Act: Overview for Equipment Finance Transactions

September 8th, 2016

Lenders across the country have been required to follow tightened laws for all financial transactions taking place in the United States, since the inception of the PATRIOT Act.

Even basic accounts — such as personal savings or checking — must be set up following federal guidelines. This means that everyone banking or borrowing in the United States has been subjected to the PATRIOT Act.

Advance Acceptance is a division of First Western Bank & Trust, meaning our customers all go through basic screening when applying for equipment finance.

Brief History
The PATRIOT Act was established after December 11, 2001, to help protect United States citizens and improve security on a global scale. Some of the key focuses include: due diligence in banking and lending; deterring money laundering; and verification of identification.

How it Affects Equipment Finance
Although most equipment dealers, distributors or manufacturers may not think of the PATRIOT Act when closing a deal with equipment financing, it is still a required guideline that must be followed by the lender (Advance Acceptance).

Corporate Transactions
Corporate transactions do not require the signer to provide a form of identification — requires a federal EIN (Employer Identification Number) instead.

What the Seller Should Know
The equipment seller should be aware that the customer is applying for equipment financing with a bank-affiliated lender. Advance Acceptance is a division of First Western Bank & Trust of Minot, North Dakota. So, the customer will need to complete the credit application process, before being able to qualify for financing.

What the Customer Should Know
A basic customer identification profile is set up, just like with any other financial transaction. The customer will need to provide a copy of identification (driver’s license), complete and sign a credit application and will be assigned a customer number (account), if the loan is approved.

The customer will have to provide a valid, official form of identification to the lender (Advance Acceptance):

  • A form of identification with a photo of the borrower (driver’s license, state issued ID or passport)
  • The ID must have the customer(s)/borrower(s) name
  • The customer’s date of birth must be included on the photo identification
  • The current street address or residence of the customer/borrower

More information about the PATRIOT Act can be found on the Department of the Treasury website.

Content by Conrad Magalis


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