Ironically, as the economy improves and contractors experience an upward spike in work, they can get caught in a pinch. Increased payroll, an expanded rental fleet, larger material purchases, etc. can put an initial strain on a business’ cash flow as receivables increase. Fortunately, there is an answer for such situations: an equipment equity loan.
Operating heavy equipment that has been well maintained can offer a contractor or Owner/Operator means to raise working capital quickly. While some small businesses may have an option at their local bank, the standard underwriting process there can often be tedious and time consuming, at times leading to the dreaded “slow no”.
An equipment equity loan is underwritten primarily on the current value of the equipment itself. The process involves a credit application and information on the equipment being refinanced. Answers on approval, terms, and amount can sometimes be provided the same day. Processing and closing is done in 72 hours or less. For companies interested in speed and convenience these loans offer a ready made solution.
If there is money owed on the equipment, depending on age and balance owed, sometimes a refinance can provide both cash out of the unit AND a lower monthly payment. This is accomplished by extending the term out further than the current loan.
If a business is experiencing cash flow trouble due to rapid expansion or a temporary slow down, an equipment equity loan can provide the necessary working capital to propel the business forward.