Asset and Equipment Based Financing Gives You More Options
Business owners that rely on heavy equipment and high tech systems to get the job done have more options for expanding and raising capital than those that don’t and more than likely, they have options that many of them probably never considered. However they can hardly be blamed for dismissing out of hand any suggestion that they try to raise money for expansion, renovation, acquisitions or research given the dreadful condition of the credit markets and the banking industry in the post 2007 recession era.
The financial meltdown that precipitated the calamitous fall in nearly every industry in the U. S economy had deep and lasting effects on many aspects of the business climate, and perhaps none more so than in bank lending and financing. Even those businesses with extremely good credit ratings and payment histories were unable to draw down on existing lines of credit or to open new lines in the aftermath of what many considered the worst financial crisis since the Great Depression. Given these circumstances and conditions in the credit markets, many business owners simply shelved plans for their companies and circled their wagons waiting for the dust to clear.
The residual effect of traditional lenders pulling back from their normal practices of assisting credit-worthy companies was to make the owners of these businesses somewhat gun shy of even approaching the banks for capital, thinking that it was a waste of time and energy to go through the process knowing full well that at the end of the line was a banker holding an empty bag in his hand and an boilerplate excuse ready on his lips.
On the other hand, a offshoot of the decline in bank lending also created an opportunity for other, non-traditional lenders to take up the slack, and while these credit providers have always been a part of the overall financial marketplace, their value to the business owner has increased considerably of late because while the banks said, ‘No’,’ these capital providers said, ‘Let’s see what we can do.’
For businesses that have equipment that still holds some equity such as heavy machinery, industrial processing tools and equipment, or high tech systems, as well as those companies that are willing to put up the value of new equipment purchases as equity against a loan, the option of asset based financing is a good one. And more to the point, it may very well be the only option with the banks pulling so tightly on their purse strings.
There are quite a few asset and heavy equipment financers willing to lend money to credit worthy businesses. They focus very specifically on equipment financing and they are very good at it. They know the value, the equity value of various pieces of equipment because that’s their business. In order to secure a loan from one of these lenders you’ll need to have decent credit and usually they will require a down payment; on a new piece of machinery they may require up to ten percent. The interest rate they charge will vary based on your credit and the interest rates prevailing in the markets at the time that you close on the deal. Another advantage of these lenders over a bank is that in most cases you can get your capital fairly quickly with some deals closing in just a couple of weeks while other, larger projects might take several months.
Taking advantage of the equity that you have in tangible assets like heavy equipment is a great way for business owners to plow through the roadblocks that the banks have erected in the aftermath of the financial crisis, which the U.S. economy is still slogging its way through. And when you break through the roadblock, you’ll find an asset based lending company at the other end, ready to help you grow and invest in your business.
To know more about Asset & Collateral Based Heavy Equipment Financing please browse Asset & Collateral Based Heavy Equipment Financing
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