Lease Financing Manufacturing Equipment
We Provide Lease Financing For Both New And Used Manufacturing Equipment
One thing that holds true for lease financing manufacturing equipment as it does for most types of equipment, is that the more common the asset and the longer its useful life, the easier it likely will be to get financing for it.
When we refer to common, we are taking about commodity type items like forklifts, conveyors, and so on. But the more specialized or customized any type of asset gets, the harder its going to be to lease finance.
Because the security value for a equipment leasing company is going to depend on their ability to liquidate the asset in the open market within a predictable amount of time and a predictable price range in the event of default, or their risk of loss goes up.
This doesn’t mean that more specialized or customized manufacturing assets can’t be lease financed, but it does mean that the overall financial and credit profile of the borrower will likely need to be stronger than for a commodity asset.
But in many cases, manufacturing equipment leasing is not overly difficult to locate because many of the assets within an industry are rather common, even though there are different makes, models, and functional options among units.
This is also why equipment leasing for used manufacturing equipment is also very common and even competitive among leasing companies
Advantages Of Lease Financing Good Used Manufacturing Equipment
While you’re always going to get better equipment financing options for new equipment, especially when you consider the number of manufacturers supplying this equipment that have their own leasing program, used manufacturing equipment is potentially something that can be lease financed over and over again.
And when you have manufacturing equipment in good condition, that has a long useful life, this is a distinct possibility.
Remember that most equipment leasing terms are for 5 to 7 years at the most. So when you pay off an equipment lease for an asset that has a long useful life, and is kept in good condition, there is a good chance you could turn around and lease finance it again, and potentially again in time.
Equity in this type of equipment can be a great source of capital over time, potentially providing higher amounts of debt financing leverage compared to the same assets being offered as bulk security for an operating loan at a bank.
And the stronger the financial and credit profile of the business seeking financing, the better the rates and terms of financing are going to be for used manufacturing equipment as well.
If you need to lease finance some manufacturing equipment you want to acquire, or presently own, please give us a call and we’ll go through you’re options together.
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