“Used Equipment Refinancing For Canadian And U.S. Based Businesses”
Used equipment refinancing is typically accomplished through a sale and lease back program provided by one of the equipment leasing companies we work with in Canada and the U.S.
A sale and lease back process is used to provide greater security to the lender compared to a scenario where a borrower retained the title of the assets.
The process is completed when an equipment leasing company that has approved financing purchases the assets pledged for security from the borrower or lessee.
In return, the lessee retains their exclusive rights to use the equipment and is required to repay the purchase price over a lease term that is agreed to by both parties.
Used Equipment Refinancing Can Vary Considerably By Business Circumstances
The amount of equipment refinancing you can secure and the rates and terms related to the transaction are going to depend on the financial health of the business as well as the type of assets being considered for the sale and lease back process.
For instance, a business requiring additional capital for growth is going to receive higher asset leverage, lower rates, and better terms as compared to a business that is in financial distress and is looking for equipment refinancing is keep the operation going for the near term.
For longer life assets where financing has been paid off after five or six years, it can make a great deal of sense to refinance the asset to make greater use of the equity they hold.
Sometimes this is not easy to do, especially when you have a general security agreement in place with a senior lender that takes first position over all assets once their initial loans or leases are paid off.
There are different strategies available to make equipment refinancing work for most situations.
The key is to work with an equipment leasing specialist who can properly guide you through an equipment refinancing process suitable for your business and business requirements.
If you have an equipment refinancing need, or would like to know more about your options, I suggest that you give us a call and get a free assessment of what’s available to you.
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