Equipment Sale Lease Backs
One of the quickest methods for a company to raise working capital or retire debt is by completing an equipment sale leaseback financing on the equipment and machinery the business currently owns.
Sale leaseback financing has three main components.
An equipment sale leaseback provides options to companies seeking to increase liquidity, optimize cash flow, and improve balance sheet presentation. For businesses that need flexibility in structuring financial matters, leveraging the equity in your current assets is a strategic way to procure capital for growth or restructuring.
How Lenders Value Your Equipment?
When applying for financing secured by your equipment, one key factor lenders consider is the valuation - essentially, what your equipment assets are worth.
There are three main approaches lenders use:
1. Fair Market Value - This estimates what price the equipment could fetch on the open market under normal conditions. It assumes a willing buyer and seller with no pressure. This is the highest potential value.
2. Orderly Liquidation Value - This projects what the equipment could sell for in a "going out of business" scenario over 90-180 days. There is some time pressure on the sale.
3. Forced Liquidation Value - This is the lowest value, based on an urgent liquidation in 30 days or less, like a bankruptcy auction. The compressed timeline severely limits potential buyers.
Our asset based lending partners are experts at everything equipment. With over 90 years of finance experience, they take the time to understand your specific equipment and situation.
Together, we determine the most appropriate valuation method so you can access the maximum eligible financing amount.
One of the quickest methods for a company to raise working capital or retire debt is by completing an equipment sale leaseback financing on the equipment and machinery the business currently owns.
Sale leaseback financing has three main components.
- You sell your equipment to a finance company (The Lessor)
- The Lessor then agrees to lease the equipment back to you (The Lessee)
- You receive an advance amount, which will vary depending on a financial, credit, and collateral review.
An equipment sale leaseback provides options to companies seeking to increase liquidity, optimize cash flow, and improve balance sheet presentation. For businesses that need flexibility in structuring financial matters, leveraging the equity in your current assets is a strategic way to procure capital for growth or restructuring.
- Loan amounts to $10 Million
- Rates start at 9.99%
- Terms to 5 years
- Up to 85% LTV based on auction value
How Lenders Value Your Equipment?
When applying for financing secured by your equipment, one key factor lenders consider is the valuation - essentially, what your equipment assets are worth.
There are three main approaches lenders use:
1. Fair Market Value - This estimates what price the equipment could fetch on the open market under normal conditions. It assumes a willing buyer and seller with no pressure. This is the highest potential value.
2. Orderly Liquidation Value - This projects what the equipment could sell for in a "going out of business" scenario over 90-180 days. There is some time pressure on the sale.
3. Forced Liquidation Value - This is the lowest value, based on an urgent liquidation in 30 days or less, like a bankruptcy auction. The compressed timeline severely limits potential buyers.
Our asset based lending partners are experts at everything equipment. With over 90 years of finance experience, they take the time to understand your specific equipment and situation.
Together, we determine the most appropriate valuation method so you can access the maximum eligible financing amount.
Approvals are based on any equipment that the lender deems viable.
An appraisal will be ordered and LTV's are generally based on the auction value of the equipment that will be pledged as security on the loan
An appraisal will be ordered and LTV's are generally based on the auction value of the equipment that will be pledged as security on the loan
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This is not an offer to lend or extend credit. Credit approval is subject to credit standards, and actual terms (including actual loan amount) may vary by applicant. Advisory Services USA requires certain supporting documentation with each new application and offers no guarantee of funding or loan offers and the terms thereof. All Loan decisions are made by our lending partners and subject to their specific underwriting criteria and approval processes.
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