Tag Archives: equipment
Sale and Leaseback Financing
Sale and Leaseback Financing – What is it?
A sale and leaseback financing transaction is where the company sells it free and clear assets and leases it back simultaneously. These transactions can range anywhere from $50,000 to $6,000,000. This article will encompass the following types of industries and discuss its particulars:
Construction equipment,manufacturing equipment, production equipment, yellow iron, dump trucks and trailers, agricultural and farm equipment, and other heavy equipment
Many seasoned lenders have come up with many industries standards to make the available credit pretty much standard. The first area that the lender will consider is the the value of the free and clear asset that is going to be sold and leased back. Each lender’s formula is somewhat similar but they usually value the acquired asset somewhere between 50%-70% of the auction value. This auction value will come from trade publications and other standards in the industry for these particular assets.
Once the auction value of the asset and/or assets is established, the lender will look at the applicant’s credit. Some lenders will consider the credit irrelevant as they focus on the auction value of the asset. Other lenders will obtain the credit and grade them according. These lenders will come up with a score and give the applicants different lending rates depending upon their credit and the asset involved.
The lender will lease these bought assets anywhere from 24-85 months back to the applicant. Additionally, the lender will offer residual buyout clauses anywhere from 25% residual to fair market value of the asset at the end of the lease. This will keep the applicant’s monthly payment as low as possible.
Sale and Leaseback Financing – What is Required? Usually, what is required from the applicant is:
Personal financial statements, a lease application, a summary telling about the deal and its particulars, and a detailed equipment list, identifying the assets to sold and leased back Obviously – bills of sale and title work will have to be performed by the lender.
The proceeds of the these funds can be used for working capital, debt re-structuring, equipment acquisitions, and paying off judgements and other liens.
Sale and Leaseback Financing – Unique Features Some other unique features of the sales and leaseback program is that usually these transactions are:
Non-bankable type transactions, home ownership isn’t required, and poor credit isn’t an issue!
In conclusion, we suggest you shop around for the best deal for yourself and understand all the particulars of the transaction. Hopefully, this article about “Sales and Leaseback” financing assists you with your decision making.
Medical Equipment Finance – An Overview
Whether you own your own practice or thinking to start a new, medical equipment finance becomes necessary. A lot of sophistication came into medical equipment. Updation of the equipments is necessary. Most of the people are not able to keep pace with changing technology and the new innovations that have paved our lives. It becomes difficult to pay cash at the time of payment for the highly rated equipment these days. Finding a finance for your purchase is the need of hour.
The market is flooded with lenders. But before you put your foot in the market for medical equipment finance, Check out the easiest way- Online Resource. The internet is the best place to start with. You can find a dearth of information related on internet. Companies who are into this business, do also provide the information on their websites. They offer you the quotes, you can customize according to your needs and have the easiest deal in the world.
The other option is of the local lenders in your area. Research on them too if you are not satisfied with online business. They give you the best rate as many times they are in need of the business. In case of local lenders , you don’t have to worry about the time it will take for the payment to arrive nor have to speak with someone .
There are several advantages of a financed purchase:-
1.It somehow save the cash flow. The cash flow doesn’t deplete. 2.You can earn a higher-income yield than the interest rate of the loan.
Lets take a look at the disadvantages too
1.A high interest rate. 2.A high Down payment.
There is something else that you can opt for .And this is medical equipment Lease. An alternative to traditional financing. With a lease, the equipment is used by you but it is owned by the leasing company. You can have a open- ended and closed- ended lease. Open- ended is the one where you return the equipment after the lease expires. Closed-ended is the one where you can retain the equipment after the end of the lease. in which case the leasing entity retains the equipment at the end of the lease term.
As a thumb rule, the higher the balance owed at the end of the lease, the lower the monthly payments.
Advantages
1. No down payment is required. 2. Lower interest rate or the residual payment. 3. Obtain more purchasing power from a given amount of available cash.
Disadvantage – More Interest is paid.
Finally, it is you too decide, the current cash availability and projected cash flow can make you finance the acquisition. This could be done with outlaying the lowest possible cash.