Tag Archives: financing
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.
Familiar Errors Motorcycle Consumers Often Make When Shopping To Get A Motorcycle Loan (Page 1 of 2)
Regardless if motorcycle loan rates are increasing or decreasing or its the closing of the model year with tons of dealership promotions, many motorcycle consumers tend to make the same common mistakes when shopping to get a motorcycle loan. Normally there are four common mistakes motorcycle consumers often make with motorcycle loans.
1. Looking for a motorcycle before considering looking for a motorcycle loan.
A lot of motorcycle consumers frequently enter the showroom looking for a motorcycle before considering how much money a motorcycle lender is willing to loan to them for the purchase of a motorcycle. There is not a lot of need to look for a twenty thousand dollar Harley motorcycle, whenever a lender is only willing to allow a loan amount of less than the motorcycle costs.
Additionally, once motorcycle consumers enter the showroom slick salespeople many times pressure them into motorcycle financing using much higher loan rates than they could have gotten had they shopped for a motorcycle loan at a bank, credit union or on the net. Salespeople don’t like motorcycle riders to leave the dealer to shop for a motorcycle loan. In the salesperson’s view this simply increases the possibility of loosing a sale and commission. Thus, salespeople more often than not attempt for a quick sale which normally results in pushing motorcycle buyers to get motorcycle financing at the dealership.
The bottom-line is that it is always best to shop for a motorcycle lender before entering the dealership showroom.
2. Plunging into the unknown motorcycle loan.
Motorcycle buyers many times get motorcycle financing that they don’t wholly understand or may not be the right alternative for them. These days motorcycle OEMS more often than not focus their promotions around credit card motorcycle financing on their own private-label credit cards. However these consumer financing incentives usually offer a reduced interest rate for a very short term like twelve or 24 months and have a tremendously higher interest rate after the short promotional term. On a private label credit card promotion if motorcycle buyers can not manage to pay off the loan during the short promotion period, then they are generally better with a little higher rate on an installment motorcycle loan for an extended term.
3. Borrowing too much.
The most reoccurring mistake the first time motorcycle buyer makes is normally not getting a clear feel of how much motorcycle they might be able to afford. This is particularly true for young motorcycle purchasers who look to purchase the most advanced sport bikes. What they neglect to understand is that financing a $10,000 – $15,000 motorcycle may hurt them financially resulting in them having little cash to enjoy themselves and the motorcycling lifestyle. They may also have too little cash to pay for insurance, maintenance, registration or new accessories for their motorcycle.
4. Not asking the right questions.