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(844) 860-2288
(844) 860-2288
(844) 860-2288
At Creditfy, our goal is to provide the best and low rates for equipment financing regardless if the equipment is used or new. Lenders classify different types of equipment by a risk category, we know each type of equipment and risk associated with underwriting. Based on our internal underwriting guidelines, we compiled a list of different types of equipment that could yield the best and lowest equipment financing rates.
For a business to get the lowest financing rate, the business and applicant must both possess excellent credit score and business credit factors. Besides the credit and other business factors, the equipment must be considered as a preferred type of asset. What is a preferred type of asset? A preferred asset is an asset that has a long-life value. Also, the underlying asset must have a high resale value.
For example, heavy duty equipment has a long-life value and is used for 20-30 years versus other assets that have a lower life of 5-10 years. An asset that has a lot of demand and carries a high resale price tends to have the lower risk for lenders. Besides the credit and business factors, the asset itself is what yields the best equipment financing rates. A new piece of equipment is the one that would also yield the longest terms of up to 7 years.
If the equipment is used, you could still obtain both favorable rate and term. There is a lot of demand for used equipment across all industries. For example, many contractors first consider purchasing a used piece of equipment because its less expensive than new. When a new piece of equipment is being purchased, it loses 20-30% of its value within a year. Non-preferred assets with low life value lose up to 50% of its value within a year of being purchased. If the equipment is used, you may not secure a 7-year term, but some lenders could consider 6 years with close to the same rates as new equipment. This could be extremely beneficial to a business that is concerned about the first-year loss of value.
As a business owner, your main objective is to find the best equipment from a credited vendor or seller. At Creditfy, our main objective is to secure the best equipment financing rate and terms. We understand the pitfalls of purchasing used equipment. We provide guidance to our customers in making sure that the purchase makes sense not only based of value but cost as well.
If you already have an equipment and want to increase its life that would yield a higher resale value than simply take a good care of it. You want to make sure that every month or before large jobs, you schedule regular inspections and provide regular maintenance. Many operators ignore the manufacture’s operation and maintenance manual which could create big problems down the road. It’s imperative, that you know how your equipment properly works and from time to time you refer to the manual. Keep a separate logbook for each asset that you could present to the buyer.
When the buyers review your logbook, they will not only trust you more, but they would be more comfortable to making the purchase. Spend more to protect the weakest areas of the equipment such as items that could tear or break. If you’re not using the equipment, don’t keep it outside during poor weather conditions but store it inside or cover it up. When lenders make their decision, they are also making the decision if you are a responsible operator and the care of equipment use.
When you are financing equipment from reputable manufactures, it provides a lot of weight for the lender when classifying risk. Larger manufactures tend to produce the best quality equipment and have proven themselves over time versus little manufactures not having the same brand recognition. This all falls back if the equipment is preferred or not.
At Creditfy, we seen customers purchase the same piece of equipment, but one would be dirtier than the other and have different terms and rates. The equipment that was power washed and slightly re-painted received a 3% lower rate and an additional 1-year term versus the equipment that looked dirtier. Keep in mind, both had the same year, model, appraisal and hour usage.
We compiled a list of different industries that each have preferred assets that would yield the most competitive rates and terms. If you’re looking to purchase an equipment that is not on this list, we could still provide competitive rates and terms. The list below is a small sample of assets that we are looking for regardless if equipment is used or new, high usage of hours, moderate mileage on trucks or moving vehicles. Apply when you’re ready and review some of our equipment coverages: