Loeb offers all types of equipment loans and equipment financing for our clients. We are a popular source for distressed loans and distressed financing for equipment, which can help your business during difficult financial times.
What Is Distressed Financing?
The Corporate Finance Institute defines distressed debt as the financial and credit securities that are owed by a company that is currently undergoing bankruptcy, is in default on some or all of its loans or is experiencing serious financial problems. Distressed financing has been identified by the Harvard Business School as a way for companies with financial issues to obtain necessary funds or equipment to continue their corporate activities.
If the financial shortfall is a result of cash flow issues, bridge financing can often provide the cash on hand to navigate these issues until expected income is received. For companies that require funding on this basis, bridge loans can provide a useful source of funding until other financial arrangements can be made or until funds are available from invoices and other corporate activities.
Bankruptcy financing is also referred to as debtor-in-possession (DIP) financing. Funds acquired during Chapter 7 or Chapter 11 bankruptcy through DIP financing can be used to maintain company activities while restructuring the company to ensure greater profitability and viability. This can allow companies to continue to produce goods while they work out their financial situation during bankruptcy proceedings.
What Is Distressed Lending for Equipment?
According to Monitor Daily, distressed financing for equipment carries a higher risk for lenders. As a result, higher interest rates or a substantial amount of collateral is usually required for these financial arrangements. As a result, many companies turn to private credit firms and companies that specialize in distressed loans for machinery when they require funding during initial bankruptcy filings. These companies can also provide bankruptcy loans for companies that have persistent issues with cash flow in difficult financial circumstances.
DIP financing is one of the most common types of distressed equipment lending arrangements. In these arrangements, borrowers who are already in bankruptcy can obtain funding by giving the lender a lien or collateralization interest on their equipment. This can allow companies in financial distress to obtain a bankruptcy loan that will allow them to work out their issues during turnaround and recovery. The expectation is that the restructured company will be able to repay its loans and will perform better after it completes its restructuring process.
Loeb offers a variety of distressed lending options for equipment, machinery and other large-scale items of collateral. By taking a distressed loan, you can retain the use of your necessary equipment while navigating Chapter 11 or Chapter 7 bankruptcies. We can help you work out your financial restructuring more successfully and easily.
How Does Distressed Equipment Financing Work?
Chapter 11 is the restructuring of the company and Chapter 7 is closing and selling its assets. The primary difference between Chapter 7 and Chapter 11 proceedings is the requirement to repay creditors over time rather than selling all assets of the company to pay debts. In general, companies currently in active Chapter 7 proceedings cannot take out collateralized loans on their equipment. Companies in Chapter 11 proceedings, however, can create a payment plan that includes a distressed loan that includes bankruptcy financing to collateralize their current assets.
Some of the financial solutions available for companies include equipment lines of credit, equipment term loans and equipment sale-leasebacks. Loeb offers each of these types of distressed loans for our customers. We can help you find the right distressed loan arrangements for your business.
If you are looking for distressed loans for equipment, Loeb is your best option. We offer bankruptcy loan arrangements for companies currently in these proceedings or who are recovering from Chapter 18 back-to-back bankruptcies. Our team can help you with financing distressed equipment to ensure the best outcomes for you and your company.
Who Takes Out Distressed Equipment Loans?
Distressed loans for machinery are available to companies with all types of credit ratings and financial situations. These distressed finance arrangements are designed to allow companies to extract the equity they currently hold in their equipment to meet current or future financial needs.
Why Your Company May Need a Distressed Loan
There are several reasons that a distressed lending arrangement could be beneficial for your company.
- Obtaining financing during turnaround and restructuring: Finding bankruptcy financing can be challenging. Distressed loans can provide the funds needed to help you work out the settlements made during previous bankruptcies and can ensure the highest degree of profitability once your company has been restructured.
- Extracting equity through distressed loans for machinery: Short-term cash flow issues can often be resolved by investigating our distressed lending for machinery options. We offer bankruptcy loan arrangements that work for companies throughout a wide range of distressed equipment lending arrangements.
- Navigating difficult financial situations: Downturns and disruptions in the general economy can create added financial pressures for many companies. Distressed finance arrangements are a solid step toward greater financial stability for many companies. By taking out a distressed loan for equipment already owned by the company, owners and managers can manage their finances much more effectively.
- Achieving tax advantages: Certain distressed loan arrangements can provide real benefits for companies seeking to reduce their tax liabilities or to adjust their assets and liabilities. For example, lease-back transactions can remove equipment from the list of assets held by a particular company. In these cases, it may be beneficial to acquire the cash on hand immediately while reducing the tax impact of large-scale assets on the books.
- Managing cash-flow issues: Some companies may consider distressed equipment lending as a way to obtain necessary cash. This is especially true for companies that may have experienced credit issues or bankruptcies in the past. By seeking a distressed loan for equipment, these companies can often achieve a greater degree of stability in their cash-flow situation.
- Acquiring additional funding: Distressed lending for equipment can provide added funds for expansion or restructuring without the stress and time needed for traditional bank loans.
Industries Served by Loeb
As a leading distressed lender, Loeb can provide workable financing solutions for companies in a wide range of industries. Some of the market sectors we serve with distressed finance arrangements include the following:
- Cosmetics equipment distressed financing: Loeb offers a full line of cosmetics equipment distressed loans that are designed to provide added cash in hand for managing operational costs. These distressed lending arrangements are an ideal solution for companies that expect to work out debts or to achieve greater profits after serious financial difficulties.
- Food equipment distressed lending: Companies in the food production industry can experience downturns and may need to be restructured to achieve adequate profitability. Loeb offers food equipment distressed loans that collateralize existing equipment to help these companies to achieve successful turnaround in challenging economic environments. We are very familiar with food industry loans and food equipment financing. This includes food company loans or lines of credit that can even out the cashflow issues because of your product’s seasonality. Loeb understands that hot dog sales are lower in January and February and the cashflow can be more challenging during those times.
- Pharmaceutical equipment distressed loans: As a preferred provider of distressed lending for machinery, Loeb can make pharmaceutical equipment distressed loans that will provide valuable financial flexibility for restructured companies and those working to pay off bankruptcy financing or Chapter 18 bankruptcy loans.
- Brewery equipment distressed finance: Brewery equipment distressed loans are available from Loeb and offer added help in managing short-term cash shortfalls and in navigating Chapter 7 or Chapter 11 bankruptcy proceedings and restructuring more successfully.
- Beverage equipment distressed financing: The beverage equipment distressed loans available from Loeb are tailored to suit the ongoing needs of your facility and your company’s financial bottom line.
- Metalworking equipment distressed financing: Loeb offers a selection of metalworking equipment distressed loans that include sale lease-backs and DIP arrangements to suit the needs of your company.
- Plastics equipment distressed finance: The plastics industry is remarkably resilient. Even so, companies can experience periods of reduced profitability. Our plastics equipment distressed loans can provide the cash on hand companies need to weather these temporary financial storms.
- Packaging equipment distressed financing: If you need help in financing distressed equipment, Loeb can provide the right packaging equipment distressed loans for your company and your ongoing financial needs.
- Processing equipment distressed financing: Processing equipment distressed loans are available for companies that hold significant or complete equity in these types of equipment. If you are interested in financing distressed equipment for processing industry activities, our team can provide you with the right solutions for your needs.
- Printing equipment distressed lending: Printing equipment distressed loans are a proactive way to access the equity you hold in your printing equipment. Our distressed lending team will help you to determine the best approach for your company.
- Yellow iron distressed finance: According to the Energy Technology and Environmental Business Association, more commonly known as ETEBA, yellow iron is a term used to refer to heavy construction equipment. This includes fork-lift trucks, earth-moving equipment and other common pieces of construction equipment. Loeb offers yellow iron distressed loans that can help companies in turnaround with restructuring their processes without stopping their operations.
- Transportation equipment distressed loans: Transportation distressed loans can provide added help for businesses in financial trouble. By opting for distressed lending for equipment, transportation firms can leverage their equity to promote added financial stability for their ongoing operations.
Loeb offers distressed loan arrangements that will help companies make the most practical use of equity and can assist in dealing with short-term financial issues. We currently do not offer financing for restaurant equipment or for farming machinery.
Ranges of Distressed Loan Sizes
At Loeb, we offer distressed lending arrangements starting at $1 million and topping out at $20 million. We are a trusted and reliable distressed lender with an in-depth knowledge of equipment values and the distressed loan marketplace.
Geographical Availability for Loeb Distressed Loans
Our distressed lending for machinery options are available throughout the United States, Mexico and in the English-speaking areas of Canada.
Duration for Distressed Equipment Loans
As one of the top distressed lenders in the financial marketplace, Loeb can tailor your distressed financing arrangement to your needs. Most of our arrangements for distressed financing for equipment are designed as two-year balloon loans that include four-year adjustments for depreciation and amortizations. Many of our clients refinance the remaining 50 percent of their loan at the end of the two years, which allows for much greater flexibility and added options when financing with Loeb.
How Do I Apply?
As a major distressed lender, we make it easy to apply for distressed financing through our company. Our website offers information on the process and an easy online application that can help you to obtain the distressed lending solution that is precisely right for you.
Click here for our credit application.
Who Can Qualify for Distressed Financing?
Almost any company with at least $1 million in equity can quality for distressed financing arrangements with Loeb. We offer distressed lending options that include equipment lines of credit and lease-backs for our customers.
Why Choose Loeb for Distressed Equipment Loans?
Loeb is a distressed lender with a solid reputation for fair dealing in the financial marketplace. Some of the most important advantages of choosing Loeb for your distressed lending arrangements include the following:
- Distressed loans backed by your equipment, not your credit
- Faster processing and decisions on your distressed loan application
- No restrictive covenants that could impact your use of your equipment
- Easier approvals for our distressed loans
- In-depth knowledge of the real value of your equipment
- Yearly inspections for equipment covered by distressed financing arrangements
- Increased flexibility for distressed loans and terms
- No income or debt-to-equity ratios for our distressed finance arrangements
- Less paperwork for you to fill out before obtaining your distressed financing funds
Advantages of a Loeb Equipment Line of Credit
Some of the specific advantages you will enjoy by choosing a Loeb equipment line of credit include the following:
- We have partnerships with major financial institutions and bank lines to ensure the security of your financial arrangements with us.
- Because Loeb distressed finance arrangements include no restrictive covenants, they can allow you to manage your operations more effectively.
- We offer flexible terms that work for your company’s needs.
Other Services We Offer
Along with our distressed lending arrangements, Loeb is also known for our equipment auctions and equipment liquidations. We work with companies to purchase unneeded equipment and sell equipment to companies in need of good used machinery. Our distressed finance options include DIP financing, sale lease-back arrangements and machinery loans that can provide your company with added flexibility when managing your financial situation.
If you are interested in buying, selling, auctioning or borrowing against the equity in your equipment, Loeb can help with proven solutions that work for your needs. Give us a call today at 1-800-560-LOEB to learn more about the services we offer for buyers, sellers and borrowers. We work with you to ensure the best outcomes for all parties to your transactions.