An Equipment Line of Credit from Loeb
What Is an Equipment Line of Credit (ELOC)?
An equipment line of credit or ELOC is an asset-based lending arrangement that can provide added financial resources for companies with equipment that can be used as collateral. Just as you can build up equity in your home and can draw on that equity by taking out a home equity line of credit, your equipment line of credit uses the value of your company’s equipment to collateralize lending arrangements for your company. An ELOC can potentially provide your company with the operating funds necessary to manage ongoing expenses and to manage minor financial emergencies when they arise. What is an equipment line of credit? Simply put, it is an open-ended lending arrangement that provides you with added flexibility in managing your company’s ongoing funding and cash flow requirements.
Most traditional banking institutions may not be willing to underwrite an Equipment Line of Credit because of misconceptions about the value of the equipment and a lack of knowledge about proper valuation for these items. Lending institutions that do offer Equipment Lines of Credit could be less likely to offer fair credit limits for your line of credit because of a lack of understanding about the actual value of the equipment. At Loeb Equipment, we have the expertise and proven knowledge necessary to offer ELOCs to qualified customers on fair terms and at competitive rates. Loeb has been in the equipment business for over 100 years.
How Does an Equipment Line of Credit Work?
Like other line-of-credit arrangements, ELOCs offer a preset amount of credit that can be used and repaid for as long as you maintain your repayment obligations or for a fixed amount of time. Generally, how does an equipment line of credit work? The lender requires that you put up equipment you already own as capital. In return, the lender will provide you with a revolving line of credit that can be borrowed against and repaid. An equipment line of credit allows you to access the equity you have built up in the equipment you use every day in your business. This can allow you to leverage these assets to support your business more effectively.
Because these machinery lines of credit are based on the value of your equipment rather than on your credit score or history, they can be much easier to obtain than traditional bank loans. Loeb Equipment works with you and your company to assist you in accessing the credit you need on a one-time or ongoing basis.
What Is Equipment Financing?
Equipment financing is defined as a method of funding the purchase of business-related equipment or machinery for your company. This can be achieved by taking out a loan, leasing to own the equipment, leasebacks or through ELOCs that allow flexible use of funds based on the equity in your current equipment. At Loeb Equipment, we offer solutions that work for your company and your financial needs.
Our equipment leasebacks are designed to allow you to continue using necessary equipment while still acquiring funds for your operations by selling it to Loeb Equipment. Leasebacks offer some tax benefits for your company. ELOCs, on the other hand, allow you to continue to own your equipment while leveraging the value of your equity to best effect.
Who Takes Out an Equipment Line of Credit?
Loeb Equipment offers an equipment line of credit to companies with at least $1 million in equipment. Most of the companies we serve are in a restructuring phase or are in turnaround. Many of these enterprises are not able to acquire traditional bank financing. Because an equipment line of credit is based on the value of the collateral rather than on the company’s credit rating, however, an ELOC can be a good choice for many companies.
Why Your Company May Need an Equipment Line of Credit
Companies typically choose an equipment line of credit when one or more of the following criteria are applicable:
- The company will require additional funding within six months to a year and a half from the initial disbursement of a loan.
- Ongoing cash flow requirements will make it much more convenient to collateralize equipment and establish a line of credit.
- The company is equipment-rich and cash-poor. Equipment leaseback arrangements can also be useful in these cases.
- Past credit problems may block traditional sources of financing.
- The company is still too new to qualify for most forms of traditional lending arrangements.
Loeb Equipment works with companies just like yours to provide practical options for accessing the cash you need by leveraging your owned equipment.
Industries Served by Loeb Equipment
Loeb Equipment offers equipment lines of credit for a wide range of industries and companies:
- Cosmetics equipment line of credit: Loeb Equipment buys and sells equipment from cosmetics manufacturing companies. We also offer cosmetics equipment line of credit arrangements that can help your company manage its finances more efficiently.
- Metalworking ELOC: Metalworking equipment can be a significant investment for your company. Applying for a metalworking equipment line of credit is a good first step toward accessing the equity in your machinery and leveraging your assets for greater financial flexibility.
- Pharmaceutical equipment line of credit: Loeb Equipment can offer pharmaceutical equipment line of credit arrangements on most types of pharmaceutical manufacturing equipment. These pharma equipment line of credit arrangements are well-suited to the uncertainties inherent in the industry.
- Food equipment line of credit: As a leading food equipment liquidator and auction company, Loeb knows the value of these types of equipment. This will typically allow you to receive the food equipment line of credit you need to manage ongoing costs or one-time needs for emergency funding.
- Plastics equipment line of credit: Loeb works with companies in the plastics industry to host auctions and to purchase equipment outright. This, along with our plastics equipment line of credit options, can help your company to acquire necessary cash more easily.
- Beverage equipment line of credit: With used and refurbished equipment in demand in the beverage industry, Loeb Equipment buys and sells this equipment as well as offering beverage equipment line of credit arrangements for our clients.
- Brewery equipment line of credit: Brewery equipment is often available for sale through Loeb Equipment. Our team can accurately value your equipment to provide you with the best offer for a brewery equipment line of credit.
- Packaging equipment line of credit: Obtaining a packaging equipment line of credit is simple and easy by contacting Loeb Equipment.
- Processing equipment line of credit: We also offer processing equipment line of credit arrangements that can assist you in getting the cash you need from the equity in your equipment.
- Transportation ELOC: Loeb Equipment can also make loans on transportation vehicles used primarily in your core business activities. If you need a transportation equipment line of credit, contact us today.
- Yellow iron equipment line of credit: Yellow iron is a term used to refer to the heavy construction equipment often used in building and agricultural activities. For construction firms, Loeb can offer yellow iron equipment line of credit arrangements that will assist these companies in managing cash flow concerns.
Loeb Equipment does not currently offer loans for farming equipment or restaurant equipment. For most other industries, however, we can provide ELOC options and accurate appraisals to help you get the cash you need.
Limits for Equipment Lines of Credit
Loeb offers an Equipment Line of Credit ranging from $1 million to $20 million.
Geographical Availability for ELOCs From Loeb Equipment
We serve the United States, Mexico and English-speaking areas of Canada.
How Much Does an Equipment Line of Credit Cost?
Interest charges for your ELOC will be about 10% for the used portion of your loan and 5% for the unused line of credit.
What Is the Average Duration of an Equipment Line of Credit?
The equipment lines of credit offered by Loeb Equipment typically are configured as two-year balloon lending arrangements with four-year amortizations and adjustments for depreciation. Most types of equipment depreciate by about 2% per month. After the two-year period is complete, most of our clients refinance the 50% balance that still remains on their loan. This allows for greater flexibility for borrowers who may want to keep their financial options open for their company.
How Do I Apply for an Equipment Line of Credit or Machinery Line of Credit?
At Loeb Equipment, we work with you to make the application process as seamless and streamlined as possible. You can learn more about our loans on our website, where you can also fill out a pre-qualification questionnaire that will allow us to determine whether you are eligible for an equipment line of credit. If you qualify and provide us with the necessary information, we can often approve your loan within three to five weeks. If your equipment has other liens, we may need a little extra time to resolve these before offering you a line of credit on your equipment. We perform annual inspections to make sure your equipment is still in good condition and will provide you with the final documentation when we extend an offer for an equipment line of credit.
Who Can Qualify for an Equipment or Machinery Line of Credit?
If your company owns equipment that is worth $1 million or more, you can leverage that equipment into cash on hand. Loeb Equipment offers equipment and machinery line of credit arrangements for businesses that do not meet banking criteria for traditional lending arrangements.
Why Choose Loeb for an Equipment Line of Credit?
At Loeb Equipment, our lending arrangements offer some real advantages compared with traditional bank loans:
- We offer faster decisions and more frequent approvals for our ELOC arrangements.
- Loeb does not include cumbersome covenants that will restrict your use of your equipment.
- We can provide greater flexibility for your lending terms and your company’s repayment schedule.
- Loeb does not require extensive paperwork for its equipment line of credit arrangements, which can help you manage the application process more easily.
Benefits of an Equipment Line of Credit from Loeb
An ELOC could be the perfect solution for your business financing requirements. Some of the most important benefits of these lending arrangements include the following:
- Loeb has established partnerships and bank lines to provide added stability and security for our customers.
- Because you are not required to take the entire amount of your line of credit at the time you accept the lending arrangement, you can keep a reserve on hand to dip into when you require more funds.
- The unused portion of your line of credit is charged at half the interest rate of the borrowed amount, which can save you a considerable amount on interest.
- The flexible terms offered by Loeb can make it much easier for your company to manage its financial arrangements.
- The absence of restrictive covenants is a major plus for these types of lending arrangements.
Other Services Offered by Loeb Equipment
Loeb Equipment offers a wide range of asset management services that can help you maintain financial stability and viability in the economic marketplace. We offer debtor-in-possession (DIP) financing for companies in Chapter 11 bankruptcy proceedings. We can also provide equipment sales and leaseback arrangements as well as equipment and machinery loans that suit the needs of our clients. Because these lending arrangements are collateralized, your credit will not be a factor in our decision.
At Loeb Equipment, we offer practical support for companies looking to buy, sell, auction or leverage their equipment for increased financial flexibility. We work with buyers, sellers and borrowers to create the most practical and positive results for all parties involved. Call our team today at 1-800-560-LOEB or visit our website to learn more about the services we offer. We are here to help you achieve the highest degree of success in your chosen industry.