Equipment Loans and Equipment Financing
Finding the right equipment loans can be a challenging proposition. The SBA offer loans for purchasing and financing equipment, the requirements for these lending arrangements can be stringent and may put them out of reach for many companies. At Loeb Equipment, we work with our clients to provide equipment term loans and other financial arrangements that work for your needs.
What Are Equipment Loans?
Equipment loans fall under the heading of asset-based loans because they use the value of the equipment being purchased as collateral for the lending arrangement. Similar lending terms are used when purchasing a vehicle for personal use. The car or truck is considered to be the property of the user even though you have a machinery loan and are paying off the loan. Equipment term loans work in much the same way. Used equipment loans make it simpler to leverage your existing equipment or acquire the machinery and equipment necessary to continue your business operations in the most practical and effective way.
Used equipment loans and machinery loans may be more difficult to access for some business owners. The perceived lower value of used equipment can make it less desirable as collateral for some lenders. Remember though, that every machine in your plant is a used machine. One key advantage of working with Loeb Equipment is our willingness to work with you to make sure you have access to the asset-based loans you need for both new and used machinery loans in our service area.
What Is Equipment Financing?
Equipment loans are a subset of equipment financing, which also includes equipment leasing, equipment rentals, and other financial arrangements. Equipment leasing is a way to spread out the costs of use for machinery and equipment over a longer period of time without the upfront costs of purchasing. According to the Corporate Finance Institute, an organization that specializes in educational services for businesses, equipment financing generally includes both equipment leasing as well as new and used equipment loans. Loeb offers equipment financing solutions designed to suit your needs.
Who Takes Out Equipment Loans?
According to the U.S. Chamber of Commerce, every business uses some sort of equipment to conduct operations in the United States and globally. With the gross domestic product in 2020 estimated at $21.49 trillion in the United States by the U.S. Bureau of Economic Analysis, this can add up to an extremely large demand for industrial and commercial equipment by U.S. businesses. Whether your company requires a metalworking equipment loan, a pharmaceutical equipment loan, or equipment bridge loans designed to resolve short-term cash-flow issues, Loeb is an expert source for equipment financing in the financial marketplace.
Why Your Company May Need an Equipment Loan
Breakdowns of your existing equipment can occur unexpectedly. In some cases, it may be more cost-effective to acquire new equipment through auctions or liquidations rather than paying for expensive repairs that may not fully resolve the problem. Experts note that purchasing used equipment can often help companies avoid the steep drop in value that occurs after the first purchase of new machinery or equipment. Loeb can help you to obtain used equipment loans that will make acquiring these items easier and more convenient for you and your business enterprises.
Industries Served by Loeb Equipment
At Loeb, we offer machinery loans and equipment term loans for a wide range of industries and business operations. Some of the most popular equipment financing options we offer include the following:
- Cosmetics equipment loan arrangements: Loeb can design used cosmetics equipment loan that suits the needs of our clients and that ensures adequate cash flow for these valued clients.
- Metalworking equipment loan options: Metalworking equipment loan solutions and other asset based loan arrangements can allow companies to generate revenues without an extensive upfront cash investment.
- Pharmaceutical equipment loan arrangements: If your business needs a pharmaceutical equipment loan to acquire new or used machinery from Loeb, we can help with equipment term loans and equipment financing options that will help you achieve more.
- Food equipment loan options: Loeb does not offer restaurant equipment loans. We do offer food equipment loan solutions for food processing plants and other industrial food facilities and have worked with meat production plants to provide machinery term loans for these enterprises.
- Plastics industry equipment loans: We also have deep experience in providing used equipment loans for the plastics industry and can create a customized lending option for your needs.
- Beverage equipment loan solutions: Bottling and canning facilities can often benefit from newer equipment and additional processing power. Loeb can create a beverage equipment loan that works specifically to suit your needs.
- Brewery equipment loan arrangements: Brewery equipment includes fermenters, kettles, bottlers and many other items as must-have equipment for brewing operations. Loeb specializes in providing brewery equipment loan options for companies just starting out and for those well-established in the brewing business.
- Packaging equipment loans: Loeb can design loans for the purchase of labelers, palletizers and other packaging equipment to make it simpler for your business to acquire these key pieces of equipment.
- Processing equipment loans: Mixers, tanks and other processing equipment can be financed through used machinery loans from Loeb.
- Transportation equipment loans: This type of business term loan is usually structured in a similar way to consumer auto financing arrangements. At Loeb, we can create an equipment term loan that will suit your needs and your cash flow arrangements. Our transportation equipment loans are designed with your needs in mind.
- Yellow iron loans: Yellow iron refers to a wide range of earth-moving and construction equipment types that are typically used in contracting applications. Loeb can provide some types of yellow iron loans and construction equipment term loan options. We work with your construction or contracting company to manage the cost of acquiring earth-moving equipment and other construction gear.
Loeb Equipment does not offer loans for restaurant equipment, farming equipment or farm lending arrangements. For most other business term loan requirements, however, we can deliver the right solutions for your needs.
Understanding Equipment Bridge Loans and Term Loans
Equipment bridge loans are short-term loans designed to provide funding in the interim between a purchase and the acquisition of permanent longer-term financing arrangements. These business term loan arrangements are designed specifically as a way to manage cash flow concerns and to allow companies to obtain equipment now while looking for the most favorable terms for their lending needs in the future.
Geographical Coverage for Loans
Loeb Equipment offers auction and liquidation services and new and used equipment loans to clients throughout North America, including Canada, the United States, and Mexico.
What Is the Average Length of Equipment Loans?
Most equipment and machinery term loans are designed to last for two years with a balloon payment at the end. Some loans may be available for up to 72 months and with a four-year amortization of payments.
How Do I Apply for Equipment or Machinery Loans?
At Loeb, we work hard to make it easy to apply for our used equipment loans. Our pre-qualification questionnaire will allow you to provide the information necessary to determine your eligibility for machinery term loans. The process includes:
- A credit application for the company or individual.
- Inspections and appraisals will be conducted before the loan is approved and on an annual basis after the equipment has been purchased and financed.
- A term note, assets agreement and security agreement must be signed by the borrower.
- A lien check to see if any liens exist on the property, these financial liabilities must be resolved before financing.
- Funding for machinery term loans can then be disbursed to the borrower.
At Loeb, we will work with you at every step of the process to make sure that you receive the most accurate information and the right solutions for your funding and acquisition needs. Our equipment leasing and financing team will be happy to work with you throughout the application process to make sure that you receive the best solutions for your situation and your needs.
Who Can Qualify for Equipment Loans?
In general, anyone who has existing equipment that they can leverage can qualify for the new and used equipment loans available from Loeb Equipment.
Advantages of New and Used Equipment Loans Over Bank Loans
The lending arrangements available from Loeb Equipment offer some real advantages over the loans offered by traditional banks:
- Covenants are terms or promises that are made in a traditional loan agreement that restrict the uses for the property being financed. The equipment financing options offered by Loeb include fewer covenants and restrictions on the ways in which you can use your equipment.
- Loeb Equipment can also offer faster decisions and disbursement of your funds.
- We offer more flexible terms to allow you to manage your financial situation more effectively.
- Loeb requires less paperwork and documentation than most traditional banks, which can make the process more convenient for you and your company.
Why Choose Loeb?
Loeb has 26 years of experience in providing new and used equipment loans for our customers. We have the knowledge and the expertise necessary to close your loan quickly and to provide you with lower rates than most of our competitors. This ensures that you will receive the best and most practical solutions for your equipment acquisition needs.
Benefits of Equipment Loans
Some of the most important advantages of choosing Loeb for your machinery loans are listed below:
- We can offer lower rates than many of our direct competitors. Our interest rates can range between 8 and 12 percent, while most other direct equipment lenders charge 13 percent or more.
- Loeb holds the paper on your equipment, which allows us to exercise greater flexibility in managing your loan and helping you to manage your company’s finances more effectively. We have established bank lines and partnerships to ensure the best outcomes for our clients.
- Our company has been in business for more than a century. This depth of experience shows in every transaction and loan we write.
Drawbacks of Equipment Loans
One of the very few disadvantages of equipment loans is the higher interest rate typically charged for these financing arrangements. These two-year renewable loan options offer superior flexibility and no covenant restrictions in return for somewhat higher interest charges. These loans are to offer you a bridge to a healthier financial position so that you may meet the criteria of an FDIC-insured bank.
Equipment Loans and Tax Advantages
The Internal Revenue Service allows for depreciation on equipment purchased as a way to mitigate your tax liability. Section 179 offers added information on how you can take advantage of this tax benefit for items purchased with our term equipment and machinery loans.
Other Services From Loeb Equipment
At Loeb, we also offer a range of asset management services that can help you optimize your cash flow and can promote the best financial health for your company. We offer creative financing options and bankruptcy loans for clients who need these options for their ongoing operations.
Debtor-in-possession arrangements, also known as DIP financing, are specialty bankruptcy loans that provide financial support for businesses facing Chapter 11 bankruptcy proceedings. According to U.S. Courts, a government website, a debtor in possession is allowed to retain control over their machinery and equipment to generate revenues during their proceedings. Some forms of DIP financing go beyond providing funding and can affect the restructuring of the company currently in bankruptcy.
Loeb Equipment is a trusted source for equipment auctions, liquidations, and financial sources in the industrial and commercial marketplaces. We work with buyers and sellers to create synergy for both sides of the purchasing process. Give us a call today at 1-800-560-LOEB or visit us online to touch base with us. We look forward to the chance to work with you.