For many businesses, refinancing is an under-utilized tool in the financial tool belt. Most businesses go through states of ups and downs through their history, but today in these unprecedented times, with increasingly volatile interest rates, refinancing can be more useful than ever. By tapping into your equipment equity, refinancing can help you fund growth and protect yourself through transition periods.
At Ritchie Bros. Financial Services , we understand the value of equipment – particularly used equipment – better than any bank, and we help business owners tap into their equipment equity every day.
Simply put, if your equipment is worth more than the value of the debt outstanding then you have equity in it, and that equity can be used to your business’s benefit.
When can refinancing benefit you:
- Reducing current payments – If your current loan or lease payments are eating up too much of your cash flow and you have equity in your equipment, you can refinance the existing debt over a new, longer financing period to lower your payments.
- Obtaining cash back – If your equipment has enough equity in it, you can use it like a savings account to pull cash from for funding new equipment purchases, paying off existing debts, funding business growth, or providing short term working capital needs.
- Consolidating debts – If you have multiple loans, leases, and lines of credit with multiple lenders it can make sense to consolidate those into one payment facility which can streamline your accounts payable.
- Lower existing rates – If you have higher cost financing it may make sense to refinance it at a lower rate to save on the interest costs. Expectations are that interest rates will continue rise in 2022.
- Exiting an existing lender – Many banks and lenders are keen to lend when times are good, but make it difficult for businesses to operate when they need help. If there’s equity in your equipment you can use this to payout existing lenders and transition to a new primary lending relationship.
- Purchasing or selling your business – If you’re looking to sell your business to someone or acquire an existing business, equipment refinancing can be used as means to facilitate the sale. The equity in the equipment/assets can be used to pay the seller for the sale of the business while the new buyer receives a loan/lease backed by the company’s assets.
What makes Ritchie Bros. Financial Services different? We combine the best of all worlds when it comes to equipment refinancing: a best-in-class asset appraisal process, access to multiple major national equipment lenders, and a team of dedicated equipment financing professionals who can tailor the financing based on your specific businesses needs.
I’m to looking reduce dept and consolidate my equipment costs.