| Have you had some trouble obtaining financing for an | | | | even the lowest of credit scores (in the 500's and |
| excavator for your construction or excavation | | | | 400's). Now we're talking about severely damaged |
| business? If so, you are simply not alone. In a response | | | | credit. There is not a bank in the world that will help |
| to America's housing related crisis, there has been a | | | | you now, BUT IF you have secondary collateral you |
| major credit contraction that has trickled down to | | | | may be in luck. |
| every type of financing available-including financing an | | | | When working with this type of severely damaged |
| excavator. | | | | credit you'll need collateral in a 2:1 ration. For example, if |
| There is however, good news. There are ways to get | | | | your new excavator is priced at $35,000.00, you'll need |
| financing for your new or used excavator if you have | | | | additional collateral in the amount of $35,000.00. Other |
| bad credit. | | | | equipment that you may own outright (auction value is |
| First, if you have a Trans Union credit score of 600, | | | | used to determine value), real estate, land, and autos |
| there is a strong likelihood that you'll be able to | | | | valued at $10k or more are examples of commonly |
| purchase AND FINANCE an excavator from bank | | | | accepted secondary collateral. |
| owned or off-lease inventory. Often times financing | | | | Be realistic in your expectations. If your credit is very |
| concessions are made by the bank or lender to enable | | | | damaged and you're a start-up company, don't expect |
| them to quickly get the equipment off their books. | | | | super low bank type rates and payments. Remember, |
| Some of the concessions they'll make includes the | | | | the bank won't approve you for those low rates and |
| following:o Lowering credit score requirements (600 at | | | | payments because you simply don't qualify right now. |
| this point).o No Bankruptcy requirements (except that it | | | | That's OK. You will eventually. |
| be discharged).o No Time In Business | | | | The thing to keep in mind is that you MAY be able get |
| requirements-This is huge right now! Many banks and | | | | the equipment to expand, grow, or start your new |
| leasing companies have either stopped lending to | | | | business. How much will you net or gross by acquiring |
| start-up companies or they make it very hard to | | | | the new equipment? Does it exceed or greatly |
| qualify AND they put relatively low caps on the | | | | exceed the monthly payments for the excavator? |
| amount they'll lend ($25,000 is a common cap for new | | | | What kind of revenue will you pass up without the |
| companies at this point).o Reduced paperwork. Just a | | | | equipment? Think revenue over trying to get the |
| simple application is required AND NO financials.o No | | | | lowest rates. It's not realistic without the whole |
| down payment. You can typically get in with just one | | | | package (2-3 year business history, good personal |
| payment up front. | | | | credit of all owners, good corporate credit, good bank |
| Second, there are still excavator finance options for | | | | statements for the business, good tax returns, etc.). |