Many of our customers inquire about financing our systems. Our competitors offer financing thru several third-party companies. We have a great deal of experience in working with these companies that provide this type of financing and here is what you should know.
IT IS DIFFICULT TO GET APPROVED.
Our customers have submitted hundreds if not thousands of applications thru third-party lenders, only a small fraction of them have been able to get approved. Why is this? These lenders who finance these types of systems consider equipment lending high risk. If a customer defaults on their obligation, the lender will have to deal with repossessing the unit. In the automotive world, repossessions are not a big deal, they are easy to find, recover and resell. Not so with a custom built trailer set up. It can take them a long time to resell and its going to be at a substantial loss. You will also need tip top credit to be approved and even then it’s difficult. Some lenders advertise that they work with credit scores as low as 650, but plan on paying a much higher interest rate and down payment if your score is in this range. If your score is below 650, don’t bother applying. No one we have ever sent to a lender with a score below 650 has been approved.
IT IS VERY EXPENSIVE
These lenders are very crafty at hiding the cost of the financing. They will dangle incentives that sound good, like no money down or low payments, but if you look at the fine print, the unit will end up costing you double, or more, of the purchase price of the unit. This might look good to someone who doesn’t have the capital to purchase the unit outright, but imagine being locked into a payment for several years for your system, and the business doesn’t go as planned and you have to give up the unit, or worse, it gets repo’d – there goes your credit for 7 years.
IT TAKES A LONG TIME TO BE APPROVED
The lenders don’t like to tell you this, but the financing process takes eons! – One deal we had took 6 months for the customer to finally get approved. Let it be known, all these “lenders” are just brokers that work with banks that provide the financing. So keep in mind, you are paying a broker fee too but that’s hidden in the financing.
“I STILL NEED FINANCING – WHAT DO I DO”
So there is the tough love about financing. If you still need to finance the unit, there are other options and here is our advice.
- Try your bank. Surprisingly, many consumer banks will lend on these types of systems. All of our trailers have VIN numbers, the banks like this because they can use the VIN number as collateral to secure the loan. They often have very reasonable rates and they already have a relationship with you. If you need financing, try your bank first.
- Credit card. Just like the banks, many credit card companies have equipment lending programs. They will give you a high balance card with a reasonable rate. Many of our customers have bought equipment this way and the great thing is you can use it for our custom skid mounts as well (banks wont lend on skid mounts – no VIN)
- Property Loan. Another option is to take out a home equity loan. Depending on your lender this can be a very viable option with a great rate and flexible repayment terms. Check with your lender.
We hope this helps you if you are considering financing. You still have the option to work with one of our competitors that works with third-party lenders, but we cannot work with those companies anymore and maintain a clear conscience. If you do decide to go that route, you now know what to look out for and make sure to read ALL the fine print on the loan.