What a great year to buy new equipment for your business. Granted, many companies and many people are struggling, but there are some great incentives to buy new business equipment in the year (like Section 179 of the Federal tax code- businesses that spend less than $800,000 a year on qualified equipment, can write off up to $250,000 in compared to $125,000 in 2020). If your business is in a good position or simply needs to buy some heavy equipment like an excavator, bulldozer or backhoe, then buying off-lease equipment is the way to go.
There are two separate categories of off-lease equipment these days. The first category of off-lease equipment (repossessed or turned in at the end of the term) applies to equipment that is bank or lender owned and the price is potentially negotiable or just downright excellent. Now, some companies may have a tough time lining up the financing for this type of off-lease equipment (i. e. a newer business, poor credit, weak financials or all of the above) while others will not. If you can pay cash or have no trouble getting the financing lined up for below market off-lease equipment, this is a great way to go and is an excellent time to acquire new equipment.
The second category of off-lease equipment also applies to equipment that was repossessed or turned in at the end of the lease term. Instead of having really low prices, the lender will dramatically lower their lending standards. One might ask, “if the price isn't good, then how does that help me?". The answer is simple, the credit market is tough right now. If you're a new business owner (less than 2-3 years old) and/or don't have good personal credit, then financing may be tough to get or just not possible.
Here's an example. Let's say you have a low credit score of 600, your business is brand new, and you don't have business bank statements yet-Financing may not be possible unless you go to a hard money lender. If you select off-lease equipment from a lender that lowers the bar regarding their credit standards, it may make life very easy for you in terms of buying and financing that new equipment. Right now, if you are having a hard time getting funding to buy new equipment because of a recent bankruptcy, a credit score in the low 600 range, weak financials, or because your business is new, then buying and financing your equipment from a company that eases their funding guidelines (rather than dramatically lowering the equipment price) may be your best bet.
Whether you are the perfect finance candidate or not, buying off-lease equipment is an excellent way to get your hands on the equipment your business needs. Lenders will either unload the equipment at a great price or they'll extend financing to companies that they normally would not extend credit-all simply to get the equipment off their books. After all, they're in the business of extending credit, not being an equipment dealer.
About Vitality Finance Group: Does your business need heavy equipment or specialty truck financing? If so, give us a call. We have off-lease inventory that has eased financing requirements AND if you select the tabs marked Hot Specials, there are excellent deals on repossessed equipment. Contact us or apply online at (877) 834-3247 or http://www.VitalityFinanceGroup.com