Private Party Equipment Financing – An Overview

By | March 14, 2019
What is a dollar buyout lease?

I get asked “does Crest Capital offer private party equipment financing?” or similar all the time. The answer to that question is “yes”, which makes our customers happy, because there aren’t too many equipment financing companies who offer private party financing (aka User-to-User financing).

I’m going to devote a few posts to the topic of financing equipment from private party sellers, because for something that seems so simple, it’s actually a very complex and interesting subject.

To start, let’s define what private party equipment financing is:

Essentially, private party equipment financing is our customers buying equipment (usually used / preowned equipment) from a private party seller, and not an established dealer. This private party can be almost anyone who isn’t an official dealer. Another small business selling you their used truck is a private party seller. A local auto repair shop going out of business and liquidating their equipment is a private party seller. Someone offering a used backhoe on Craigslist is a private party seller. And so on.

While financing private party equipment purchases is very popular, it also carries several layers of risk that aren’t readily apparent to buyers. For example, an old lien can really throw a wrench (or worse) into the deal. Or the fact the equipment could be stolen. Or perhaps the seller isn’t completely forthright, and the equipment isn’t what you think it is.

Over a few posts, I’m going to go over some of the extra work involved with private party deals, and also highlight some of the perils of such (there are some real horror stories out there where buyers really took it on the chin). I want to do this because sometimes buyers don’t quite understand the legwork involved, and the lengths we go through to try to help protect all involved (us, our customer, etc.), but ultimately the buyer (not us) is solely responsible and at risk – caveat emptor, buyer beware.

But yes, private party equipment financing is something we consider on a limited case-by-case basis, even though it involves another hoop or three to jump through. Stay tuned.

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