Private Party Financing

By | June 8, 2016

Private Party Equipment Leasing and FinancingOne the interesting parts of being an equipment financing company is we get to work with a lot of small and medium sized businesses, across all kinds of industries. And we handle all types of transactions.

Today I want to talk about one in particular, as not a lot of equipment lenders engage in it (but we do). And that’s “private party financing”.

What is private party financing, you ask? In the world of equipment financing, it’s usually the sale of a piece of equipment that isn’t from a manufacturer or distributor.

In other words, it’s a private sale of one piece of equipment, from one company to another. Or to go even further, the seller need not always be an official “company”. My neighbor is a retired heavy equipment operator, and he had his own backhoe. He recently sold it to a heavy equipment company (who financed it through my company). That’s still a private party sale. As you can guess, private party sales usually deal in singular pieces of used equipment.

Now, my company, or any equipment financing company, isn’t a “consumer” lender. But as long as the buyer is a business, we can usually find a way to make it work.

Here are a few instances where financing private party sales comes in handy:

To Free Up Funds / Room, and Help Facilitate a Sale
Company A wants to upgrade their widget maker. They want to buy it from Company B. But, Company A can’t/won’t buy until they SELL their existing widget maker to Company C.

In the above case, any of the three companies can come to us, and we’ll work with the others to make everything happen. There have been many times we’ve helped Company B sell to Company A by providing financing to both Company A and Company C.

To Get a Piece of Used Equipment
Many companies look to save money by buying used equipment. That may mean buying a piece of equipment a company no longer wants, buying at auction/liquidation sale, or even buying a pretty darn good backhoe from my grizzled neighbor. In any case, we’re happy to provide financing.

To Help a Company Move Old Equipment
Some of our customers want to sell older equipment. Whether it’s related to a current transaction or not, as long as the equipment is in good shape, and the buying company has decent credit, we’ll be happy to discuss financing. In fact, that can be part of the trade magazine ad sales pitch – “Used widget maker for sale. Financing available”.

There are more instances I may be leaving out, but I’m guessing an imaginative businessperson reading this can figure out that the gist of my post is “private party financing = ok”. Again, as long as the equipment is in good shape and the buying company’s credit checks out, chances are we can help push the deal through.

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