What Happens to Repossessed Equipment?

By | May 12, 2014

Equipment Finance RepoA few recent posts have explored what happens when someone doesn’t pay back their equipment financing company. And, at one point, I mentioned repossessing the equipment. And that opens up the door for one last post on the subject – how do we repossess the equipment, and after repossessing it, just what do we do with the equipment once it’s repossessed?

I can tell you what we don’t with it, and that’s resell it ourselves. We’re not in the business of selling equipment to end users; we’re really just interested financing said equipment. So the big annual “equipment financing company repo yard sale” is out (although Mrs. Fletch is bugging me to clean out the garage… anyone want an old mower cheap?)

So ok, we need to repossess a piece of equipment. What then? A key point is speed. In fact, speed is of the essence. Equipment depreciates, and time is not our friend. So we need someone to go in and remove the equipment, haul it away, store it, appraise it, refurbish it (if needs be), and turn it into whatever we can recover from it.

Believe it or not, there are a lot of companies that do this very thing. Most only work with certain equipment types (for example, farm equipment, or technology equipment) and/or limited geographical areas. Others, like the one we work with, are a “single source asset re-marketing provider” (aka, a national liquidator). They take any type of equipment, from anywhere in the US, fix it up, and find it new owners via auction.

This is actually a good thing. I mean, ok, repossessing anything is never fun, but it is a small (yet unavoidable) part of the lending business. And, looking at the bright side, it does fuel an industry you probably didn’t know existed (next time you see an auction of machinery/etc., you’ll know where some of the items came from).

Picture a sad little piece of equipment getting cleaned up and finding a new home. That gives the repossession trilogy a happy ending, doesn’t it?

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