Equipment Financing for Custom Trucks – Equipment Leases and its lenders have been in the Transportation Industry for over 15 years and every year since then, we have been faced with new and ever challenging obstacles in the process of funding semis, trailers for over the road as well as oil and gas industries. In 2017, we found ourselves among just a few financial groups able to fund customized trucks and trailers within the Oil and Gas industry due to the declining price of oil in 2014 and 2015. A Customer looking for a partner to help finance not only new trucks and trailers ($525,000.00) but refinance some of his older units ($480,000.00). The issue was that the majority of this Customers revenue was in oil and gas, hauling mobile rigs to various Oil exploration sites.
The primary bank was holding $2 million in capital for this customer already and could not lend to a company in a declining industry with that much exposure. The equipment that needed refinanced (monetized) was over 7 years old. Most banks will not finance trucks that are over 7 years old because the life of a truck after a new 36 months financing would be over the life that particular asset. The older trailers that needed refinancing were customized and deemed to “Specialized” to be financed or sold on the secondary market. (if looking for financing you will just need to show proof of income and your business information.)
This customer was faced with multiple issues and had nowhere to turn financially. Equipment Leases and its partners were able to provide one schedule with a payment strategy to match their cash flow on both new and old equipment. The customer provided three years of financials, two of the last three years did not cash flow and the most recent interim year being 2017 had shown a debt service and cash flow with positive tangible net worth. The company was showing signs that they were turning the corner but just needed a little help to get past these trying times in the Oil and Gas Industry.
Needless to say a new client became a long term client as we were able to make a decision based on the company and their future not just on the present situation and a falling price on a commodity. It was worth the risk for all parties involved.