The used tire changer and wheel balancer look like a good fit for the shop. They are well maintained, the price seems fair, and the retiring owner wants to sell now. But before committing, the buyer pauses: can a financing source approve used equipment, or does it only finance new machines?
Used equipment can be financed. The right opportunity still needs a careful review, and the equipment’s age, condition, and seller can affect the process. Knowing what information to gather can help you assess your options before the machine is gone.
Used equipment financing depends on the machine and the deal
Financing sources consider used equipment regularly. They look at the equipment type, age, condition, purchase price, and how readily its value and identity can be verified. Those details can affect eligibility and the available term.
There is no single age cutoff that applies to every financing source or equipment type. Equipment age, condition, type, and financing source all influence eligibility and the terms available, and older equipment can also be considered depending on its condition and the rest of the request.
The seller and purchase method matter, too. A traditional dealer or vendor can usually provide a quote and equipment details for review. Some financing sources accommodate auction purchases, while others do not. Private-party and auction transactions can involve additional questions, so it is worth checking before making a nonrefundable commitment.
What a financing source will want to know
Expect to provide a description of the equipment, its age and condition, the purchase price, and the seller’s contact information. A quote for used equipment is much like the quote you would gather for a new purchase. The more clearly it identifies the machine and seller, the easier it is to understand what is being considered.
For straightforward requests from traditional dealers and vendors, review can often be completed within one business day, sometimes the same day for qualified borrowers. Auction and private-party purchases can take more review.
You can begin a preapproval before choosing a specific machine. Once you identify the equipment, however, the equipment, seller, and final transaction remain subject to the financing source’s review. Simplified Capital is an independent commercial finance company; financing sources make underwriting and approval decisions.
What documents might be required?
Owners are sometimes surprised by how little documentation a straightforward request requires. Application-only programs generally do not require business financial statements or tax returns, although documentation requirements vary by financing source and applicant.
Application-only equipment financing may be available up to $500,000 for qualifying borrowers and approved equipment, with higher limits possible for particularly strong applicants.
At Simplified Capital, we normally request a completed credit application, the most recent three months of business bank statements, and an equipment quote showing the equipment, purchase price, and vendor contact. Although some financing sources do not initially require bank statements, we collect them proactively because they help evaluate business cash flow and are frequently requested later in underwriting.
Equipment Financing may fit when you want to finance the machine while preserving cash for other shop needs. New and used equipment are both considered, and financing options are available in all 50 states. Owners who have been turned away by a bank often find it worthwhile to explore alternatives. You can explore our Equipment Financing options.
Will I need a down payment?
Most equipment transactions Simplified Capital arranges do not require a traditional down payment, subject to qualification and program requirements. When a down payment is required, it may reflect higher-risk credit or transaction circumstances, or the buyer’s choice to reduce the amount financed. Used heavy equipment sold through a dealer is one situation where a down payment may come up; this article’s tire service machines are not that category, but it is worth knowing where the distinction tends to appear.
A down payment is different from an advance payment or a fee that may apply under an agreement. An advance payment is a scheduled financing payment collected at or near the beginning of the agreement, not a separate contribution toward the equipment’s purchase price.
If a dealer requires a legitimate down payment, Working Capital may be considered as a source of liquidity, subject to qualification. It is worth comparing the cost and repayment obligations of any additional financing with the cash flow you expect the equipment to support. You can explore our Working Capital options.
Make the purchase details work for you
Inspect the machine before committing, and describe its condition accurately. A clear, honest description helps the financing source review what it is being asked to finance. Ask about service history, known issues, and what is included in the sale.
Also account for soft costs when you calculate the full purchase cost. Soft costs typically include expenses such as freight, delivery, concrete work, electrical installation, and equipment installation: costs that do not independently represent equipment collateral. A typical guideline is approximately 20% of the equipment cost, and some financing sources accommodate up to 25%. For strong corporations undertaking larger equipment investments, particularly transactions exceeding $500,000, financing sources may accommodate higher soft-cost amounts. Confirm with the financing source which costs can be included before finalizing your budget.
The right used machine can help a shop serve customers without tying up all its available cash. Before you agree to buy, gather the equipment quote and seller details, and ask what the review will require. That gives you a clearer picture of the transaction while you still have time to make an informed decision.
If the right machine is available now, call Simplified Capital before it goes to someone else. Call (866) 810-1305, email info@simplifiedcapital.com, or use the contact form.
Simplified Capital has provided commercial financing solutions to businesses nationwide since 2002 and maintains an A+ rating with the Better Business Bureau.