Understanding the financial programs available to you
For the past decade, interest rates have been at historical lows, however with increasing interest rates and inflation, new equipment prices might come as a shock. The use of the proper financial programs can help offset these rising rates. You do not want to hit rock bottom and not have cash flow, so knowing what financial programs are available to you will help keep you up and crushing it.
Other options to purchasing equipment
Before we get into the financial programs, your first step should be determining if buying is the option for you. Questions can start with:
What is my company’s existing finances?
What would be the length and frequency of use?
What are short-term and long-term costs associated with this equipment?
If you are still uncertain if buying is the right option for you, then check out our previous blog: Maximizing profit by choosing between renting and owning equipment. If you are certain, then the next question to ask is…
What financial programs are there?
Stated option lease
This allows a contractor to finance equipment without a large up-front payment. Customers retain cash flow while using the equipment and at the end of the stated option lease, customers can purchase the equipment for a guaranteed amount—thus eliminating the risk of making an unknown “fair market value” purchase.
Fair market value lease or off-balance sheet lease
Similar to the stated option lease in that there can be a lump sum due on the equipment at the end of the lease. The amount due is based on the fair market value of the equipment at the end of the lease period, as appraised by the financial institution.
Accelerated payment program
The quickest way for a contractor to build equity. Such a program increases the value of a trade allowance in the event of an early trade-in and is ideal for contractors who do not have a huge net worth. This option has the lowest gross repayment, and the customer will actually be paying less in interest costs.
Skip payment program
Designed to match the customer’s sales period. It is often the ideal choice for companies that have equity and are able to make higher payments during the months of the year that they are producing. This option is particularly appropriate for contractors doing business in colder climates, where weather can shut down production.
Conditional sale contract
This is the most common financial program. Typically, we can finance 100% of the sales price with no money down. Then, equal payments are spread throughout several years. However, an initial down payment could be required depending on credit. With a conditional sale contract, a contractor usually establishes equity up front by making a significant down payment with no money due at the end of the contract.
Looking to finance more than just your crusher?
With dozens of banks at our disposal, we have a place to take just about everything. For more information, reach out to our finance team.
Knowing your resources
We’re here to do more than help you finance your crusher—with Team Eagle, you get complete support—from research and development, sales and service, financing, and the best aftermarket support in the industry.