How Equipment Refinancing Can Turn Your Truck Fleet Around When It's Upside-down
Your truck fleet’s financial condition is upside-down or heading that way – what should you do?
You’re making all the right moves a truck company owner should make, yet your company is cash flow negative, and your line of credit is maxed out. This story is becoming all too familiar as we face yet another year of challenges. If you’re in a similar position as many fleets in the industry – it may not be you but rather the continuing stream of unprecedented events beginning in 2019. The current economic condition is just another milestone in a string of historic record-breaking events that has drained transportation financial stability. 2023 is projected to be another tough year at best – a recession is possible, some think inevitable. Establishing immediate financial stability is critical to your trucking company’s continuing survival!
So, what should you do if your company is underwater? You should take immediate action to right the ship!
Learn how to turn your truck fleet’s financial condition around with equipment refinancing designed specifically for the transportation industry.
What is equipment refinancing for trucking?
Equipment refinancing for trucking companies is a specialized form of asset-based lending for the transportation industry. It provides the means to capitalize on the rolling equipment your fleet hauls every day to arrange a substantial injection of capital.
Working trailers of all types in roadworthy condition have value. If you own a trailer outright, you own 100% of its liquid value. If the trailer is collateral for an existing equipment loan, you own the market value minus the loan’s outstanding balance. Either way, you have available cash tied up in that equipment. Equipment refinancing is a financial tool used to quickly monetize the equity tied up in trailers.
As a leader in alternative transportation financing, eCapital is forging new ways to deliver more capital in more ways to more trucking companies. Few other lenders can match the varied selection of innovative funding solutions to help improve the financial strength and liquidity of trucking companies. A lender that accepts used trailers as collateral to maximize access to working capital is a game changer for many asset-based trucking fleets.
How does equipment refinancing work?
Equipment refinancing for trucking is a term loan designed to inject significant cash into your business to maximize working capital. Easy qualification processes are designed for fast approvals, and flexible lending terms are tailored to meet the company’s ability to pay.
Here’s how eCapital’s equipment refinancing works:
- Loan applications are received, reviewed, and qualified within days.
- The trucking company provides proof of ownership, insurance certificates, and confirmation as to whether the equipment is free and clear or assigned as collateral to an existing loan.
- A term sheet outlining the estimated equipment value, rate of advance, interest rate, payment schedule, and the loan terms are presented. This term sheet provides the runway needed to arrange a successful exit from an existing lender.
- Once the term sheet is accepted the underwriting process moves into high gear. A qualified third-party appraiser conducts a site visit to assess the condition of the equipment collateral. Following due diligence, the equipment’s appraised value is reported and the advance rate of up to 75% is confirmed.
- At this point, the borrower signs the loan agreement and provides the original to the lender. The lender is then given asset assignments and the original title certificates or access to the official electronic certificate depending on the State in which the equipment is owned. Funds are transferred to the trucking company’s account once the lender receives the original signed loan agreement and processes the loan.
Is equipment refinancing right for your trucking company?
Any trucking fleet with equity in trailers and an immediate need for cash would be wise to consider equipment refinancing. If your trucking company is upside-down or heading that way, equipment refinancing is the ideal working capital financing solution to contribute significant funds to right the ship.
Fleets in financial distress commonly use equipment refinancing to:
- Pay outstanding financial obligations to avoid insolvency or declaring bankruptcy.
- Fund a turnaround strategy.
- Support organizational transition.
- Consolidate debt into one monthly payment.
The following is a summary of equipment refinancing’s powerful features and benefits:
Flexible terms and conditions designed for fast funding:
A significant injection of cash to quickly improve access to capital:
Medium and large fleets use the benefits of refinancing to help restructure financing. By leveraging the equity tied up in trailers, fleets can access more working capital than conventional lenders can provide. With a large influx of cash, trucking fleets can stabilize capital management, improve operational agility, and regain a path to profitability.
If your trucking company needs a significant injection of capital to meet monetary obligations, equipment refinancing of trailers offers the financial relief needed to maintain sustainability.
You’ve worked hard, invested in your company, and now own equity in your working equipment. Whether you need financial relief to avoid insolvency or want more capital to support sustainability and growth, now is the right time to leverage the value hidden in your trailers.
Few lenders have the capacity to offer equipment refinancing to truck company owners. Fewer still have the means to extract the maximum value tied up in used trailers. Leading alternative lenders specializing in transportation financing possess exceptional industry expertise, focus, and resources. When looking for fast, flexible financing solutions to overcome a financial crisis or to maximize your trucking company’s working capital, look for these financing specialists.
Quick tip: Start your search for immediate financial relief by contacting an experienced and reputable freight factoring company. eCapital’s financing specialists provide more favorable criteria for accepting your company’s used trailers as collateral. No other lender can match the fast, flexible working capital solutions they provide to deliver more money faster and more conveniently.
Since 2006, eCapital has been on a mission to change the way small to medium sized businesses access the funding they need to reach their goals. We know that to survive and thrive, businesses need financial flexibility to quickly respond to challenges and take advantage of opportunities, all in real time. Companies today need innovation guided by experience to unlock the potential of their assets to give better, faster access to the capital they require.
We’ve answered the call and have built a team of over 600 experts in asset evaluation, batch processing, customer support and fintech solutions. Together, we have created a funding model that features rapid approvals and processing, 24/7 access to funds and the freedom to use the money wherever and whenever it’s needed. This is the future of business funding, and it’s available today, at eCapital.