Maximize Your Truck Fleet’s Access to Working Capital with Equipment Refinancing

Maximize Your Truck Fleet’s Access to Working Capital with Equipment Refinancing

Ken Judd

Fact-checked by: Bruce Sayer

Maximizing access to working capital is one of the best defense strategies against the growing financial pressures of a struggling economy. Your truck fleet has highly valued equipment assets. Use them to secure financing with a flexible equipment refinancing solution built to maximize access to working capital.

A growing trend

The sourcing of capital through equipment refinancing is a growing trend. An increasing number of medium and large truck fleets in all stages of business development are choosing equipment refinancing as a financial tool to gain a large influx of cash to stabilize their financials. This form of asset-based lending offers numerous advantages:

  • Fast access to large cash reserves
  • Qualification is easier than traditional lending
  • Flexible terms and repayment schedules
  • Your working equipment becomes your collateral security
  • Few loan covenants
  • No regular borrowing base monitoring

How will equipment refinancing benefit your truck fleet?

The trucking industry is struggling with declining freight demand, low rates, and is hampered by increasing costs. A leading reason companies fail is a lack of sufficient funds to operate the business over an extended period. Many industry experts anticipate a great purge in trucking over the next year.

The ability to access sufficient working capital when it’s needed is a common challenge to most trucking companies – and it’s about to get much more difficult as banks begin a renewed push to tighten credit. High operational costs, increased interest rates on credit, and low freight rates often turn a positive cash position into negative cash flow and depleted operating funds. Little profit is available to contribute toward capital reserves. Quarterly and yearly tax obligations draw heavily on whatever reserves the company does manage to accumulate.

Truck fleets that utilize effective financial strategies to maximize access to working capital gain a competitive advantage. As other carriers battle to ward off bankruptcy, many will commit service failures with shippers and brokers. Trucking companies with the financial strength to maintain unencumbered operations have the agility to respond quickly to these opportunities allowing them to pick up new freight and new customers.

Who uses equipment refinancing?

A person who sees the glass as half empty will regard trailers as depreciating assets. Those who are more open to opportunities and see the glass as half full will recognize the hidden value in their fleet trailers. Medium and large fleets can leverage equity value to buy out existing loans and consolidate debt or use the funds in whatever means to improve the company’s financial structure.

Truck fleets with equity tied up in trailers can leverage the benefits of equipment refinancing to:

  • Invest in turnaround strategies
  • Restructure debt to better align with current and future requirements
  • Achieve greater liquidity
  • Counter significant reduction in cash flow
  • Augment their existing fleet with newer equipment

How does equipment refinancing work?

Refinancing is very simple if you work with a flexible lender specializing in transportation financing. The lender reviews the equipment, assesses its financial worth, and proposes a loan solution of up to 75% of the appraised value.

Example Case: 

Refinancing of twenty-one dry vans and eight reefer trailers:

  • 2016 Wabash Dry Van, 53 ft.
    • Qty 6 @ appraised value of $34,990 per ……………  $209,940
  • 2019 Vanguard Dry Van, 53 ft.
    • Qty 12 @ appraised value of $45,760 per …………… $549,120
  • 2020 Hyundai Dry Van, 53 ft.
    • Qty 3 @ appraised value of $54,950 per ……………  $164,850
  • 2015 Great Dane Reefer, 53 ft.
    • Qty 4 @ appraised value of $39,850 per ……………  $159,400
  • 2017 Vanguard Reefer, 53 ft.
    • Qty 4 @ appraised value of $73,695 per       ……………      $294,780

Total Appraised Value = $1,378,090.00

Available funds:   $1,378,090.00 x 75% = $1,033,567.50

The equipment’s financial value is expressed by its net orderly liquidation value (NOLV). Your equipment’s NOLV is established by a written appraisal conducted by an industry-recognized third-party appraiser. It is based on the estimated value your business would receive after sales expenses are considered if the trailers were liquidated in an organized manner.

Based on the above example case, a lender offering 75% of the appraised value of the equipment will provide up to $1,033,567.50 as a term loan. The loan’s terms and interest rates are defined in a proposed term sheet.

To accept the loan, the trucking company signs a loan agreement and grants security interest on the equipment to the lender. The loan is then processed, and funds are deployed.

Find the right partner

Equipment refinancing is an effective funding option used by trucking companies to help overcome financial distress, consolidate debt, and stabilize operations. Leveraging the equity tied up in your assets provides a significant influx of cash which can be reinvested in your business to build greater resilience to economic pressures.

However, once you decide to investigate further, finding the right partner can be equally critical in resolving your financial challenges. It can be extremely difficult for trucking companies to utilize used equipment to secure against financing unless they are working with proven transportation financing specialists such as eCapital. With exceptional industry expertise and focus, these financing specialists have more favorable criteria for accepting your company’s roadworthy trailers as collateral. Flexible lending terms and easy qualification processes are designed for fast approvals and streamlined processes to expedite funding.


You’ve worked hard to build your fleet and the equity in your working equipment. Until you take steps to unlock it, the equity tied up in your trailers is an untapped financial resource. Refinancing equipment can help you restructure debt to better suit current and future needs or overcome immediate financial distress.

Having access to untapped capital reserves in a down market and as banks begin to tighten credit is a competitive advantage. Working with a flexible lender specializing in transportation financing to refinance working equipment is an effective strategy for accessing significant capital. Use equipment refinancing to meet immediate financial obligations, restructure debt to more favorable terms, or finance a turnaround situation.

Whatever the reason for using equipment refinancing, be sure to work with an experienced and reputable transportation financing company to ensure the best value. Their expertise and industry connections will translate to high appraisal values, better lending terms, and simple processes to complete the deal quickly.

About eCapital Equipment Refinancing

eCapital is much more than a refinancing company. We are a trusted transportation financing company helping trucking companies reach their goals and build success. Our mission is to make the lives of truck company owners easier with flexible financing options such as freight factoringlines of credit, equipment refinancing, and more to place control of your company finances in your hands.

We support everything from start-up companies that need flexible financing to long-standing businesses that may have recently faced financial challenges. Our team of transportation finance experts can get you the funding you need with flexible funding solutions to achieve your business goals.

For more information about how our industry-specific financing solutions support trucking businesses through all stages of development, visit

Ken is the Chief Executive Officer of eCapital Freight Factoring. In this capacity, he leads the transformation of eCapital’s overall corporate strategies into operating goals and strategies for the organization’s freight factoring interests across North America. He has exceptional experience within the transportation industry and leverages this knowledge to guide working capital solutions that align with the unique demands of the transportation sector.

Ken has over 40 years of hands-on experience, both on the fleet operations side as well as leadership on the service side. Ken led the evolution of the division into a top freight factoring provider in the transportation sector, and over a short period of time, transformed the organization into a well-positioned fighter brand in the $900 billion US market.

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