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Lending/Bankers Changes, Commercial Vehicles and Construction Equipment

By JM Luna

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Published: 21Jul2008
Word count: 606
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As the economy has weakened and defaults have occurred at all levels, lenders Have put themselves into a very difficult position how to do business. On one hand, the lender has taken back tremendous amounts of repossessions due to default of payments or non-compliance of terms with the lease. The lessee can't afford to make payments when the revenue base isn't there and the costs of doing business has sky rocketed. The lessee has either walked away from his obligation to pay the lender or the lender has taken back the acquisition. Either way, everybody is a loser and the future looks no brighter.

The lender must recondition these repossessed items and either re-lease them or auction them off at a discount. This isn't a good scenario because the lender is losing time and dollars on every repossession. As this problem has leveraged itself, it has put some lenders into financial crisis. At the present time, some lenders have had to reevaluate their financial models and make dramatic changes. Their normal lending requirements have become more stringent and fewer prospects will now qualify for commercial trucks and construction equipment than one year ago. Many lenders will not lend on new acquisitions unless your personal credit score is above 650, 680 or higher. This has caused a problem on buyer acquisitions but also limited the lenders' growth which might be his survival. Additionally, financially strapped lenders require time in business of at least two, possible three years. This additional requirement has eliminated a big pool of potential buyers of heavy equipment and trucks.

As the lenders normal credit models have changed, this has caused potential buyers to be cautious and/or nervous of lender's intentions. Every week, information is in the news pertaining to a bank/lender and for the most part this information is damaging to the lending industry. In some instances, some lenders have transformed itself overnight into a different type of lender.

For the startup business, this has caused them to be almost locked out the trucking and construction industry entirely unless they have a personal credit score of 700 or higher. Additionally, the risk/reward factor that is presented at this level has required the lender to require a 15-20% down payment to consider a startup transaction.

One of the solutions that is available to the start up or the seasoned business without stellar credit is repos offered by these strapped lenders. These trucks and heavy equipment can be attractive to potential buyers because the front money may be minimal and the lender may be more flexible in its financing and credit requirements. This expanding market should be examined by all potential buyers because unique opportunities can exist for all different levels of the customer wants and needs. Seasoned businesses with stellar credit and time in business could be rewarded handsomely in the price, financing or both. .

This following types of work trucks and construction equipment is described in this article:

Dump trucks, bucket trucks, day cabs, concrete and cement trucks, boom trucks, water and vacuum trucks, articulated trucks, garbage trucks, tow trucks, excavators, bulldozers, forklifts, concrete equipment, concrete pumps, forestry equipment, backhoes, etc

In conclusion, when shopping for financing on commercial trucks and construction equipment, it is important that you acquire as much information pertaining to your lender. Times have changed and your contract that you signed must be carefully read and understood. These lenders that exist today may be completely change its lending model in a year or so and/or possibility Be out of business. Boy, times have changed..

Happy hunting for your acquisition and related financing...

J.M Luna has over thirty years experience in the financial field. This includes accounting and taxes, leasing and hard asset money and commercial loans. U.S Corporate Capital Leasing assists the startup and seasoned business in all different types of industries. http://www.cclgequipmentleasing.com/lease_construction.htm

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