Ontario equipment refinancing is available on both new and used equipment for many different types of assets and industry classifications.
For new equipment, the equipment refinancing opportunity is when you purchase an asset for cash and then decide after the time of purchase that you would prefer to have financing in place so that some or all of the cash used in the acquisition can be returned to the business cash flow for other purposes.
This is typical in situations where you need to perfect a fast close and don’t have time to get financing in place.
In these situations, most equipment financing sources will consider financing the assets as a new equipment purchase up to 6 months after the initial purchase was completed.
With used equipment, there are basically two Ontario equipment refinancing scenarios that we work with.
First and most common is in situations of growth where the business requires more capital to take on more sales, purchase inventory, acquire more equipment, and so on.
To get equipment financing approved for these types of scenarios at reasonable rates, the business has to show that it is not in any form of financial distress at the time of application nor is it expected to be in distress in the years and months ahead during which time a new loan or lease will be repaid.
And while the going concern business growth scenario can provide reasonable rates in a fairly competitive range, the same cannot be situations where the business is in distress.
When a business is in distress and needs Ontario equipment refinancing to try and survive the short term without a clear path to financial stability after a new loan or lease is put into place, the financing available falls into category of the asset based liquidation lenders.
Because of the higher risk of loss, these lenders will provide lower loan to value ratios and the rates charged can be anywhere from 1.5% to 3% per month on the outstanding balance.
This is what we call short term transnational financing where either the situation is going to improve in the short term, allowing the business to refinance again at a bank or institutional lender at lower rates, or the equipment refinancing secured buys the business time to wind down the business in an orderly fashion, preserving as much equity as possible.
If you are looking for Ontario equipment refinancing options for any of these three scenarios, then I suggest that you give us a call so we can quickly go over your requirements and provide you with refinancing options for your immediate consideration.