Equipment Financing for an Equipment Re-seller Business

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by a searcher from Stanford University - Graduate School of Business
in New York, NY, USA

2yrs ago

Equipment Financing for an Equipment Re-seller Business

Hi all, I am under LOI with a company that does Energy Equipment Inspections, Repairs, Refurbishments etc (think turbines, generators). There is a huge potential for actually buying old equipment on their own account and pre-sell at crazy margins.

To give you an example, there are currently GE turbines in the market at $5m each. They can buy them, refurbish them (another $1m) and deliver at $12,5m each in 3 months to a client who'd pay $3m today with a contract/LoC for that delivery. $3m shortfall needs to be financed. This single deal would immediately add roughly $10m in EBITDA to their current $6m. In essence the debt would be triple-guaranteed by the client's LoC, equipment itself and company cashflow.

I am looking for bank debt for this particular opportunity, and for a line of credit for the ramped up line of business.

Any pointers, advice, etc. much welcome.

1 Like

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reply by a professional 2yrs ago
in Crystal Bay, NV, USA

You can consider getting a warehousing line of credit from a bank secured by the UCC filings and Term contracts you provide your equipment buyers. ZimpleMoney.com loan managment platform works in this application very well and becomes your banks system of record to review your long term receivables.

reply by an investor 2yrs ago
from Duke University in Atlanta, GA, USA

Oltac - I am looking for a similar solution. Did you find a solution here? Let's connect on it - would love to help each other. See my recent post for a summary.