Heavy Equipment Line of Credit for Leasing Entity

May 19, 2024

by an investor from Duke University - The Fuqua School of Business in Atlanta, GA, USA

We recently completed a search and acquired a heavy equipment company that manufactures and sells equipment. There is a staggering level of demand on the leasing side that we'd like to take advantage of. We are looking for a group or solution that could provide financing that would effectively allow us to "purchase" the equipment at cost from our manufacturer and turn around to lease this equipment to the end user.

We would need a $2-5M interest-only revolving line of credit fully collateralized by the leased equipment.

Does anyone have experience with this and can help.

Please email redacted

Reply by a lender
from Clemson University in Reston, VA, USA

I have financed this exact scenario with a company in Delaware and it’s the best structure instead of doing multiple notes. The only drawback is when you dispose of the equipment as most banks will require the money be paid into the note. The best way I would recommend would be to set up a sweep with a cash collateral account, one this will allow you to pay less interest and two you’ll be revolving the debt consistently which banks like to see. redacted If it’s not in my market I’m sure I know someone who is.

Reply by a professional
from Harvard University in Clearwater, FL, USA

Hi Ken, I will send an email next... I work within mining finance and there are a number of banks who understand LOCs for heavy equipment leasing.

I emailed you requesting more information regarding what you are looking for to try and narrow down your options. If you still need assistance let me know.

+3 more replies.

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