Refinancing is revising the existing terms of a financial agreement. Borrowers tend to refinance when interest rates fall, when their credit has improved, when they experience changes to their long-term financial plans or to pay off their existing debt through consolidation. Your credit and repayment status will be evaluated during refinancing. You can change the life of the loan and benefit from doing so.
Many companies don’t use this concept, but it can help you grow your business and protect you in the long run. We know how important large construction equipment is to your company. It’s necessary to know that if your equipment is worth more than the debt, you can use its equity to your advantage. Here’s how equipment refinancing can help your business out!
Reduce current payments
Sometimes your current financed equipment can cost your company a lot. You have the opportunity to refinance over a longer period of time, lowering your payments. This can work if you have equity in your equipment.
Get cash back
If your equipment has enough equity, you can also get cashback. You can use this money to pay off other debts, fund new equipment, grow your business and tackle other capital improvements.
Consolidate debts
If you have multiple loans for large construction equipment, you can put them together. This can streamline your payables and make it easier for you to keep track of what you owe.
Lower existing rates
If your current rates are high, you might want to consider financing at a lower rate to save on interest costs. Interest rates are expected to keep rising throughout the year.
Exit an existing lender
Banks and other financial institutions tend to lend out money when it’s best for them, not necessarily when it’s best for you. Again, if your equipment has equity, you can use this towards paying your lenders and going into a new agreement.
Purchase or sell your business
If you’re looking to sell your company or acquire a new business, refinancing your equipment can help get the sale going. You can pay the seller with the equity of your equipment and company assets, or give the buyer of your company a loan that’s backed by the equipment and assets.
Avoid balloon payments
A balloon payment is a larger-than-normal payment at the end of the loan term. Your payments may be smaller leading up to the end of your loan, but you could owe a large amount at the end. You can avoid balloon payments by refinancing and paying off the original loan and getting more manageable monthly payments through the new one.
Get the large construction equipment you need
Lyon Auction wants you to have the equipment you need for each job, and to keep scaling your business successfully. Consider refinancing your equipment with a lender who understands the equity of your equipment and can improve your borrowing abilities. There are several benefits to refinancing. Contact us to help you find the right equipment for the right price!
