Conversion: The 4 Critical Questions NLCG Asks When Financing Used Equipment

Demystifying the Approval Process for Used Equipment Financing

The market for used equipment financing is vital for small and mid-sized businesses looking to expand their capabilities without the capital expenditure of new machinery. Yet, the financing process for used assets often carries a layer of uncertainty. Will the lender approve the equipment's age? Is the value right?

At NLCG, we specialize in financing quality used equipment. We don't just ask for paperwork; we focus on key questions that tell us the true story of the asset and your business. Understanding these critical questions is the fastest way to get your used equipment loan approved.

Question 1: What is the Equipment's Fair Market Value (FMV)?

A bank might rely heavily on the equipment's original price, which is irrelevant for a used asset. NLCG focuses on the current Fair Market Value (FMV).

• NLCG Underwriting Guidelines prioritize the liquid value of the asset today. We ensure the financing amount is tied directly to the equipment's resale value, making the deal safer for both the borrower and the lender.
• Tip: Be prepared with a recent appraisal or reliable market comparables for your used equipment.

Question 2: What is the Business's Annual Revenue and Cash Flow Consistency?

While your credit score is a factor, cash flow is king. Especially when financing used assets (like an older but well-maintained Skid Steer or Boom Truck), we need to confirm the business can comfortably manage the monthly obligation.

• NLCG Financial Specialists focus on the longevity and stability of your income. We look at your operating history to gauge the consistency of your business and its ability to turn the newly financed equipment into reliable revenue.

Question 3: Who is the Seller, and How Will the Funds Be Used?

The seller's identity matters. Financing equipment purchased from a reputable dealer or vendor is often quicker than a private party sale.

• Funds Usage: The financing must be tied directly to the purchase of the asset. Whether it’s paying a vendor directly or reimbursing your business for a recent deposit, the purpose of the funds must be clear. This provides transparency and expedites the closing process.

Question 4: What is the Asset's Remaining Useful Life?

Unlike a traditional bank that may impose strict age limits (e.g., "no equipment older than 7 years"), NLCG assesses the remaining useful life of the specific asset.

• If your used equipment is a low-hour asset with strong maintenance records, the age limit becomes highly flexible. If the equipment has strong market demand (like a popular CAT or Bobcat model), the useful life is extended, improving the financing outlook.
• Tip: Provide detailed maintenance records and photos to support the equipment's value.

By preparing honest answers to these four questions, you can significantly accelerate your application and get the financing you need. Consult the Associated Equipment Distributors (AED) for market data on used equipment values.

Ready to Fund Your Used Equipment? Take the Next Step

• Path 1: Start Your Application Now (Best)Get a decision on your equipment funding in under 4 hours.APPLY HERE: Fast Online Application
• Path 2: Speak with a SpecialistDiscuss custom terms and large capital structures with an NLCG specialist.CALL NOW: 1 (858) 345-6338
• Path 3: General InquiryHave a basic question about documentation required for older assets.Visit Our Contact Page