Equipment Financing

Companies often have difficulty arranging equipment financing secured by new or used equipment, or by a combination of both.  This difficulty can arise from perceived low collateral values of the equipment sought to be financed by the borrower's existing equipment financing company or lender, adverse operating conditions in particular industries, or from a host of other factors.

The London Manhattan Company is in daily contact with a large universe of specialty equipment financing companies and lenders.  LMC has been extremely successful in arranging equipment financing for its clients by utilizing sale leaseback structures as well as conventional equipment financing.  Refinancing portfolios of existing equipment financing loans previously financed on a one off basis (i.e., one piece of equipment at a time) can result in dramatically lower debt service for the borrower, as well as longer (more favorable) amortization periods, and increased availability for the client.  Case studies follow from recent equipment financings provided by The London Manhattan Company.


Equipment Financing Case Study 1:  Used Equipment Sale Leaseback



The London Manhattan Company is pleased to announce it has just provided New and Used Equipment Financing for a manufacturing client located in the Northeastern US. This equipment financing produced substantial new liquidity for the borrower.

The Situation:

The borrower was a historically profitable manufacturer with approximately $20 million in annual sales. It was forced to terminate an unprofitable relationship with a major client, and struggled to replace lost revenues thereafter. As a result, the borrower has had virtually no net income for the two prior years. The borrower was desperate for liquidity and was anxious to secure a new equipment financing facility.

The Financing:

This equipment financing had the following attributes:

Amount Financed: $4 Million
Structure for Existing (Used) Equipment Financing: Sale Leaseback
Structure for New Equipment Financing: Lease Line of Credit
Term: Forty Eight Months
Extensions: To Sixty Months Upon Certain Conditions
End of Lease Options: Borrower Can Repurchase Equipment or Enter Into New Lease
 
 


Equipment Financing Case Study 2:  Used Equipment Financing Term Loan



The London Manhattan Company is pleased to announce it has just provided Used Equipment Financing for a construction services and equipment client located in the Western US. This equipment financing cut the borrower’s monthly equipment debt payments by over 50% due to a ten year amortization schedule, which is exceptional for used equipment financing.

The Situation:

The borrower was a historically profitable construction services and equipment client with approximately $12 million in annual sales and robust cash flow. However, the company had an inefficient array of just under 30 different equipment financing facilities that consumed all of the cash the company produced, and then some. The borrower was desperate for liquidity and debt service relief, and had approached numerous equipment financing companies prior to contacting LMC.

The Financing:

This equipment financing had the following attributes:

Amount Financed: $17 Million
Structure for Existing (Used) Equipment Financing: Secured Term Loan
Term: Sixty Months
Amortization: 10 Years
Pricing: Computed on Prime Plus A Margin
Debt Service Relief: Monthly Payments Reduced By More Than Half
Additional Availability From New Equipment Financing: Yes
 
 


Equipment Financing Case Study 3:  Used Equipment Financing Bridge Loan



The London Manhattan Company is pleased to announce it recently arranged equipment financing for a manufacturer located in the southeastern US based solely on the financed equipment’s collateral value.  The borrower could not provide debt service coverage for new and/or used equipment financing due to previous operating difficulties.

The Situation:

This manufacturing borrower had a long history of successful operations with annual revenues running just under $20 million. The company suffered mightily from the effects of September 11, and was forced to close two of its three manufacturing locations and consolidate operations in the remaining plant.

The company had significant operating losses and deterioration of net worth. The company’s existing lender then sold the manufacturer’s distressed senior debt to a third party investor. The company had an immediate need for capital to arrange an accommodation with the investor, but could not provide debt service coverage to attract new equipment financing.

The Equipment Financing:

LMC arranged new Equipment Financing with the following attributes:

Loan Amount: $2.6 Million
Equipment Financed: Manufacturing Equipment Located in Borrower’s Plant
Loan Term: One Year
Loan To Value: Percentage of Liquidation Value of Equipment Financed
Collateral: 1st Position Lien on Equipment Financed
Payments: Monthly Principal and Interest Payments
Prepayment Penalty: Yes; Six Months Minimum Interest Obligation
Personal Guarantees: None
Debt Service Coverage: Not Required
 


If you need equipment financing, please call us to discuss your requirements.  We have many different programs available that can be tailored to satisfy the specifics of your situation.

 

Call Now To Ask About Our Special Equipment Finance Programs

Call Ron Giguere (pronounced Juh-GAYR) now at 888-859-6025 and ask about our special equipment finance programs. We often use these to finance our manufacturing clients. We even have collateral based equipment finance programs for cases where the borrower cannot show debt service coverage due to operating difficulties or prior year losses.