In today’s unstable economy, the startup and seasoned business has an unique opportunity to acquire an attractive deal for off leases and repos for commercial trucks and construction equipment. Due to a contracting economy, many lenders have excess inventories on their books that they need to put back on the street. These in-house inventories are non income producing, therefore putting pressure on the lender to make a deal with the consumer. These deals can be found in the price, the financing or a combination of both.

An off lease commercial vehicle and/or construction equipment has been returned to the lender as the lease has expired. The lessee has made a decision to return the item in lieu of exercising the buyout option. A repo has arisen due to a default of the lessee for non payment terms or a violation of the terms of the lease. Either way, the lender has taken these trucks and/or equipment back and now must recondition the items and either sell these items or re-lease them. The lender will either advertise their inventory through their internal sales force or outside professionals such as brokers to move their inventories as quick as possible. Sometimes as these inventories either sit or whatever reason aren’t moving, the lender may put these items up for auction.

For this article, the type of items we are going to identify as potential off lease and repo deals are the following:

Dump trucks, flatbed trucks, grapple and landscape trucks, fuel and lube trucks, bucket and boom trucks, over the road and day cabs, water trucks, tow trucks, box vans and straight trucks, dry van and reefer trailers, end and bottom dump trailers, flatbed trailers, backhoes, bulldozers, crawler tractors, forestry equipment, excavators, forklifts, and other type loaders.

Some of the ways the startup and/or seasoned business can locate these deals are through trade publications, surfing internet search engines, contacting lease brokers for information and speaking to lenders directly.

Some of the lenders in the market have advertised personal credit qualifications as low as 575, prior bankruptcy rules amended or ignored and startups welcome. Additionally, the front money to commence the lease can start as low as first payment to whatever you might able to negotiate.

In conclusion, this is a buyers market for commercial trucks, trailers, and construction equipment. Check out all the deals in the market and make sure that you have a stable income base to assume whatever debt that you may occur. Happy hunting for your acquisition and related financing.

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The business owner has to consider two options when it comes to buying construction equipment. First of all there are primarily two paths to getting the construction equipment needed. Buying the equipment outright or leasing it. Both have advantages and drawbacks.

Business Loans Can Help Buy Needed Construction Equipment

Bulldozers, backhoes, and other digging equipment are some of the equipment necessary for starting a construction business is very expensive. Buying the equipment outright can be very cost prohibitive for the business start-up, but a business loan can level the playing field. If the construction equipment is maintained properly, it will last years past what a lease payment offers.

Business owners also like the fact that once the business loan is paid off they own the equipment outright. This helps the business build accrued equity. The equity can be used later in time to help secure working capital if the need arises. This will most likely not be necessary since a good unsecured lines of credit can provide all the extra working capital they need in most cases. In terms of taxes, equipment that is owned can be counted on taxes as depreciation.

The Benefits of a Leasing Construction Equipment

Tax benefits of leasing equipment is one of the top benefits to the business owner. The IRS has made leasing 100% deductible and many business owners love this aspect of leasing equipment. The type of lease that gives this benefit is what is called a “true lease.” If you do not know what we mean by a true lease, the Internal Revenue Service uses the term true lease to define how a lease is structured.

To qualify for “true lease” status, the construction equipments must be declared at fault fair market value when the leases end. This all this sounds complicated, but it really isn’t. If you have questions it is good to consult with a professional tax consultant to help you figure out your best options.The leasing company will often give an option to buy the equipment following the terms of the lease. Another benefit to leasing, is that business owners an often enter a lease agreement without a down payment. This is great for start-up businesses that do not have a lot of cash on hand.

A Final Thought on Leasing Equipment verses Buying

When considering leasing verses buying equipment, it is important to consider the future and the long term effects to your business. Look at both sides of the coin, and determine the best route for your business.

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