Many brokers miss the opportunity to refinance equipment to generate working capital for those going through some really tough times. When you support dealers, it’s easy to just focus on the equipment purchase. But the refi—especially for the challenged credit—can create long term customers and deliver some really nice paychecks. Here’s what we mean…
When the tax lien, BK or other scary credit thing arises in the equipment purchase process brokers miss the point. These customers often are seeking new equipment in this very difficult season of their business because they are desperate for new money coming into their business. They think adding more business is the only way to generate the cash but they are missing the locked equity they have in their equipment. A quick refinance on a few skid steers or the 5 trailers sitting out back might put $10,000-$20,000 or more in their pocket. And that’s big money when you’re in big trouble.
But who will do that deal? In this economy there are all kinds of people that spin yarns about being able to help someone in this spot, but is important to look for a funder that has been doing this for a while. Someone who has ridden the cycles and is positioned to help the client out of trouble. The equipment refi should be pretty simple and quick. Anyone who makes it extremely complicated or requires a $15,000 appraisal from someone with a $7500 tax lien is kind of missing the point don’t you think?
Once you’ve found the funder who can really help and have one or two of these refis under your belt, you’ll discover a few things. First, this pays. Maybe a little extra work compared to the 750 CBR flow transaction, but then again…you’re not having to compete against stupid rates and you’ll make 3-4x as much money. Second, you will have helped a customer when they need the help the most. That’s loyalty. So when they get out of trouble and are looking at the new purchase they’ll be less concerned with the difference in their 7.5% and your 9%. Finally, you have a new solution to sell. Something you can proactively market to more than just dealers.
At Dakota, we are long-time asset-based direct funders for the broker community. We work quickly, simply and help you expand your business in areas you may have simply ignored in the past. Let’s talk.