Construction Equipment Equity: Your "Rainy Day" Cash Solution

Posted November 08, 2017

Recently, Commercial Credit Group’s Dan McDonough was invited to contribute an article to Construction Executive magazine, and he responded with a thought-provoking piece titled "Find the Hidden Equity in Heavy Equipment". The article addresses some of the challenges of owning a construction company, especially the typical “feast or famine” business cycle. Dan provides some practical advice for successfully navigating the cash flow roller coaster ride, and shows how one solution can be found in the equity you hold in your existing construction equipment. Read the full article and you’ll learn:

  • How to Survive and Thrive: “Choppy” cash flow may be an unavoidable reality. Therefore, the businesses that survive and thrive are the ones that develop a good strategy for sustaining the cash needed to support their operations through all seasons.
  • The Problem with a Line of Credit: The typical line of credit is based on receivables, but in the construction business, few companies can carry a line of credit based on their receivables, making this a rare type of lending for entrepreneurs.
  • A Different Way of Looking at Equity: Equipment may have equity, or value, beyond what is reflected on its financial statements, and that equity can be borrowed against. A good lender, familiar with the construction industry, will know where to identify the real equity in a company’s equipment.
  • Questions a Contractor Should Ask a Lender: The answers to these questions can help determine if the lender is the appropriate partner for this type of transaction, and more importantly, for the contractor’s business culture.

When a business has equity in construction equipment, it has plenty of options. The way to build equity is to buy good equipment, finance it and maintain it. That equipment will be there for a rainy day, no matter when that day comes.

Get a Free Equipment Equity Assessment

Want to learn more about how Commercial Credit Group can serve your company’s construction equipment financing needs? Please contact us, or give us a call at 704.731.0031.

DMCA.com Protection Status