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The Right Financing...During Challenging Times - CalContractor EG2020

Posted 05.22.2020

CalContractor Magazine recently spoke with James Seela, Regional VP, about financing options during challenging times. Below is the article. You can find the full edition at CalContractor Equipment Guide pages 42-43.

The Right financing solution could make a big difference to construction firms during these challenging times - james seela from ccg talks options

The heavy and civil engineering construction industry could not exist without the availability and use of large to small construction machines. Financing and maintaining this equipment is an expensive proposition, and fortunately, there are reputable financial sources that are ready and willing to help. Construction firms can choose to work with a bank or finance companies through the equipment manufacturer and distributor. There are also independent finance companies that specialize in only the financing of heavy machinery. Commercial Credit Group Inc. (CCG) is one of those companies, and James Seela (Seela) is their Regional Vice President overseeing 13 western states.

Seela is uniquely qualified in this industry as he has worked in both the heavy equipment sales end and the financing side of the heavy civil construction industry. He spent nearly six years as a territory sales manager with a well-known full-line construction equipment dealer in Colorado, before being recruited by CCG. “While working for the dealer, I utilized CCG as an alternative lender to help out some of my heavy equipment buying clients, and I was very impressed with how streamlined their services were and what a great alternative it was to other financing options,” says Seela. “The next thing I know, I am being offered a job and have been helping construction firms with heavy equipment financing ever since.”

Seela started as a Regional Sales Manager covering three states, before being promoted to Regional Vice President, overseeing the 13 western states. Seela currently manages seven regional sales managers and has three living and working in California. “We proudly serve the construction, transportation, and waste industries with flexible, customized financing options. My group specializes in construction financing as an independent source and full-service lender,” continues Seela. “We offer everything from standard purchase money loans to leases, debt consolidation, and refinancing. We also offer working capital loans where we lend off the value of assets and equity of an existing equipment fleet.” Seela explains that the core of CCG’s business is with customers with whom they have built long-lasting relationships over the years. “We are not a bank. We underwrite, we fund, and we service the notes as a full-service lender,” says Seela. “We have been in business since 2004 and have been through the great recession of 2008 and other cyclical challenges in this industry. Now we are faced with the reality of COVID-19, and we are here for our customers with financial solutions to help them weather this storm and maintain positive cash flow.”

Seela says that there are several options that CCG currently has available to help out during these challenging times. “If a company has equipment financed elsewhere, we can refinance those machines to provide relief and potentially lower the payments in the process. If they have equity in equipment other collateral sources, we can provide them with much-needed cash to see them through this crisis,” continues Seela. “We can also convert their lease or RPO and do all of this in one consolidated transaction. For some, it is about creating a new cash flow structure that will help them to operate their business comfortably. We service the full spectrum of the credit lending scenario, including those with A credit, B credit, or even a storied credit history that includes bankruptcy. We also help new fledgling companies that have not had much time to build a credit and lending history. We are very good at finding cash flow conscious solutions, even in troubling times.”

Whether you choose to go with CCG or another lending source, Seela reminds everyone to do their due diligence and look into every detail of a loan before signing on the dotted line. He points to some zero percent loans as an example where a client may be getting an unbelievable rate while paying a premium for the machine itself. “Cash is king, and whatever solution can provide you with strategic cash flow to operate your business is usually the wisest choice. You may get a better rate, but with 20 to 30 percent down, but that is cash out of your pocket that could be utilized to operate your business. You may find that going with a slightly higher rate where you only put down 5 percent or even just the first payment at closing is a better option,” says Seela. “A higher interest rate means paying more over the life of a loan; however, if you have to come up with $50,000 down, you may want to look at other scenarios. It is about the opportunity cost of that money.”

According to Seela, the vast majority of his customers appear to be busy right now, and their need for financing has not decreased. “We make an effort to create and foster relationships with construction equipment distributors and manufacturers and offer our services as an alternative lending source. A customer may reach a financing cap with a manufacturer or dealer, and this is where we can come in and extend additional credit during these occasional periods,” continues Seela. “In our business, we talk about the Three C’s of credit and lending, and that includes Character, Cash Flow, and Collateral. A loan is also dependent on the real value of an asset and the amount of funds requested. Right now, we are encouraging all of our clients and future customers to check out all of the SBA and PPP programs and see what is available for them at this time. I am fortunate to work for an amazing company, and we are here, ready, and willing to help out our clients any way we possibly can.”

CalContractor - EquipGuide2020 - Right Financing Solution