Heavy Equipment Financing Shortfalls Creating Barriers for Businesses

Unable to make large equipment purchases to support growth, small businesses shift focus to alternative funding sources.

HOUSTON, October 11, 2022 – Leading invoice funding company Charter Capital says small businesses are recovering and eager to grow but are hitting a wall when it comes to obtaining heavy equipment financing. Often leveraged by businesses in construction, oil and gas, manufacturing, transportation, and other industries, heavy equipment financing is designed to make it easier to purchase expensive machinery or vehicles that are necessary for daily operations and growth. However, many seeking assistance are coming up short when approaching traditional lenders, creating a surge in interest in alternative funding options. Full coverage of the topic can be found in “Heavy Equipment Financing: A Beginner’s Guide to Getting Funding,” which is now live on charcap.com.

The company notes that purchasing heavy equipment is typically preferable over leasing when a business has strong cash flow, the equipment will be used to generate revenue, and the asset will be held for an extended period of time. With more business owners reporting they don’t qualify for traditional heavy equipment financing, that the amount offered is too low, or they can’t generate enough cash for a down payment, purchasing, however, often seems out of reach.

“One of the biggest challenges with specialty equipment is that lenders from outside the industry can’t always properly value the asset,” explains Joel Rosenthal, Co-founder and Executive Manager at Charter Capital. “When a lender thinks something is worth less than it actually is, they may offer a loan that’s not large enough to cover the cost or outright deny the business owner.”

Rosenthal says that businesses will sometimes go for an SBA loan, term loan, or line of credit instead, though strict requirements related to credit and time in business often eliminate these options for growing companies. With invoice factoring, they can accelerate cash flow enough to make a purchase, bridge a funding gap, or provide a stronger down payment. 

“Invoice factoring is a welcome relief for small businesses gearing up for growth,” Rosenthal continues. “We’ve seen an uptick in business owners leveraging factoring for heavy equipment purchases lately because it’s so versatile and doesn’t have the same rigid requirements that other funding sources do.” 

Those interested in learning more about factoring may request a complimentary quote by calling 1-877-960-1818 or visiting charcap.com.

About Charter Capital

Headquartered in Houston, Texas, Charter Capital has been a leading provider of flexible funding solutions for the B2B sector for more than 20 years. Competitive rates, a fast approval process, and same-day funding help businesses across various industries secure the working capital necessary to manage daily needs and grow. To learn more, visit charcap.com or call 1-877-960-1818.

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