If you are in the market for new equipment, you know the wait can be considerable. As a result, we have seen a massive shift in the type of equipment our clients are purchasing for their businesses. Most clients are now opting to purchase second hand equipment to avoid these delays. The second hand market is booming, values of used equipment are holding strong and many private vendors are looking to sell their equipment without the large depreciation they would normally expect to see. Vendors are taking advantage of the market and opting to sell their gear privately to get the maximum return.
Here we will discuss the process of funding a private sale:
When arranging finance for equipment from private vendors it’s important for the lender to ascertain clear title to your equipment. Our experienced team are here to help you and the vendor through the process. Once we have secured an approval for your equipment, we will contact the vendor to obtain details to proceed with the funding of the equipment.
Whereas a dealer generally guarantees title, private vendors are not covered and so we will obtain all the necessary information from the vendor and present it to the lender, to ensure that:
a) you will get clear title to the equipment, and therefore
b) your financier will be able to register their interest in the equipment on funding the purchase.
The information obtained includes:
- Proof of original purchase (copy of original invoice and payment)
- Registration papers (if applicable)
- Details of vendor’s lender and pay out figures (if applicable)
This information enables us to identify the vendor, the equipment and any encumbrance/s which may need to be removed to ensure clear title.
We will also conduct searches on the vendor and equipment to verify the information provided.
Private sales also require an inspection of the equipment. This is a due diligence from the financier to ensure the equipment exists, and is identifiable with the details provided. The inspection is not for valuation purposes, so there is no need to worry that the equipment won’t “value up”. We work with 3 main inspection companies; Redbook, Olasio and Verimoto. Each of these companies charge fees for their services. These fees vary dependant on the equipment and location.
Most inspections are completed virtually via means of a video chat, where the inspector will direct the vendor to take certain photos of the equipment, or via an online portal uploading specific photos. There is an option to complete a physical inspection for vendors in metropolitan or major regions. Our team will work with you and the vendor to organise an inspection that best suits your specific needs.
Once this has occurred we will generate a tax invoice on behalf of the vendor for them to sign. If applicable, the invoice would include a disbursement to the vendor’s lender for their payout figure so that clear title is provided immediately on settlement, with the balance of funds going to the purchaser. We would then proceed to the preparation and execution of loan documents. Settlement of the transaction would then take place generally within a couple of days.
Whether you are looking at purchasing through a private sale or through a dealer, contact us today and we can help explain the process and options that are relevant to you.