Construction Companies Use Equipment To Secure Working Capital Loans

Aug. 6, 2012 - PRLog -- The business lending environment is still tight for many small business owners. As a result, they have to turn to unconventional ways to obtain the financing they seek. One industry that has been negatively affected by the downturn in the market is construction. The construction industry has been effectively shut out of lending because of the slow down in building and the real estate market's inability to bounce back in a significant way. Many banks have decided not to lend to construction companies altogether. This leaves them with very few options.

VMI LLC provides construction companies with a viable financing alternative in which they use their assets to secure a working capital loan. These are called collateral loans or asset based loans. The construction equipment is collateral to obtain a loan for working capital.

There are many advantages to obtaining working capital this way. First, credit is not a determining factor. Under VMI's program, damaged credit is accepted. In fact, all credit types are considered. They will even accept companies with tax liens. Second, poor cash-flow isn't a problem. Finally, the loan proceeds can be used however the business owner sees fit. There is no draw-down schedule.

There are some factors that can strengthen the applicant's ability to get funded such as having project contracts, owning multiple units of construction equipment free and clear and bringing in solid annual sales.

However, the downside to this type of financing is that the money can be expensive. These are not  typical bank installment loans based on a specific interest rate, rather these types of loans are based on a buy rate factor. Each situation is calculated differently based upon a number of factors;  but if financing options are limited, then this could be a good alternative.

Skylar Marshall, Communications Specialist for VMI states "We provide the best funding alternative to business owners with blemished credit but who still have assets that can be used to help them put money in their pockets. Our customers are motivated to obtain financing as quickly as possible and this is their best solution."

To find out how to get a working capital loan using construction equipment as collateral, please visit http://www.financeheavyequipment.com.