Why equipment debt is different
Equipment loans and leases are usually secured by the equipment itself. If payments stop, the lender or lessor may have the right to repossess, which can shut down operations. That makes early, organized communication especially important.
What we look at
- Whether the agreement is a loan, a true lease or a finance lease
- The current value of the equipment compared with the balance
- Cross-default clauses that tie this agreement to others
- Personal guarantees
Possible approaches
- A temporary payment reduction or deferral
- Extending the term to lower monthly payments
- Returning equipment the business no longer needs, with a negotiated deficiency
- A negotiated payoff
Any proposal is reviewed with you and documented in writing before acceptance.
Questions
Can a lender take equipment without going to court?
Depending on the agreement and state law, secured lenders may be able to repossess without a court order if it can be done without a breach of the peace. Review your agreement and get legal advice if repossession is threatened.