Equipment Financing Home Builder Secures Equipment Loan
Author: Casey Marie Long
Date posted: 12.20.23

Over the past couple of years, the demand for new homes has skyrocketed and builders are not able to build homes fast enough to meet the demand. Homebuilding requires large outlays of capital at the beginning of a project to buy land, secure permits, and purchase supplies. Along with the smaller items, the new equipment must be obtained to complete the construction projects.

A medium-sized builder, known as a Home Builder in Southern California, needed a new excavator as their old one wore out. The new excavator cost $500,000, but they couldn’t find a used one to buy. Home builder secures equipment loan to solve this. Normally, they could have rented one until they could afford a new purchase, but the current housing market had no available equipment for rent. To solve this, they sought an Equipment Loan, but it was more challenging due to market uncertainties. Fortunately, after exploring options, Home Builder secures equipment loan, enabling them to buy the much-needed excavator and resume construction projects on time.

Home Builder Secures Equipment Loan

To maintain the progress of their projects, they had an urgent need to purchase new equipment quickly. However, due to the various other project expenses, they found themselves short on cash. Consequently, they decided to seek an equipment loan to finance the purchase.

 

After researching different options, they settled on a 5-year equipment loan. Knowing they would need the excavator for several upcoming projects, purchasing the equipment made sense instead of leasing it. After submitting the required documentation, including prior tax returns and financial statements, they secured a 7% loan.

Once they submitted the paperwork, they actively searched for and found a supplier. They completed the equipment purchase within 10 days. Although their project experienced a slight delay, the equipment loan facilitated their return to work. In just 6 weeks, they were back on track with their initial timeline. Thanks to the manageable loan payment, they retained cash reserves that proved valuable for handling unexpected increases in labor and supply costs.

 

The building project was completed without further hiccups. The builder was able to sell all the homes in the development and move onto the next project by the end of the year.

Home Builder Secures Equipment Loan
About The Author | Casey Marie Long

Casey has 12 years of technical writing experience. She is also a CPA and bookkeeper. Casey graduated from the University of St. Thomas (Minnesota) with a B.A. in mathematics and currently resides in San Diego, CA.

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