For vendors that need to finance customers, we have financing for you!
Collateral loses it’s value fast after the sale.
Repossessing the assets are hard after a customer defaults.
Recovery may be impossible. Collateral located inside of another business may be hard to get back.
Vendors that need to finance customers: Example of challenges.
A bowling alley contracts with 1 company for vending machines and the machines are financed through a lender.
The customers defaults and the lender wants the machines back.
The lender hires an outside company to repossess the vendor’s machines. They show up at the bowling alley and the manager does not allow the machines to be removed.
Now the owner of the business has to be called to agree to the removal. If they do not agree, then the lender may have to take a loss on the loan.
The case can be taken to court, but this may cost the lender more than the assets are worth. Instead, they usually try to negotiate. When that fails, the loan is considered a loss.
These are some reasons why vendors have a hard time getting customers financed.