Lending · Private Credit
Equipment Financing
Credit secured on the assets that do the work.
Equipment is the most straightforward collateral in commercial lending: it has a serial number, a market and a resale value. Wesvel finances new and used equipment for operating businesses through loans and leases secured on the asset, and unlocks capital from equipment a business already owns through sale-leaseback.
Structures
An equipment loan advances a share of the purchase price, with the lender taking a first-priority security interest in the asset and the borrower owning it from day one. A lease has the funder own the equipment and the business pay to use it, with a purchase option at the end; it suits businesses that want lower payments or to refresh equipment on a cycle. A sale-leaseback buys equipment the business already owns and leases it back, turning a fixed asset into working capital while operations continue unchanged.
What is financed
Titled vehicles and trailers, construction and yellow iron, manufacturing machinery, restaurant and food-production equipment, medical and dental equipment, and technology and software where the vendor and residual value support it. New equipment is valued at invoice; used equipment by appraisal or established secondary-market pricing.
Underwriting
Two questions: can the business service the payment from its cash flow, and what is the equipment worth if it cannot. The first is answered from bank statements and financials as in the working capital program; the second from the asset’s type, age, condition, resale market and the speed at which it depreciates. Essential-use equipment, the machine the business cannot operate without, performs better than discretionary equipment, and is advanced against more generously.
Documentation and protection
A security interest is perfected against the equipment by a UCC-1 financing statement that describes the asset by make, model and serial number, and against titled vehicles and trailers by notation of the lien on the certificate of title. Because the loan funds the purchase, the interest is a purchase-money security interest, which ranks ahead of any earlier blanket lien on the borrower’s assets provided the filing is made within the statutory window after the borrower takes possession; the closing calendar is built around that window. A landlord waiver is obtained where the equipment sits on leased premises, and insurance naming the funder as loss payee is required before funds move. Vendor invoices are paid directly so proceeds cannot be diverted. On default the funder repossesses and sells the equipment, applies the proceeds under the documents and pursues any shortfall under the personal guarantee.
Practice
How Wesvel approaches it
- 01Advance rates are set from the equipment’s type, age and resale market, with essential-use assets treated more favorably than discretionary ones.
- 02Security is perfected and insurance confirmed before funds are released, and vendors are paid directly.
- 03Payment capacity is underwritten from cash flow using the same bank-statement analysis as the working capital program.
- 04Sale-leasebacks are sized to independent valuation of the equipment, not to the business’s book value.
More in Lending
- How a Facility WorksThe anatomy of a collateralized digital asset loan: borrower, collateral, custody, term and the controls between them.
- Collateral and Loan-to-ValueWhich assets qualify as collateral, how loan-to-value is set from their liquidity and volatility, and why the haircut is the whole loan.
- Margin Calls and LiquidationThe thresholds, cure periods and liquidation rules that protect a facility when collateral falls, and how they differ from on-chain liquidation.
- Custody and Triparty ControlWhy collateral sits with an independent custodian under a control agreement, and how instruction rights work through the life of the loan.
- Documentation and RecourseThe facility agreement, security and control documents, and what a lender can and cannot do when things go wrong.
- Borrower Diligence and Use of ProceedsWho Wesvel lends to, what it asks before it does, and why the use of proceeds is part of the underwriting.
- Receivables FinancingAdvancing against accounts receivable, whether by purchase or by loan: eligibility, verification, dilution, concentration and collections.
- Private Credit FacilitiesSenior secured and unitranche facilities to operating companies: security, covenants, monitoring and the role of the sponsor.
- Warehouse Lines of CreditRevolving facilities to lenders and originators, secured on the loans they make: borrowing base, eligibility, bankruptcy-remote structure and takeout.
- Asset-Based LendingRevolving and term credit secured on inventory, equipment and mixed collateral pools, governed by a borrowing base and field examination.
- Structured and Other DebtBridge loans, revenue-based financing, participations, forward-flow agreements and structured notes: the products used where a term loan or a borrowing base is the wrong shape.
- Underwriting and ServicingThe credit process behind every non-digital facility: analysis, approval, documentation, monitoring, servicing and workout.
- Short-Duration Business CreditShort-duration revenue-based credit exposure to operating businesses, and how the mandate underwrites and sizes it.