Transaction
A manufacturer purchased equipment for automation. Shaffer Capital facilitated financing for 125% of the machinery cost.
Published financing features
- Financing included soft costs, engineering, and setup costs
- Equipment was 50% no-interest and 50% at preferred rate
- Amortization of 12 years
Published client benefits
- 125% of costs financed
- 50% of financing was interest free
- Extended amortization
- Increased production capacity by 25%
How this kind of financing works
Equipment financing is usually quoted against the invoice price of the machine, which is not what the installation actually costs. Freight, rigging, engineering, electrical work, commissioning and training are all required before the asset produces anything, and a facility limited to the invoice leaves those to be funded from working capital at exactly the moment it is most stretched.
Financing above the purchase price exists to close that gap. Advancing more than the hard cost of the machine means the lender is lending against the installed, productive asset and the cash flow it is expected to generate, rather than against resale value alone. That requires a clear view of the efficiency the equipment is being bought to deliver.
Amortisation should track the useful life of the asset. A term materially shorter than the life of the machine creates a period where the business is still paying for equipment whose productivity gain has already been banked. Where a portion of a facility carries no interest, it is generally manufacturer or programme support rather than lender pricing, and it is worth asking which part of a blended quote is which.
Historical example only. It is not a promise of terms, availability, or results for a future transaction.
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