EQUIPMENT
LINE OF CREDIT

Streamline your equipment acquisition process for operational
efficiency and reduce procurement costs with a credit facility.

WHAT IS AN EQUIPMENT LINE OF CREDIT?

An equipment line of credit is a convenient and flexible financing option that provides businesses with streamlined access to capital for equipment acquisitions. Operating similarly to a traditional line of credit, it offers a predetermined credit facility to be drawn upon as needed to finance new or used equipment. This allows private equity-owned companies to continuously acquire or upgrade equipment without the hassle of applying for a new loan. The equipment purchased typically serves as collateral, leading to more favorable terms for the borrower. The available revolving credit facility is replenished as payments are made, providing continuous access to capital. This type of finance structure helps companies effectively manage cash flow by spreading out the cost of essential equipment over time, offering a quick and convenient way to finance a portfolio company’s equipment needs.

How Does an Equipment Line of Credit Work?

Securing an equipment line of credit begins with an initial credit underwriting process. The lender will evaluate the company’s creditworthiness and set a credit line based on factors like the business’s financial health and the fair market value of the equipment. Once approved, the company can draw funds up to the credit line amount to acquire new or used equipment.

As payments are made, the available credit is replenished, and the business can choose to draw additional capital when needed. This revolving nature empowers companies with the flexibility to access capital for future equipment needs. The equipment line of credit usually has a set term, which may be reviewed for renewal based on the business’s payment history and ongoing needs.

An equipment line of credit is a flexible and efficient way for sponsor-backed companies to manage cash flow, putting the power of financial decision-making firmly in their hands.

CHOOSE WINGSPIRE EQUIPMENT FINANCE

We make securing an equipment credit facility for your business easy.



LESS RESTRICTIVE THAN TRADITIONAL LENDERS

There are no corporate guarantees, blanket liens, or financial covenants required.



STREAMLINED FUNDING MANAGEMENT

We handle vendor invoices and payment schedules with one Master Lease Agreement.



NO HIDDEN CHARGES OR FEES

There are no associated hidden costs for non-utilization of the line of credit.

BORROWER PROFILE:

TRANSACTION SIZE

$3MM-$50MM+

CREDIT PROFILE

CCC+ to BB-

ANNUAL REVENUE

$100MM+

MINIMUM EBITDA

$10MM

THE ADVANTAGES OF AN EQUIPMENT LINE OF CREDIT

A strategic financing solution for portfolio companies looking to acquire new equipment or upgrade their existing assets.

QUICK ACCESS TO CAPITAL

Enables businesses to finance equipment purchases quickly, reducing operational downtime and maintaining production efficiency.

LOWERS ACQUISITION COSTS

Spreads out the cost of equipment expenditures over time, effectively helping cash flow management and budgeting.

PROVIDES FINANCING FLEXIBILITY

Get access to capital as needed, allowing businesses to make multiple draws for equipment purchases without reapplying for credit.

IMPROVES FINANCIAL PLANNING

It helps companies plan for future equipment needs without the uncertainty and lengthy process of securing new financing for each purchase.

MAIN TYPES OF EQUIPMENT LINES OF CREDIT

There are two primary types of equipment lines of credit: revolving and non-revolving. These two types differ significantly in how the credit facility is managed and replenished after the funds are utilized. The choice between revolving and non-revolving lines of credit depends on the nature and frequency of the business’s equipment financing requirements.

A revolving line of credit allows the credit limit to be replenished as repayments are made. This feature provides continuous and flexible access to capital, making it an excellent option for businesses with ongoing or recurring equipment needs. For example, portfolio companies that frequently upgrade their machinery or need to make regular equipment purchases will benefit from the flexibility and continuous availability of capital that a revolving line of credit can offer.

In contrast, a non-revolving line of credit is intended for specific, one-time purchases. After the credit limit has been used and repaid, the line is closed, and any further financing would require a new application. This type of credit is ideal for portfolio companies with distinct and infrequent equipment needs. For instance, if a company needs to make a significant one-time purchase, such as buying a new piece of heavy machinery, a non-revolving line of credit could be a viable option.

REVOLVING LINE OF CREDIT

  • Credit Replenishment: As payments are made, the available credit is replenished, allowing you to draw funds again up to the original credit limit.
  • Continuous Access: Provides ongoing access to capital, making it ideal for recurring expenses.
  • Flexibility: You can use the credit line multiple times within the credit limit without needing to reapply.

NON-REVOLVING LINE OF CREDIT

  • Single-Use Limit: Once the credit limit is used and repaid, the line of credit is not replenished.
  • One-Time Access: Provides one-time access to funds, making it suitable for specific, non-recurring expenses.
  • Less Flexibility: Borrowers cannot reuse the credit line once it is repaid.

industries that can BENEFIT FROM a CREDIT FACILITY



TECHNOLOGY

Businesses in the tech sector can acquire the latest hardware and software to run their operations more efficiently.



CONSTRUCTION

Provides construction companies with the capital needed to acquire heavy machinery and specialized tools for ongoing projects.



MANUFACTURING

Companies can use an equipment line of credit to purchase and maintain essential production machinery.



FOOD & BEVERAGE

It can help companies invest in specialized processing, packaging, storage, and distribution equipment.



HEALTHCARE

Provides financing for ongoing procurement of critical medical equipment and technology to enhance patient care.



TRANSPORTATION

The financing can be used to expand truck fleets and purchase specialized trailer equipment.

PARTNER WITH A LEADING COMMERCIAL FINANCE LENDER

Wingspire Equipment Finance is a leading provider of equipment financing solutions, including equipment lines of credit. We’ve earned the trust of sponsor-backed, middle market companies across diverse industries. Our non-bank status allows us to offer flexible financial solutions tailored to your needs. We work with a wide range of credit profiles, which makes us an ideal partner for private equity-owned borrowers seeking an equipment line of credit. Partnering with us, you can expect personalized service, streamlined access to capital, and a commitment to helping your business thrive.

EQUIPMENT LINE OF CREDIT FINANCING:
FAQs

An equipment line of credit is ideal if your business requires regular equipment upgrades or purchases. It offers flexible, ongoing access to capital and allows you to spread out equipment procurement costs over time. This type of financing suits businesses that prefer drawing funds as needed and using the purchased asset as collateral.

Though an equipment line of credit is mainly used for equipment purchases, it can also cover soft costs like shipping and installation, ensuring the equipment is operational.

Rates and terms may vary by lender and borrower creditworthiness. Terms include a set credit limit, payment schedule, and tenor that can span several months to years. Wingspire Equipment Finance is a direct lender which allows us to offer some of the most competitive rates in the commercial lending industry.

Some equipment lenders may charge non-utilization fees if the borrower does not use the entire credit line during the specified tenor. These lender fees are typically a small percentage of the unused credit. Wingspire Equipment Finance does not charge its clients non-utilization fees for its line of credit financing structure.

An equipment line of credit provides a revolving credit limit for ongoing needs, allowing you to draw, repay, and reuse funds. An equipment loan gives a lump sum upfront for a specific purchase, repaid over a fixed term, and not reused after repayment. The line of credit offers greater flexibility, while the loan is better suited for one-time purchases. Wingspire Equipment Finance provides equipment lines of credit and equipment loans and will tailor its financing structures to meet each business’s specific needs.