Can equipment help secure a loan to buy a landscaping company?

Landscaping equipment is useful security because it is tangible and has a resale market. A lender will ask for a list with ages, condition and serial numbers, and may order an independent appraisal. Well-kept machines with clear ownership are easier to rely on than old units with unknown history.

Do not assume everything counts. Items that are already pledged to another lender, leased or owned by a worker personally may not be available. Specialized or heavily worn equipment may carry less weight than common trucks. Ask the lender early how it treats each category and which items it would exclude.

Remember that equipment secures a loan, but income repays it. Be ready to show profitable seasons, the plan for the winter months and how the crews will stay with the business. Ask about government-backed programs and compare more than one lender’s terms, since each treats equipment a little differently. Your accountant can help you judge how much security you are willing to pledge, and your lawyer can review what you sign. Expect the lender to ask about insurance on the equipment, since a stolen or damaged machine would reduce its security.

Key takeaways

• Prepare an equipment list with condition, ownership and any existing claims.
• Ask each lender how it treats trucks, mowers and trailers differently.
• Expect to show cash flow as well as security.
• Confirm insurance covers the equipment you hope to pledge.