Equipment-Only Loans at Celtic Capital

We get many questions from business owners about our Equipment-Only Lending Program so we asked Mark Hafner, President and CEO of Celtic Capital, a series of questions to clarify the lending parameters:

Q. When will you do an equipment-only loan?
A. When we do equipment-only deals, (whether for a pay-off or to provide additional working capital) ideally, what we’re financing is existing manufacturing equipment owned by the company that’s in a plant owned or leased by the company. The equipment needs to be in the facility where we can see it and it can be appraised.

Occasionally, we’ll do exclusively rolling stock (i.e. trucking companies). And we’ll do a capital expenditure loan when it’s connected to an accounts receivable loan.

Q. How do you determine the borrowing base?
A. We lend off of the forced liquidation value appraisal. If there’s no prior appraisal or no fairly detailed list of the equipment, it’s hard to get a sense of its value until we get an appraisal.

As a first step, it’s beneficial for you, the borrower, to put together a list of what you have that includes the year the equipment was manufactured (not the year you bought it) and a description of the equipment (make, model and serial number). With that list we can get an estimated value and then come back with a proposal on something that makes sense. There is no cost to you for this.

Q. Most lenders won’t write equipment-only deals. Why is that?
A. Each lender has its own preference on the collateral they like to lend against (i.e. equipment, inventory, real estate). Many don’t like to lend on anything where the amount of the loan would be too large relative to other loans it may have with a given company or to provide an equipment-only loan a stand-alone basis. Some lenders may not be comfortable with the valuations of the equipment and how those valuations hold up to the life of the loan and/or if they can get to the equipment, if needed.

In addition, lenders need to be comfortable that a business can support the payments and that they’re working with a cooperative borrower in case of liquidation. Stand-alone equipment loans involve a great deal of time on the back end if a borrower does default.

At Celtic Capital, we’ve been funding equipment-only loans for a number of years and we’re very comfortable doing so. For more information, contact Mark Hafner at 800.742.0733 or

About Celtic Capital
Companies looking for working capital to cover operating expenses, fund growth, increase buying power and take advantage of vendor discounts and rebates turn to Celtic Capital. With an appetite for the more complex transactions, Celtic Capital has a history of success in crafting creative, flexible asset based financing solutions from $500,000 to $5 million with no financial covenants.

As an independent lender, working with companies nationwide, Celtic Capital is willing and able to alter price and deal structure and expand lines of credit to handle its clients’ increased revenues; and when cash flow is an issue, will look toward providing an inventory facility to help offset lost cash flow.

If you know of, or are, a business in need of non-traditional financing, contact Mark Hafner at 800.742.0733 or, or visit us at