Capital Solutions
Deal Of The Week
Customer wants to purchase an older Peterbilt
The Problem: Customer Buying 1999 Peterbilt With Terrible Credit
Lenders don't generally like looking at trucks older than ten years. We are no different so when our vendor sent us this deal we knew we had to find ways to work around the age problem. Here were the challenges:
- Customer scored a 520 on his credit bureau with recent slow pay. A bankruptcy from a year ago made things worse
- The truck he was buying was a 1999 Peterbilt. The auction value on this truck was below our minimum
- Customer had little in cash reserves in the case of a problem down the road. This created a huge cash flow threat if there was a problem with the truck
This was probably the toughest deal we have looked at recently. Our success depends on the success of our customers. This one was in doubt.
The Solution: The Vendor Provided A Warranty For One Year And The Customer Had Sufficient Collateral
The vendor understood our concerns about the age of the truck. He agreed to stand behind the motor for a period of twelve months. Here's how we put it together:
- Customer had a 2003 Freightliner FLD 120 for additional collateral
- He had a written contract with a major company. He had been with this company for three years
- The dealer warranty sealed the deal
We had great equity in the additional collateral. But we don't want to set this guy up for a problem. The dealer warranty eliminated the threat of sudden cost of repairs. With the help of the vendor we were able to close the deal.
Yes we can work miracles but sometimes we need a little help. With the vendor standing behind the truck we were able to put a deal together that would otherwise not have happened.