PDA

View Full Version : Feedback on Raising Capital for a Heavy Equipment Business



RegencyEquipmentRental
03-28-2014, 11:15 AM
Hi everyone, I'm looking to raise capital for my heavy equipment rental business, and I'd be very interested in hearing your feedback. My partner and I are seeking investors who would be interested in a unique financial structure- our pitch is below. It would be terrrific to hear your thoughts!

__________________________________________________ _________
Regency Equipment Rental (RER) is a heavy construction equipment leasing company. We are seeking capital to expand our fleet. Examples of equipment that will be purchased are Skid Steers, Excavators, Man Lifts and other equipment from world renowned companies such as Deere, Caterpillar and Case.

RER uses an innovative investment structure that offers both income and the security of owning a hard asset with a robust secondary market. Each investor will form their own Special Purpose Entity (SPE) to purchase and own all equipment funded by that investor. This SPE will be 100% owned by the investor. RER will advise the investor what equipment to purchase, and arrange the entire purchase, taking advantage of our bulk buying power and industry knowledge. Prior to the purchase, RER will net lease the equipment for a pre-defined term, providing immediate income to the investor. During the lease period, RER will be responsible for all upkeep and maintenance costs of the equipment. At the end of the lease, the equipment will be sold by RER with the proceeds split between investor and RER.

This investment structure offers advantages to the investor over a traditional loan or equity investment:
1. Security - Assets are 100% investor owned. Heavy Equipment has a vibrant secondary market, similar to used cars.
2. Tax Benefits* - There are many tax advantages to owning the equipment. One can depreciate the equipment or be able to claim a home business and take advantage of self-employment or other tax breaks.
3. Flexibility - Investors can structure their company as they please.
4. Financing- Investors may qualify for favorable financing terms.
5. Scalability- Our investors, can scale up, or down, at their discretion.

bizbuyer
04-03-2014, 05:32 PM
Have you looked at a Constituency Trust (ESOP) fund? An ESOP is a great tool for business finance and may serve your purpose. Driven mainly by the number of employees you have and the revenue stream coming in, your ESOP has the ability to borrow the capital in exchange for shares in the company. This tool is endorsed by Congress and there are many commercial lenders willing to loan to an ESOP. You can structure the deal however you feel fit but the main goal is to use the "Pre-Tax" earnings and up to 25% of covered payroll to payback the loan. Usually ESOP loans are 3-7 years but I've seen them go as far as 10 years.

Good Luck