Why borrowers need to understand Remarketing
Remarketing appears in funding documents, application materials, lender disclosures, and ongoing servicing communications. Knowing the term in concept lets you read those documents with comprehension instead of skimming past.
The practical answer to "why does this matter" depends on where you are in the process. Application stage: it affects how the deal is structured. Funding stage: it appears as specific contractual language. Servicing stage: it governs how borrower and lender interact through the term.
Common context where this comes up
The term shows up in three places in most equipment financing transactions. First, at the application stage, where the lender uses the concept to assess the deal. Second, in the funding documents, where it appears as a specific provision tied to the lender obligations or the borrower obligations. Third, at term end or in the event of restructure or refinance, where the term governs how the deal unwinds.
Knowing where the term shows up in your specific paperwork is the practical step that protects you. The funding documents are the source of truth: application materials and verbal conversations do not override what the signed documents say.
Common misconceptions about remarketing
Two patterns of confusion come up regularly around this term. The first is mixing it with a related concept that carries a different practical effect. The second is assuming the lender treatment is standard across the market when it is actually lender-specific. Both are easy to verify in advance: ask us to walk through how the concept applies in your deal, and have the relevant section of the funding documents flagged at signing.
How we structure financing
The financing structure that fits depends on the actual situation. Below are the most common decision branches we walk through with buyers, in plain "if X, then Y" form.
- If You expect rate environment to improve in the next 12 to 18 months
- Then Consider open pre-payment structures or a shorter term you can refinance later. The trade-off is the upfront cost; the refinance option becomes valuable if rates drop 100+ basis points.
- If You are taking a Section 179 election this tax year
- Then Use a loan or $1 buyout EFA. Operating lease structures do not qualify for §179 election. Confirm equipment placed in service before December 31.
- If Your credit is below 640 and TIB is under 24 months
- Then Plan for 15 to 25 percent down, full personal guarantee, and a specialty program. Rates run 4 to 8 points above prime. Approval is still real but the structure is meaningfully different from prime programs.
- If You have access to manufacturer captive promotional financing
- Then Compare carefully against bank/independent lender rates. Captive promotions sometimes look better on stated rate but include adjustments (lower discount, required service bundles) that change the net economics.
- If You operate seasonally with revenue concentrated in specific months
- Then Ask for seasonal payment structures (skip payments in off-months, or ramped payments aligned to revenue). Many ag and landscape programs offer these at standard rates.
Timeline expectations
What actually happens day-by-day, from application to equipment in service. Most buyers underestimate one or two of these steps; knowing them up front prevents surprises.
Title transfer on titled equipment
1 to 4 weeks
Title transfer through state DMV adds weeks to closing on titled equipment. Out-of-state transfers run on the longer end. Title escrow accelerates this in many cases.
Equipment delivery and inspection
1 day to 16 weeks
Wide range depending on equipment type. In-stock equipment delivers in days. Custom-configured manufacturing equipment runs 8-16 weeks. Imported equipment runs 12-24 weeks.
UCC-1 filing and search
Filing: same-day. Search: 1-2 business days
UCC-1 financing statement files electronically same-day in most states. Pre-funding UCC search to confirm no existing liens runs 1-2 business days.
Insurance binder issuance
Same-day to 24 hours
Commercial auto and equipment insurance binders typically issue same-day from existing carriers. New policies for new businesses can run 2-5 business days to bind.
Wire transfer cutoff times
Typically 2-3pm PT / 5-6pm ET
After cutoff, wire processes next business day. Late-Friday signings often delay funding until Monday or Tuesday.
Application submission to decision
24 hours to 5 business days
App-only programs decision same-day or next-day. Full-financials programs run 3-5 business days as the file moves through credit, then operations.
Cost stack: what total ownership actually includes
The equipment purchase price is one line on the financed amount. The actual cost of ownership over the life of a remarketing deal includes the items below. Buyers who only budget for the purchase price often hit cash-flow surprise within the first 12 months.
- End-of-term residual or buyout. Lease structures: fair market value buyout at term end (FMV lease) or stated residual amount (TRAC lease). Loan/EFA structures: $1 buyout or no buyout. Plan for this from day one on lease structures.
- Pre-payment penalties. Standard early-payoff penalty: 3 percent of payoff in year one declining to zero by year three. Or flat fee of $500 to $2,000. Varies by lender.
- Documentation and dealer fees. Lender doc fee runs $150 to $1,500. Dealer doc fee varies. Both may roll into financed amount or pay at signing.
- Extended warranty or service contract. Optional but common. Annual cost runs 5 to 15 percent of equipment price on production equipment, 1 to 3 percent on commercial vehicles. Financeable with the equipment.
- Software licenses. CAM, design, control, and operational software. Often subscription-based with annual renewal. Can run $5,000 to $50,000+ per seat depending on equipment category.
- Operator training. Manufacturer-provided or third-party operator training. Runs $1,500 to $25,000 depending on equipment complexity. OSHA-compliant training required on many categories.
- Equipment purchase price. Base equipment price as quoted by the dealer. Negotiable, especially on used equipment and end-of-quarter new equipment.
- Personal property tax (where applicable). Annual personal property tax assessed by counties in many states. Runs 0.5 to 3 percent of assessed value annually.
Authoritative sources
The rate ranges, structures, and program details on this page are informed by our internal financing book and the public industry resources below. We link out so you can verify any specific claim or go deeper.
