North Mill Equipment Finance, an independent commercial equipment lessor providing small ticket financing through its network of referral agents, restructured its working capital solution. The financing arrangement, called “Cash Out,” allows customers to borrow the equity of paid-up business equipment and channel the proceeds back into the company. Although similar in concept to a sale leaseback, this arrangement is structured as a loan.

“There are many ways a company can obtain working capital,” Paul Cheslock, vice president of customer relations at North Mill Equipment Finance, said. “Some of the more common include a merchant cash advance, a revolving line of credit and accounts receivable factoring. And while they all fill the same need, they are not created equal. Cash Out in particular offers a long list of customer benefits, including better rates, monthly versus weekly payments and terms up to 60 months. It’s a powerful tool for our referral agent partners looking to grow their customer base.”

According to Cheslock, the product’s loan-to-value ratio was restructured to enable customers to borrow a larger percentage of equity from an unencumbered asset. North Mill’s Cash Out offering includes an early pay-off feature. Customers can pay off a loan without premium or penalty after 18 consecutive, on-time payments.

“The product is simple and straightforward. There are no fees tied to accounts receivable, invoices or credit card sales,” Cheslock said. “What’s more, the equipment that’s used for the loan stays put on site, so business operations remain uninterrupted. And if that were not enough, the borrower retains title.”