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Conduct a financial audit! We identify the 7 warning signs that indicate your current Equipment Loan Rate is uncompetitive, explaining how refinancing can capture current market rates and immediately reduce your monthly payments.
7 Warning Signs Your Current Equipment Loan Rate is Too High (and How NLCG Can Lower It)
In the competitive landscape of small and mid-sized businesses, every basis point on an Equipment Loan Rate matters. A high interest rate doesn't just increase your monthly payment; it erodes the profitability of the asset you financed and restricts your ability to grow. Many businesses accept their current rate without realizing they are overpaying.
By conducting an objective financial audit, you can identify clear warning signs that indicate you deserve—and can qualify for—a better rate. Here are the seven most critical signs your current financing is costing you too much, along with the NLCG solutions.
If your credit score (FICO) has climbed 50 points or more since you secured your last Used Equipment Financing deal, you are almost certainly paying too much. Lenders base risk on the score at the time of application. If you never refinanced, you are stuck paying for risk that no longer exists.
Dealership financing is convenient but rarely competitive. Their primary goal is to move inventory, not to secure the lowest possible cost of capital for your business. Their rates often include hidden points or fees that drive the final rate higher than specialized finance brokers like NLCG offer.
While a fast approval is great, an ultra-streamlined, "no-document" loan almost always signals a higher interest rate premium. Lenders charge more for loans where the financial health of the business is not fully verified, offsetting their risk by inflating your cost.
All commercial rates are tied to the Federal Reserve’s movements. Commercial bank interest rates are tracked meticulously by data sources like the Federal Reserve Economic Data (FRED). If the prime rate has fallen but your current lender won't discuss refinancing, your rate is now uncompetitive relative to the market.
A balloon payment at the end of the term is a major red flag, often indicating that the lender structured a lower monthly payment by deferring a large, high-risk chunk of the principal. This structure locks you into their services for refinancing, often at another high rate.
A general bank may not properly value a specialized asset like a Dozer or F-550 Truck. Internal NLCG Analysis shows that lenders who specialize in heavy equipment have a higher confidence in the asset's residual value, allowing them to offer tighter, more favorable spreads than non-specialist lenders.
If you accepted the first offer you received, you have no baseline for comparison. NLCG Financial Specialists shop your application across a network of lenders, ensuring you receive a range of competitive options, maximizing the chance of securing the best rate possible.
If you identify with three or more of these signs, it is time for a refinancing audit. Refinancing an Equipment Loan can lock in a lower interest rate, reduce your monthly payment, and free up capital for other investments. We can often execute a refinance deal in less time than it took your original bank to approve the first loan.
