Financing a chipper bought from an individual, not a dealer

The situation

A tree surgery business found the machine it wanted — a GreenMech EVO 165D, a 165mm road-tow chipper with a 25hp Kubota diesel engine. What it did not find was a dealer selling one. The machine was unused stock in the hands of a private individual.

The challenge

A lender funding a dealer purchase is dealing with a VAT-registered business, an invoice it recognises and a counterparty it can chase. A private sale offers none of that. The lender has to satisfy itself that the seller genuinely owns the machine, that there is no outstanding finance registered against it, that the price is sensible for the specification, and that the money reaches the right person. Some lenders will not write that business at all.

There was a second wrinkle. The machine was new but had never been in service — stock the seller was moving on rather than a used machine with a working history. Good for the buyer, but “new” and “private seller” do not normally appear on the same proposal, and an underwriter seeing it for the first time will ask why.

• Buy from a dealer instead — simpler to fund, but the machine the business actually wanted was the one in front of it.
• Pay cash — would have taken the full purchase price out of working capital for an asset that earns over years.
• CW Asset Finance route — go to the lenders who write private sales properly, and evidence the sale to their standard.

What we did

We approached four lenders and two came back with an offer, so the private sale narrowed the field without closing it. The business contributed £4,000 against a purchase of just over £18,000 and took the balance over five years. On a private sale a deposit of that proportion does more than reduce the monthly figure — it demonstrates commitment on an asset the lender cannot value through a dealer invoice.

Key outcome

Six days from opening the file to the seller being paid, which for a private sale is quick. The business got the machine it had actually chosen rather than the nearest equivalent on a forecourt.

“If you have found the right machine privately, finance is not off the table — but expect it to need more evidence, expect fewer lenders to be interested, and expect to put something in. Speak to a broker before you commit to the seller, not after. The checks a lender runs on a private sale are the same checks that stop you buying a machine with somebody else’s finance attached to it.”

— Conor, CW Asset Finance

Every application is assessed on its own merits and all finance is subject to status and lender approval. This is one client’s outcome and is not a guide to what any other business will be offered.