How Auction Financing Works

Posted 06.25.2012

Tweet about this on TwitterShare on FacebookPin on PinterestShare on LinkedInShare on Google+

If you’re working at a large construction firm, are an owner/operator, or work at a natural resource company, chances are you will find yourself at a heavy equipment auction looking for a specific piece of equipment. Don’t let opportunities like a good deal on a machine that costs slightly more than your budget, pass you by at the auction. If you get pre-approved for financing prior to the auction, you can bid on what makes sense for your business rather than what fits within a strict budget.

When you show up at the auction, you need to register with the front desk and they will give you a bidder number and a piece of paper with that number on it. You then use that number to make your bid. If you succeed with your bid you then go back to the front desk and let them know how you will be paying for the equipment. If you have a credit approval with Patron West, you can then advise the auction assistant that Patron West will be contacting them for invoicing instructions.

Once you are finished buying, Patron West will email or courier you the finance documents to sign. Once the documents are returned with proper insurance, you will be able to pick up the equipment. This takes an average of between 3-7 business days. The only way you can leave an auction with the equipment is to pay for it in certified funds that day. If you have the cash to do this, Patron West can lend the money back to you – no problem.

Getting Auction Financing Pre-Approved

Give Patron West a call as far in advance of the auction as possible and we’ll get you set up with the financing you need. If you get down to a few days before the auction, give us a call anyway to see what we can do. We’re used to working on tight deadlines in the construction industry so we may be able to help you out even if you call us right before the auction.

Many auction houses offer in-house financing, however if you decide not to purchase and continue shopping after the auction, credit approval will not move with you. When you are pre-approved with Patron West, the credit stays with you regardless of where you want to buy. This saves you time and there will be fewer lenders looking at your credit. Patron West operates much like a mortgage or insurance broker and shops around for the best financing deals for your business. It may be access to lower cost capital or simply a payment structure that works better for your cash flow, regardless of the circumstance Patron West financing will have a positive effect on your bottom line.

Finding Heavy Equipment Auctions in Canada

Heavy equipment auctions are easy to find in Canada. One of the largest international auction houses, Ritchie Brothers, lists upcoming auctions on the home page of its website. Upcoming auctions are taking place in Chilliwack, BC and numerous cities in Alberta, including Peace River, Edmonton, and Manning. They also list their auctions in countries around the world, including the US if you want to do a little cross-border shopping. Patron West finances U.S. purchases of heavy equipment as well, so pre-approval won’t be a problem if you choose to shop over the border.

Hodgins Auctioneers is another Canadian auction company, as is Calgary’s Canadian Public Auction, and Michener Allen Auctions.

Online Heavy Equipment Auctions

If you are in a very remote area or don’t  have the time to attend a heavy equipment auction, you can usually find what you are looking for online. Ritchie Brothers allows you to bid on any of its heavy equipment auctions online. Ritchie and others will also let you place a proxy bid, which lets the auction house bid for you until the price reaches a cap that you’ve stated you will not go over.

Researching Equipment Prior to the Auction

Some auction companies supply inspection reports on equipment they’re auctioning off. If you are concerned about a particular maintenance issue that’s a known problem with a certain make and model, call or email the auction house in advance to see if you can get more details on the equipment.

If you’d like to find out more about pre-auction financing, give Patron West a call and we’ll be happy to answer your questions.

< Previous Next >
< Back To All