Fixture Furniture and Equipment (FF&E) Financing

Fixture furniture and equipment financing is more commonly referred to as FF&E. Loans for office furnishings including desks, chairs, sofas, computers, telephone systems and other technologies can all be financed under the FF&E umbrella. Whether your expanding your business and need to furnish another office or giving your current office a new look and feel, finding the money you want to get it done can be challenging.

The Problem: Lenders heavily discount FF&E as collateral. Technology is essentially worthless collateral for the bank. Used equipment will be discounted by a minimum of 50% and sometimes more if it is old or difficult to resale. New equipment could be valued up to 70% of it’s value for collateral purposes. These values will differ greatly among lenders. Some lenders will not even be interested in doing a loan for FF&E.

The Answer: A lender will want to have 100% collateral for your loan. That means if a lender only gives you 60% collateral value for the new equipment you will have a gap of 40% to make up elsewhere. You can have the additional 40% in cash as a down payment to help your lender get comfortable with the loan. If cash is not an option then equity in other unencumbered assets may be provided as collateral to make up the difference. (Remember that most every loan request will require some cash down.)

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