Leased Business Equipment Repo

[rebuilt]

Hey Guys,

Still no luck on my other question, I have posted twice, but hopefully this one gets a response. Much appreciated in advance for any input you can give.

I was wondering if any of you have experience with equipment leased (secured debt) in a store or business, and what has happened if / when you stopped making payments on it. Is it a long process for repo, like a foreclosure, is it fast? In this economy, have you noticed they are willing to work with you a little to not have to take back items they will need to sell cheap since it isn't worth much anymore?

Also, as personal guarantors, will they worry about getting their equipment first, then sue you, or do it all at once?

My other question is in the business forum about selling assets (different business, to a family member who had loaned money to start the business). It is pretty high up in the small business forum, so if anyone gets a chance to take a look, I'd really like your opinions.

Thanks again for your time.

[justbeach03]

Depends on the creditor and the assets that are secured, and if they can be sold. I had one euipment creditor that picked up in 60 days and a creditor for products that had no interest in picking up the products and just wanted to fall back on me as the personal guarentee. If you are trying to drag it out...most will work with you or negotiate...they don't want the stuff back and will only get pennies on the dollar, then they'll still come after you as the PG for the difference.

[frogger]

Depends on the creditor and the assets that are secured, and if they can be sold. I had one euipment creditor that picked up in 60 days and a creditor for products that had no interest in picking up the products and just wanted to fall back on me as the personal guarentee. If you are trying to drag it out...most will work with you or negotiate...they don't want the stuff back and will only get pennies on the dollar, then they'll still come after you as the PG for the difference.

Good answer.

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Thanks. Funny thing is the guy who helped me set up the lease, left the company along with my former rep, and emailed me today, as sometimes I feed him leads. Since he was no longer with the company, I figured I could ask him some hypotheticals. He basically stated the same. I have had an excellent payment history, could probably get a deferrment or lowered payment for a period of time, then after that if I default, it would still take some time for them to go through the motions to get the equipment (which is in an industry that is taking a beating right now, and I suspect many will be in the same situation), then they would go after me personally. Said the process from beginning to end could be about a year.

Any other thoughts or experiences would be most appreciated.

[justasking]

I don't have a lot of experience with this, but I would say if your industry is taking a hit right now ... any payment from you is better than having to work out a repo or legal action on a PG ... even it if was only a couple hundred bucks.

If you can try to pay them something and drag this out, the better. Has the busienss closed? (sorry, you don't say that here) Or are you just behind on payments right now?

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Business hasn't closed, and actually just missed our first equipment lease payment about a week ago, to preserve capital for obligations like payroll, taxes, etc. It is a seasonal business, and will improve significantly in September. The leasing company called, and I told them I am not in a position to make the payment now, and they see I contacted them back in May expressing this may be an issue around this time. They want me to touch base with their modification department, and then they are going to call me back next week.

This is so scary. I've never missed any type of payment, business or personal. When I start to think of all the various little creditors I will need to list if the time comes, it is daunting, and I am nervous about forgetting some, and getting hit by them later.

I am just trying to stay afloat, but I feel so overwhelmed.

[justasking]

I understand the fear and the emotions of missing a payment. But it sounds like they are willing to work with you and that is a great start.

Frankly, perserving your cash for payroll and taxes is the right thing to do. And even they know that.

I've been dealing with a bank loan not being renewed since last November and we are still working on it!!! It's made the stress levels shoot thru the roof, but guess what? The bank now seems to understand we are willing to do a Chapter 11 if need be and is starting to prep an offer. Finally!!

Just don't let your fears get in the way of running your business and do what you can, one step at a time. This is your reality and yeah, it's a crappy place to be right now but you are still in a lot better position than a lot of others. When I get overwhelmed, I just start listing all the things I am grateful for ... and running water is always at the top of the list.

You'll make it ... just hang in there and build your support system. And remember, even a small payment is better than none at all -- so try to figure out if there is anything small you can do until the biz gets back on its feet.

[rebuilt]

Thanks for the advice Just Asking, we'll be able to send something towards payments for sure, it's just several businesses. And I feel like if one fails, they are all going to start going down. And I just feel so out of control, because it is all so intertwined.

[justasking]

Yep, I hear you. My hubby and I own more than one too. But they are completely different legal businesses, so we work hard to keep them that way.

Worry about the things you can control, do the best you can and then let it go ... otherwise, you'll create a self-fulfilling prophecy and it will all get out of control.

The best thing you can do for your biz's right now is stay mentally sharp and don't let the fears get in the way. Deal with reality the best you can and then let it go and take care of yourself.

Best of luck, with lots of hard work thrown in :-)

[rebuilt]

As much as you keep them separate, if each one has a personal guarantee here or there, they have the chance to bring the others down. There are a couple I don't mind going down, but I am nervous that their failure will force the failure of the good one(s).

I just have so much on my plate, becasue when I got involved in all of this, money was flowing and I had help. Administratively, hands-on, etc. and now I don't, so I have to wear like 6 different hats everyday, and I am just not sure mentally how long I can hold on. Especially with the addition of a separation from my spouse occuring at the same time, and her involvement in one of the businesses.

It's just a perfect storm over me, and the depression completely takes me over some days, to where I feel immobile.

Sorry, just can't afford the therapist every week.

[justasking]

OK I am going to give you some advice I wouldn't normally share here. LOL

I want you to check out The Work by Byron Katie --- who lived with depression for YEARS. The Work at www.thework.com is a great way to deal with the realities of your life -- it is what it is and you learn to deal with it instead of the fears or the woulda / coulda / shoulda's.

From her website: The Work of Byron Katie is a way of identifying and questioning the thoughts that cause all the fear and suffering in the world.

I highly recommend it :-)

[rebuilt]

Thank you. Any help is appreciated, as just visiting here all day long, as informational and supportive as it is for the situation we are all in, is still a constant reminder of my fears.

[justasking]

Well, bud, at some point you've got to figure out how to get beyond the fears or they are going to paralyze you.

I find this place a comfort, not a bad reminder ... it's all in the way you look at things.

Best of luck...

[rebuilt]

I do look at it like a comfort. I just have so much tugging at my emotions. Fears of disappointing people, spouse, partners, customers, family who won't be paid back, what would I do next.

Right now, dealing with a separation, parternship in businesses with long time friends (who are in the same financial situation I am, but I still feel guilty, or scared about the friendship falling apart if the business does, etc.)

I think the fears will subside if I can just get to the point where I know what is going to happen, and then make the appropriate decisions. This uncertainty about all of the situations is just consumes me.

[justasking]

If you are looking for certainly to make your fears go away ... it's not going to happen.

Unless you want to have your fears ensure that you'll fail and go down like a house of cards ... and dude, you don't want that.

Stop thinking that the known will bring you comfort. Deal with what you have now, every day as best you can and just keep moving forward.

And you DO know your reality RIGHT NOW. That's all we ever get to know ... no one gets to know what tomorrow will bring. So stop wishing for an impossibility as if that is the thing that is going to save you. It's not ... you are going to save you.