Hard equipment In underwriting

Tractors, excavators and CNC machines, valued by the hour, not by the year.

Agricultural and construction equipment and machine tools appraised per unit, monitored from the telematics reports you send, and placed with equipment lenders who already lend on iron. Pre-qualification accepted now. This page will split into agriculture and construction as each gets its own lender and residual curve.

The lender sets the advance, rate and term after the appraisal. Your report shows an indicative range. Pre-qualification takes longer while this class is in underwriting.

What qualifies as collateral

Eligible, and not. Stated before you send a serial list.

Eligible

Tractors and combines

100 hp and up, from major OEMs, ten years old or newer.

Excavators, loaders, dozers

Under 8,000 hours, with service history.

CNC machining centres and lathes

With a controller that records spindle hours and alarms.

Serials on file

Every unit with a serial or PIN, an invoice and a yard or plant location.

A telematics report you can export

From an OEM portal such as JDLink, VisionLink or Komtrax, or from a retrofit tracker.

Not eligible

Attachments and implements alone

Buckets, headers and tooling are valued with the machine.

Salvage title or branded frame

No resale market for a rebuilt machine.

Equipment under an operating lease

Title sits with the lessor.

Small plant under $25,000 per unit

The monitoring cost does not pay for itself.

Machines without a controller clock

Older CNC without hour or alarm records.

How we appraise it

Orderly liquidation value, per unit, every quarter.

We appraise at orderly liquidation value per unit, from auction results, dealer used listings and OEM certified pre-owned prices for the same model, hours and year. For iron, hours and service history move the value more than age. For CNC, controller generation and spindle hours do.

Hard equipment has the deepest resale market of the four classes. Auction houses publish results weekly. The residual curve for CNC is thinner, and we say so.

Per unit readout

Illustrative

Orderly liquidation value$94,000
Market, dealer ask$108,000
Lender floor$71,000

Illustrative. 20 tonne excavator, four years, 4,200 hours. Not a quote.

What we monitor

What we monitor, and what you send each month.

The telematics unit your OEM fitted already records hours and location. You export the report from the OEM portal each month, and we check it against the covenants and report to the lender. A lender with a monthly record of the machine at the registered site knows more than one waiting for the annual audit.

Engine hours

Utilisation and wear per unit, checked against the residual curve.

GPS location

The machine is at a registered yard, farm or site.

Service log

Scheduled service done on time. A missed service is a value event.

Fault codes

Early sign of a machine that will need a rebuild.

Fuel burn and idle ratio

A machine idling is a machine not earning.

Spindle hours and alarms, CNC

The controller's own record of use.

What a breach does

A machine leaves its registered area, a service is missed by more than the grace period, or a machine is missing from the monthly report. You and the lender get the same notice, the same day. Then a cure period: move it back, book the service, or substitute an eligible unit. If it is not cured, the borrowing base is recomputed on the remaining units. It is designed to end in a partial paydown, not a default.

The closing docket

Every document, one room, versioned.

The first six documents are the GPU set. The equipment specific items are being written.

Borrowing base certificate

Eligible units, OLV, advance, facility. Recomputed every quarter.

Compliance certificate

Covenant status from the telematics reports, signed by you each month.

Insurance certificate request

Sent to your broker. Lender named as loss payee on the equipment floater.

Serial list

Model, serial or PIN, hours at close, location, invoice date.

ACORD 25

Certificate of liability insurance, returned by your broker.

Lien search

UCC search in your state of organisation before filing.

Telematics report

The 12 month export from the OEM portal at close, then one each month.

Hours and service schedule

Hour meter reading and last service per unit at close.

Title or registration

For titled or road registered units, where the state requires it.

Sample appraisal summary

Appraisal summary

Illustrative
Collateral12 excavators, 6 wheel loaders
Appraised OLV$1,540,000
ConditionHours and service history on file
Lien searchUCC search in your state of organisation
MonitoringLocation, service, hours, revaluation every quarter

Illustrative. No equipment loan has closed yet. The lender sets the advance, rate, term and fees.

Intelligence for this class

The risk profile a lender reads first.

Risk profiles for agriculture, construction and machine tools are in preparation at Safewaterline Intelligence: resale values by model and hours, residual curves and lien activity. Each profile is published before its first loan closes, because the profile is what brings the lender.

In underwriting

What is still open for this class.

Eligibility rules are set. Five of the six fields a class needs before it goes live are still open, and the class will split in two when they close. A class goes live when all six are filled: eligibility, residual curve, monitoring source, docket set, risk profile, and a lender in the network. Until then, pre-qualification runs at the longer turnaround.

Residual curve

Deep for iron, from weekly auction results. Thin for CNC.

Monitoring source

Telematics reports the borrower exports from the OEM portal.

Docket set

Six GPU documents plus three equipment specific items, being written.

Risk profile

In preparation at Intelligence, one per sub class.

Lender in network

Being arranged.

Questions
Why one page for tractors, excavators and CNC?

Because the method is the same: hours, location, service, resale prices. The lenders and the residual curves differ, so this page splits into agriculture and construction, and later machine tools, as each gets its own lender in the network.

We already have a dealer finance line.

Most dealer finance is on specific units. Lenders in the network can lend on the units you own outright, or refinance the dealer line if the hours and resale prices support it.

Our machines move between sites every week.

Normal. You register the working area, not a single address. The covenant is the area, and you tell us when a machine goes outside it.

What if we do not have OEM telematics?

A retrofit tracker, fitted in an afternoon, gives hours and location, and you send its report each month. Service log comes from your maintenance system or a monthly upload.

How long does pre-qualification take while you are in underwriting?

Longer than for GPUs, because the class is still in underwriting. You get the appraisal report and an indicative range. The open fields on this page say what is still being built.

Hard equipment

Send the serial list. The appraisal report is yours either way.

Pre-qualification takes longer while this class is in underwriting. Nothing is owed until a loan closes.