Equipment repossession is the term used when equipment, which has been purchased by a loan or used as collateral, is taken by a lender due to defaulted loan payments. Vehicle and equipment repossession are quite similar in concept. Since an individual or a business does not fully own said equipment until all loans and liens are satisfied, equipment repossession is a real threat if payments are not kept current.
Some of the items seized during equipment repossession are various types of industrial gear, tools, machinery and industrial vehicles. Among the many types of items subject to repossession, equipment repossession may involve a wide variety of items and machinery. This includes repossessing a bulldozer, a magnetic resonance machine or a desktop computer. Any equipment that required a loan to purchase, that is leased from a company or that has been used to secure a loan may be repossessed if payments for the equipment or a loan are not kept current.
Businesses and individuals who specialize in the repossession of equipment sometimes require special skills and equipment useful in disabling equipment before repossession. For instance, a company specializing in the repossession of equipment may employ an electrician to disable certain machinery or may employ someone who knows how to drive a fork lift to remove it from a business’ premises during repossession. This is necessary so as to not damage equipment and render it useless after the repossession.
The repossession of equipment can quickly devastate a business. Most often it happens to businesses that are already experiencing financial difficulties. Equipment repossession of any sort not only brings inconvenience, but if the equipment is primary to the running of a business, it can immediately cause a business to shut down.
Repossession of equipment, however, is of benefit to others who run similar businesses or who hope to do so in the future. These individuals are often able to buy repossessed equipment at prices far lower than the market’s value. This is because lenders do not have a real interest in keeping the equipment and attempt to recoup their loss by selling repossessed equipment. In order to facilitate a fast sale, lenders will often price equipment lower than what it is actually worth.
Equipment repossession is also sometimes referred to as equipment recovery. Although recovery can be performed by a single individual, it is typically done by a professional person or team of individuals trained in the repossession of equipment. Regardless of the name used or who actually performs a recovery, laws regarding vehicle and equipment repossession vary among jurisdictions.