You’re behind on several equipment repayments.

Three machines carry three different default positions

An earthmoving contractor is behind on a truck, an excavator and a loader financed through different lenders. The truck is needed tomorrow; the loader has barely worked this month. The owner sends the same small payment to each lender, hoping that equal treatment will keep everything available, without checking the default notices or the machines’ actual earning contribution.

Create a facility and asset schedule

Record each agreement, borrower, asset identifier, arrears, current payment and notice date. Distinguish leases, hire purchase and other secured finance with professional help where needed. Include guarantees and cross-security provisions for review.

Do not assume that keeping one account current protects another. The documents determine the relationship between facilities, and each lender may be at a different enforcement stage.

Measure each machine’s contribution

Compare recent income attributable to the asset with fuel, operators, maintenance, transport and finance costs. Identify booked work that genuinely requires it and available alternatives.

A valuable machine can still consume cash. Check idle time and repair requirements rather than using purchase price or the owner’s attachment to the equipment as the measure of necessity.

Discuss options before surrender or sale

Request current payout figures and ask lenders about possible variations or agreed disposal processes. Have the terms and consequences reviewed before acting. Returning equipment should not be assumed to eliminate a shortfall.

Do not sell, relocate or transfer financed equipment to frustrate a lender. Confirm ownership, consent and required treatment of proceeds before any transaction.

Assess the fleet as one business decision

Update the cash forecast for the options under consideration: retain, replace, hire or dispose by agreement. Include downtime and remaining work commitments. The forecast should show the operation after the change, not just a smaller instalment.

ASIC identifies loan defaults as a warning sign. Seek advice on company solvency when several facilities are overdue, rather than negotiating each asset in isolation.

Source: ASIC — Insolvency for directors

Review each asset before making another payment

Match each asset to its agreement and current notice.

Calculate contribution after operating and finance costs.

Get advice before varying, selling or surrendering equipment.

Call CRP today to coordinate a review of fleet debt and sustainable operations.