Equipment repossession occurs when equipment purchased through a loan or used as collateral is taken by a lender due to defaulted payments. Recovery can involve a wide variety of items and machinery, and may require special skills and equipment. Foreclosure of equipment can devastate a business, but salvaged equipment can be purchased at prices below market value. Equipment recovery is also known as equipment salvage and laws vary between jurisdictions.
Equipment repossession is the term used when equipment, which was purchased through a loan or used as collateral, is taken by a lender due to defaulted loan payments. Vehicle and equipment recovery are quite similar in concept. Since an individual or business does not fully own that equipment until all loans and liens are satisfied, repossession of the equipment is a real threat if payments are not kept up-to-date.
Some of the items seized during the equipment recall are various types of industrial tools, tools, machinery and industrial vehicles. Of the many types of items subject to foreclosure, equipment repossession can involve a wide variety of items and machinery. This includes owning a bulldozer, an MRI machine, or a desktop computer. Any equipment that has borrowed to purchase, is leased from a business, or has been used to secure a loan may be repossessed if payments for the equipment or a loan are not kept current.
Companies and individuals who specialize in equipment recovery sometimes require special skills and equipment to disable equipment prior to recovery. For example, a company that specializes in equipment recovery may hire an electrician to take certain machinery out of action, or might employ someone who knows how to operate a forklift to remove it from a company’s premises during recovery. This is necessary in order not to damage the equipment and make it useless after recovery.
Equipment recovery can quickly devastate a business. This most often happens to companies that are already experiencing financial difficulties. Foreclosure of any type of equipment not only brings inconvenience, but if the equipment is critical to running a business, it can cause immediate closure of a business.
Reclaiming the equipment, however, is beneficial to others who are running similar businesses or who hope to do so in the future. These individuals are often able to purchase salvaged equipment at prices well below market value. This is because the lenders have no real interest in keeping the equipment and attempt to recoup the loss by selling the salvaged equipment. In order to facilitate a quick sale, lenders often price the equipment for less than it is actually worth.
Equipment recovery is also sometimes referred to as equipment salvage. While recovery can be performed by a single individual, it is typically performed by a professional or team of individuals trained in equipment recovery. Regardless of the name used or who actually performs a recovery, laws regarding vehicle and equipment recovery vary between jurisdictions.
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