Heavy equipment are usually expensive materials and not many can afford to buy them by paying hard cash. The small contractors or small construction companies usually find it very difficult to arrange money to buy equipment but if they have no other option they approach a bank or some financial institution that lends them the money to buy the stuff. Now that they have possessed the machine, the next difficult task for them is to keep on with the monthly payments and any defaults with the payments may cost them the machine. Well, the loan system works this way. You borrow money from the lender and promise to pay the entire sum along with interest at regular intervals. Till the time you do not clear off the debt, the lender holds lien on the equipment. This means that if you fail to pay money to the bank, then it has complete right and authority to take possession of your equipment.
This really sounds harsh but people all across the United States have to go through this phase in some or the other time in their lives. Having said that, no lender ever wants to repo heavy equipment and they use this as the last resort. Lenders simply want their money back with the interest amount that the borrower has committed to pay. Just in case, if they find the borrower is unable to pay the installments they try to establish contact with the borrower to check if he is going through any financial turbulence. They try to sort things out with the borrower and if they find that he is unable or just unwilling to pay then they go for the repo; which means they send the guys to tow the machine from the borrower’s place so that it can be sold a dirt cheap price to someone else and in this process they can get their money back.
The process is quite simple. If the borrower is unable or unwilling to pay the loan, the lender brings the repo guys in the picture and then they got everything to do from there. They will track the item give the notice to the borrower where it will clearly state that they are taking away the machine since he was not able to pay the debts in time and after repeated reminders when he failed to show up with the money, the lender which has the first lien on the item is finally forced to take it back. The repo guys get some money based on the kind of stuff they would be towing. For instance, if they tow heavy equipment, then they get their fee based on the weight of the machine.
Before the repo guys can tow the machine, they got to be careful that they are towing the right equipment and not the one that belongs to somebody else’s. They need to check the Serial Number and accordingly tow the machine. They also need to inform the local police so that if the owner of the machine gives a call to the police, the authorities could explain him the matter. Once they repo the equipment, they keep the stuff in their storage facility or simply hand it over to their clients.