Many businesses will look to acquire equipment via private sales. When it comes to purchasing equipment privately, there is more to the process than making sure you’re getting the machine that meets your needs. People will do inspections and safeties and other things to make sure the machine is functional, but many people forget to do their homework to make sure there are no liens or encumbrances registered on the equipment.
You can’t just take the seller’s word that there are no liens. Sometimes the seller is aware and sometime the seller is unaware there are liens on the equipment. If you purchase a piece of equipment that has liens on it you will adopt those liens once the equipment is in your possession.
When you purchase any kind of equipment privately you should always do a lien search. It is inexpensive and easy to do. One website that can help with this is www.ppsa.ca. Another thing people often forget to do is use the service of Carfax (www.carfax.ca). Carfax will allow you to see the vehicle’s history by entering the vehicle’s VIN (vehicle identification number). Both of these steps are fast and easy to do and it could save you money and unforeseen headaches.
A lien can come in many forms. It can be a mechanics lien form a previous repair on the equipment. The seller could have a judgement registered against the equipment. The seller’s bank may have a general security agreement (GSA) registered against the equipment. Basically with a GSA the seller is unable to sell the equipment without his bank’s permission. They are just a few examples that could come back to haunt you.
Its like if you purchased a house without doing a property search. If there were unpaid property taxes on the property and you purchased the property without doing a search on the property you would adopt the unpaid tax bill – NOT fun.
One of DEROTTO’s specialties is helping business finance used equipment via private sales and you can rest assured that DEROTTO will do all the necessary searches to make sure the equipment is free and clear of all liens and encumbrances.