Case Study

$5,125,000 Drilling Rig Financing in Colorado

Unlocking Capital for Used Oil & Gas Equipment

Discuss Your Project

Industry Oil & Gas

Funding Amount $5,125,000

Term 60 Months

Financing Solution Financing solution tailored to the realities of the transaction.

Project Overview

A Colorado-based gas company acquired five used “workover” drilling rigs at auction to support ongoing field operations. However, due to both industry-related lender bias and the equipment’s age, traditional banks refused to finance the transaction.

Commercial Funding Partners secured $5,125,000 in financing with a 60-month lease, enabling the company to move forward and strengthen its financial position.

The Challenge

The transaction presented multiple barriers that eliminated traditional lending options.

The rigs varied significantly in age—some as old as 25 years—creating concerns around collateral value and longevity. Combined with lender hesitation toward the oil and gas sector, the deal was viewed as too risky by conventional institutions.

Key challenges included:

1. Strong lender bias against the oil & gas industry 2. Used equipment with a wide age range (5 to 25 years old) 3. Auction-based purchase structure 4. No traditional bank is willing to accept aging equipment as collateral 5. Need for a 60-month lease to align with operational cash flow

The CFP Solution

Commercial Funding Partners structured a financing solution tailored to the realities of the transaction.

We secured $5,125,000 in funding through a 60-month lease, allowing the company to finance the rigs despite their age and the industry’s lending challenges.

The structure was designed to:

1. Finance older, used oil & gas equipment 2. Accommodate auction-based acquisitions 3. Work around traditional lender restrictions 4. Improve the company’s cash flow and financial flexibility

Results

With financing in place, the company successfully acquired the rigs and enhanced its operational capabilities.

Results included:

60-month lease executed

Acquisition of five workover drilling rigs

Improved liquidity and working capital position

Successful closing despite significant industry and asset challenges

Why It Matters

Not all equipment fits traditional lending standards.

Older assets, auction purchases, and industries facing lender resistance often require specialized financing solutions. This transaction demonstrates how the right partner can unlock capital and turn overlooked opportunities into operational advantages.