Case Study

$5,125,000 Drilling Rig Financing in Colorado

Unlocking Capital for Used Oil & Gas Equipment

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Unlocking Capital for Used Oil & Gas Equipment

Primary Detail

Investor Profile

Main Constraint

The transaction presented multiple barriers that eliminated traditional lending options.

1. Investor Profile

Unlocking Capital for Used Oil & Gas Equipment

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.

2. 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:

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

3. 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.

4. The structure was designed to:

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

5. The Result

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

Results included:

• $5,125,000 funded
• 60-month lease executed
• Acquisition of five workover drilling rigs
• Improved liquidity and working capital position
• Successful closing despite significant industry and asset challenges

6. Why This Transaction 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.

7. Need Financing for Used or Specialized Equipment?

Disclosure: This case study is anonymized unless CFP has approved a specific public descriptor. Customer names and non-approved identifying details are withheld. Financing availability, structure, timing, and terms depend on borrower qualifications, collateral, documentation, and final underwriting.