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Your Complete Guide to Heavy Equipment Financing and Loans

  • Apply in under 2 minutes
  • Get funds as fast as 24 hours

Loan Amount

Up to $500,000

Estimated Repayment Terms

1-5 Years

Interest Rate

Starting at 7%

Speed of Funding

As fast as 1 day

    Looking to buy or lease a new or pre-owned machine? We’ll walk you through lender requirements, funding options and financing rates so you can get heavy equipment financing that meets your needs.

    How Will You Use Construction and Heavy Equipment Financing? 

    Whether you’re getting ready to acquire construction equipment, industrial machinery or farming devices, we’ll provide you with the information you need to secure your heavy equipment financing. 

    Here are a few instances where you might consider equipment financing:

    Upgrade Equipment

    Is your equipment rusting out? Has it seen better days?

    If you can’t remember when you bought your equipment, it might be time for an upgrade. Invest in your hardware and get the tools you need to complete the job to the best of your ability.

    Get Project-Specific Equipment

    Need specific gear (or several pieces of machinery) for a specific project?  If so, you might consider equipment financing to lease or buy the machinery you need to get the job done.

    Buy Construction Vehicles

    Heavy equipment financing also applies to vehicles you may need for your business, including: 

    • Bulldozers
    • Concrete mixers
    • Cranes
    • Dump trucks
    • Excavators
    • Flatbed trucks
    • Forklifts 
    • Pipelayers
    • Road rollers
    • Rotary drills
    • Tractors
    • Utility vehicles

    Best Financing and Loan Options for Heavy Equipment

    According to the Census Bureau, spending in the U.S. construction industry was estimated at a seasonally adjusted rate of about $1.33 trillion during December 2019. 

    The takeaway? At some point or another, you’ll likely need a new piece of equipment, along with some form of financing. 

    Here are a few financing options worth considering.

    Equipment Financing

    Conventional heavy equipment financing is available for both loans as well leases. For loans, the acquired equipment serves as collateral for the amount you borrow. What does this mean? If you fall behind on payments and can’t catch up, the lender can take the equipment to recoup losses. Because these lenders can minimize their risk, construction equipment financing often is considered less of a risk for lenders.

    It’s important to note that leasing is different from renting. For starters, leasing typically requires longer terms than renting. Leasing terms also typically are binding, meaning you can’t turn in the equipment early without being penalized. In contrast, you could rent equipment for a day, a week or a month at a time.

    You might consider buying purchasing equipment through a loan if:

    • You intend to use the equipment longer than a lease term
    • The equipment has good resale value
    • You can afford equipment maintenance and repairs

     You might consider getting equipment from a leasing company if you: 

    • Like the idea of trading up for a newer model at the end of your lease term
    • Want to avoid a down payment
    • Are interested in having an equipment maintenance service contract 

    Repayment terms for heavy equipment financing typically won’t exceed its useful life. As such, financing can range from 1 year to 5 years, though shorter and longer terms may be available. 

    Depending on your creditworthiness, you may be able to finance up to 100% of the price of the equipment you want, though a down payment of up to 20% may be required, depending on the lender.

    While some conventional banks may advertise equipment rates “as low as” X%, it’s important to note the fine print. It typically stipulates the final rate you’re quoted is determined based on your credit history. An advertised rate of 4.75%, for instance, may not be your final rate. Origination fees may also apply, typically a percentage of the total loan amount. 

    With alternative lenders, you may find that heavy equipment financing rates start around 8% and go up depending on factors such as credit score, loan type and loan amount.

    Equipment Financing Benefits

    Wondering about the benefits of this type of financing? Because equipment loans typically require the equipment you’re buying to serve as collateral, this type of financing is often easier to qualify for when compared with other small business loans. As such, there may also be less paperwork involved in the application process.

    Although you should check with your accountant or financial adviser, the equipment you purchase or lease with heavy equipment financing could be tax-deductible. What’s more, by using financing instead of your business’s cash reserves to buy or lease equipment, your working capital is still available for other purposes. 


    SBA Loans

    Loans guaranteed by the Small Business Administration (SBA) offer some of the most competitive interest rates and repayment terms, though the process can be lengthy. If you’ve been denied a conventional bank loan and aren’t in a rush for funding, consider an SBA loan. The qualifications are typically less challenging. 

    With these kinds of loans, the SBA guarantees a certain percentage of each loan, up to 85% in some cases. The maximum repayment term for SBA loans used for equipment or working capital is 10 years.

    Popular types of SBA financing options include:

    SBA Express Loans

    SBA Express loans offer the fastest funding option of all SBA-backed loans. You could be approved for up to $350,000 in as few as 36 hours and funded in 7 days after approval. The maximum interest rate you can be charged for an SBA Express loan is the prime rate plus 6.5% for loans of $50,000 or less and prime plus 4.5% for loans exceeding $50,000. As of Oct. 31, 2019, the U.S. prime rate was 4.75%.

    SBA 7(a) Loans

    If your heavy equipment financing needs exceed $350,000, consider a 7(a) loan. While the funding process for SBA 7(a) loans could take some time, you could secure up to $5 million in funds. The maximum variable interest rates that lenders can charge for SBA loans vary from a base rate plus 2.25% interest to a base rate plus 4.75%, depending on loan term and amount borrowed.

    U.S. Equipment Leasing and Financing Spending

    More businesses are turning to financing as a means of funding an equipment purchase or lease. According to a 2019 fourth-quarter report from nonprofit trade group Equipment Leasing & Finance Foundation, there was $9.2 billion in new business gains within the equipment finance industry, up 3% from year-earlier results.

    Heavy Equipment Financing With Bad Credit

    If you’re researching heavy equipment financing or construction equipment financing for bad credit, you’re in luck. Even if you’ve been denied for a conventional bank loan, there are still financing options that can help you pay for your heavy equipment purchase or lease. 

    While you may not qualify for conventional equipment financing if your credit score is below 620, you may be able to secure financing through an alternative business loan. For example, you could use one of the following financing products to serve as your heavy machinery or construction equipment loan:

    • Short-term commercial loan 
        • May be available with a credit score of 540
        • Terms may extend up to 18 months
    • Business line of credit 
      • May be available with a credit score of 560
      • Works similar to a credit card: With revolving lines of credit, you’re given a credit limit, which is available when you need it. 
      • You aren’t charged interest unless you make a purchase. Once you pay down your debt, your credit limit is replenished.
    • Business term loan 
      • May be available with a credit score of 600
      • Repayment terms can range from 1 year-5 years
    • Merchant cash advance  
        • May be available with a credit score of 500 or better
        • Repayment terms can range from 3-24 months

    While options are available for most businesses, it’s important to note that interest rates and monthly payments will generally be higher for borrowers who have a poor credit score. You can estimate your monthly payments using online business loan calculators to get a better idea of what you can afford.

    Where to Find Business Loans for Heavy Equipment

    Heavy equipment and construction equipment financing companies include conventional banks, credit unions and alternative lenders. Some heavy equipment dealers may offer financing. Once approved, the time it takes you to receive funds varies by lender. Conventional banks may take weeks, while alternative lenders can provide funding for your piece of equipment in 1 or 2 days. 

    Heavy machinery and construction equipment financing rates vary by lender and are also affected by other variables, such as:

    • Type of financing
    • Down payment
    • Amount to be financed
    • Borrower credit score
    • Type and age of machinery

    What You Need to Apply for Heavy Equipment Financing 

    To get financing for your heavy equipment machinery, you’ll usually need to have been in business for a minimal amount of time and meet annual revenue requirements. With Fast Capital 360, you’ll need the following qualifications and documentation to get started: 

    Minimum Requirements:

    • 4 months in business
    • $100,000 in annual revenue
    • 500+ FICO score

    What You’ll Need to Provide to Apply

    • Basic information about you and your business
    • Your 4 most recent monthly bank statements 

    Apply with Fast Capital 360 

    If you’re ready to lease or purchase your construction and heavy equipment machinery, we’re here to help. With one easy application, you can: 

    Save Time

    Apply online fast with our secure application. In less than 5 minutes, you could submit the information you need to receive offers within 24 hours.  

    Get Multiple Loan Offers

    We partner with lenders nationwide to be able to offer you some of the best heavy equipment financing options. With one single application, you could receive several offers.

    Receive Expert Advice 

    You’ll be assigned a dedicated Business Advisor to guide you through the funding process. You’ll be able to review your loan repayment terms and get the information you need to make an informed decision regarding the funding that’s right for you.

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