For construction companies, getting a piece of heavy machinery is like receiving a surprise present. Unwrapping that new piece of equipment is exciting because of how valuable and useful it is for your business operations. A single piece of construction equipment can completely transform the amount of work your team can do and the type of projects you can take on. Can you afford it? With the right equipment financing, you can.
What Types of Construction Equipment Does Financing Cover?
Construction equipment financing can take care of a huge range of items and price tags. Smaller loans can easily help you purchase or replace compactors and air compressors. You can buy paint sprayers, nail guns, saws, leveling equipment, and endless tools.
Middle-market financing can help you add another skid loader to your lineup or scissor lifts for construction. In reality, there are no limits to the equipment you can purchase with middle-market and large-ticket financing. You can buy loaders, backhoes, cement trucks, bulldozers, boom trucks, excavators, and other types of heavy machinery.
What Construction Equipment Financing Options Are Available?
There are three main ways to get the construction equipment your business needs: equipment loans, equipment leases and SBA loans. How can you choose the right option?
Equipment loans are probably the easiest loan option for purchasing construction equipment. They use the equipment as collateral for the loan. This reduces the requirements significantly, helping you get excellent interest rates and long repayment terms of up to 25 years. Even businesses with credit issues can qualify, though they may need a larger down payment for it.
Equipment leasing is smart for new construction companies that haven’t set aside money for a down payment yet. You can get state-of-the-art construction equipment for a comfortable monthly payment. Leases offer several options at the end of the contract, such as dollar buyouts. Leasing makes it easy to swap equipment with newer models.
SBA loans have some of the best interest rates around, along with lower down payments for purchasing equipment. They’re harder to qualify for, however, and they take longer for approval. If you own a small business, it’s a good idea to at least look at the benefits offered.
Contractors often have the misconception that heavy machinery is out of their reach. The truth is that even small construction businesses can qualify for financing for the largest pieces of equipment. The requirements depend more on your time in business, cash flow, and experience than on your company’s credit score or size.