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Business Heavy Equipment Financing for Good & Bad Credit

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  • Acquire equipment businesses need to grow and expand their operations
  • Preserves cash flow
  • Tax benefits, such as deductions for interest and depreciation
  • High upfront costs
  • Collateral requirements to secure the loan
  • Limited flexibility with fixed repayment terms

Business Heavy Equipment Financing for Good & Bad Credit

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Business Heavy Equipment Loans & Leasing for Good & Bad Credit

What is Heavy Equipment Financing?

When it comes to acquiring heavy equipment, many firms are at a loss for how to come up with the cash. Regardless of the industry the business operates in, there’s likely heavy equipment financing options available. For example, construction heavy equipment financing allows construction companies to finance equipment such as Bobcats, tractors, trucks, and more. The acquisition of heavy machinery can be made more affordable for business owners through financing options such as loans or leases. Here, you will get a firm grasp of how heavy equipment financing works. Let’s dig in. 

How does heavy equipment financing work?

Heavy equipment financing allows businesses to borrow money to purchase heavy machinery. Financing allows business owners to make payments on a schedule rather than paying the entire amount upfront. This frees up working capital for other purposes. The success of businesses that rely on heavy equipment to get the work done frequently depends on the reliability of such equipment. The specifics on how the loan works depends on the type of loan. For example, there are equipment loans which are secured by the equipment. Therefore in the event you default on the loan, the lender can seize the equipment. Once the loan is paid off you would then own the equipment free and clear. There’s also unsecured business loans which allow business owners to access a lump sum of cash for business expenses. Unsecured business loans are not backed by collateral, so rates may be higher but they offer more flexibility. Before applying for any kind of loan you should review your business credit history as it can help you qualify and choose the best loan. At mySMBscore you can view your credit history through the eyes of the lender, thus empowering you to put your business in the best financial position possible before securing a loan.

What qualifies as heavy equipment?

A loan for heavy equipment financing is a commercial loan intended primarily for acquiring heavy equipment, which can include the following and more. 

●  Heavy-duty mowers

●  Backhoes

●  Bulldozers

●  Agricultural tractors

●  Snowcat

●  Skidder

●  Tractor

●  Landscaping equipment

●  Excavator

●  Generators

Kapitus Equipment Financing

Business Requirements

  • 675 credit score
  • 3+ years in business
  • Equipment Invoice

Fast Equipment Financing

  • Terms Up To 60 Months
  • Funding in as Little 24 Hours

What is the difference between leasing and financing heavy equipment? 

A lease enables you to pay for the use of equipment for a predetermined period. After that time has passed, you are responsible for returning the equipment. Nevertheless, some businesses give customers the option to buy the asset at the end of the lease. On the other hand, if you finance the purchase of equipment, you will immediately become the owner once you have paid off the loan debt.

Leasing differs from financing because the business owner pays to use the equipment for a predetermined time. They do this rather than taking ownership of the equipment outright, as with financing. In contrast, financing allows the business owner to take ownership of the underlying equipment. Business owners who don't plan to use the equipment for a very long time may find that leasing is a better option. Leasing may also be smart for equipment with high maintenance costs as it may be covered in the lease. Equipment financing may be of tremendous advantage to companies who want to keep the equipment for a more extended period. Do the math and consider the lifespan and usage of the equipment to make the best decision. If you purchase or finance equipment, you’ll also need to store it. If you lease it, you may be able to give it back in between uses. Leasing equipment is more like renting a car as opposed to leasing one. 

Where to find heavy equipment financing options

The choice is abundant for companies that lend money for heavy equipment. Here are some options to consider:

  1. Online lenders

The internet creates much opportunity for businesses. Financing is just another one of those opportunities. Online lenders are known for having less strict requirements and more flexible terms, as a way to pass down their overhead savings. At mySMBscore you can review your credit history and connect with online lenders that can help with equipment and business financing. 

  1. Equity Sales

If you find yourself in a financial bind, you always have the option of selling shares in your firm in return for financing. You will also be able to get expertise from your new company partner. At the same time, that individual may exercise control over your operations. This is to ensure that their investment is safeguarded. Equity financing is not always the best solution but it can make sense under the right circumstances. 

  1. Manufacturer or retailer equipment financing

Retailers and manufacturers that sell heavy equipment often know the cost is an obstacle. Some may partner with a 3rd party company to offer financing. Alternatively, they may offer payment plans. 

If you need heavy equipment financing, start by checking your business credit score and history at mySMBscore. mySMBscore users can find lenders that want to work with them based on credit data. Users can also see the areas that lenders usually assess when approving a loan. You can view your credit through the lens of a lender to identify necessary improvements.

Is it hard to finance heavy equipment?

No, it isn't. Since it serves as security for the loan, it’s typically more straightforward to qualify for financing for heavy equipment than other types of loans. In addition, the amount of money you can borrow is not based merely on your annual revenue or your company's credit score. Instead, it’s proportional to the cost of the equipment that you want to purchase, although business credit score and revenue play a role too. Plus, there are plenty of other ways to finance heavy equipment too in addition to an equipment loan. 

Do banks do equipment loans?

Yes, some banks offer equipment loans. Banks that offer business banking and products will usually offer some sort of loan or financing that works for equipment or machinery.  Although banks typically provide equipment loans with favorable interest, rates, and terms, eligibility requirements can be stringent. Furthermore, funding and approval processes can be slow. 

How many years can you finance heavy equipment?

The number of years could run anywhere from one year to six years. However, it all depends on what it is that you are acquiring. Several financial institutions will not grant a loan for longer than the equipment's expected lifespan. You should select a term based on the amount that you can pay every month. More extended periods result in lower monthly payments but a higher total cost. See also 5 year loans and 10 year loans.

What business credit score do you need to buy heavy equipment?

Personal and business credit scores can be considered when applying for a loan. And, it usually plays a big role in your eligibility. You should plan on having a business credit score of at least 650 to 700 to qualify for heavy equipment financing. Business credit score requirements will vary depending on the lender. Some financial institutions will be willing to approve business credit scores lower than the range above, but the terms will likely be unfavorable, resulting in an expensive loan. Other factors such as history and utilization can also be considered. To view your credit report through the eyes of a lender, visit mySMBscore. Our user-friendly platform will allow you to better understand what you need to do to qualify for a loan. 

What are typical terms for equipment financing?

The precise conditions of a financing arrangement are contingent on several elements. A bank or another type of financial institution may be ready to loan up to 100% of the value of the equipment. This is because there is considerable security for the loan. However, loans of up to 80% of the equipment's worth are more usual. The loan terms for commercial property might range anywhere from a few months to ten years or even longer.

The interest rates charged for financing equipment might vary anywhere from 4% to 5% up to 30%. The most critical element is the credit rating of the company or the owner of the company, followed by the length of time the company has been in operation, the length of the loan term, and how well it is anticipated that the newly purchased equipment will maintain its worth.

What is the interest rate on an equipment loan?

Interest rates are also individual to the lender but can range anywhere from 2% to 20%. They can be lower if you qualify for financing through the dealer or the manufacturer. Traditional financial institutions such as banks and credit unions may offer the most favorable interest rates and repayment terms. However, as said earlier, they also typically have stricter qualification requirements.

How do you qualify for heavy equipment financing?

Demonstrating that you are in a position to pay back the money that you have borrowed is the most effective strategy for getting loans for heavy equipment. Lenders may look at the credit rating of your firm, its cash flow, or even your credit rating when making a decision. Here are a few parameters:

  1. Cash Flow

Even if your credit isn't great, but your business revenues are high, you may still be eligible for construction equipment financing. This will depend on your cash flow if your organization meets specific criteria compared to the cost of the equipment.

  1. Down Payment

Even if you have poor credit and a little annual income from your firm, you could still get financing if you make a down payment. Down payments can also help buy down the interest rate, which can be especially useful for  high-interest loans.

  1. Credit Rating

The strength of your business credit determines the quality of the financing options and products made available to you. Check that your credit report is in good shape. To do so, visit mySMBscore.


The equipment you use is a crucial component of your company and an integral aspect of its operations. If the older pieces of equipment you have in stock are well past their usable lives, you shouldn't be afraid to invest in brand equipment. Through the use of heavy equipment financing, a multitude of lenders are prepared to support you in making this big purchase.

Before applying for heavy equipment financing, we highly encourage you to check your SMBscore. The SMBscore was developed to create an industry-specific, tailor-made risk assessment that can be used to determine the financial stability of small and medium-sized businesses (SMBs). It allows business owners to review their finances through a similar lens that a lender will. At mySMBscore you can view insights that lenders look at to approve your financing. Our platform can help you determine areas of improvement so that you can be as prepared as possible before applying for a loan. We can even help connect you to lenders that you have the best chance of qualifying for. Our goal is simple - to help businesses prosper. 

Boost efficiency and revenues with new equipment. . . check your SMBscore now and unlock the best loans!

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