Financing Construction Equipment

Heavy equipment is expensive but essential. Here's how to finance it:

Common Equipment Costs:

• ●Excavator: $100,000 - $500,000+
• ●Skid steer: $25,000 - $75,000
• ●Backhoe: $60,000 - $150,000
• ●Dump truck: $100,000 - $200,000
• ●Concrete truck: $150,000 - $250,000
• ●Crane: $200,000 - $1,000,000+
• ●Bulldozer: $75,000 - $200,000
• ●Compactor: $20,000 - $100,000

Financing Options:

Equipment Loan:

• ●Own the equipment after payoff
• ●Equipment as collateral
• ●Terms: 3-7 years
• ●Down payment: 0-20%

Equipment Lease:

• ●Operating lease: Return at end
• ●Capital lease: Own at end
• ●Often includes maintenance
• ●Better for rapidly depreciating equipment

New vs Used Equipment: New Equipment:

• ●Longer useful life
• ●Warranty coverage
• ●Better financing terms
• ●Higher initial cost

Used Equipment:

• ●Lower cost
• ●Faster depreciation (tax benefit)
• ●May need larger down payment
• ●Potential maintenance issues

Financing Tips for Contractors:

1. ●Match loan term to useful life
2. ●Consider seasonal payment structures
3. ●Get pre-approved before shopping
4. ●Factor in maintenance costs
5. ●Utilize Section 179 for tax deduction

What Lenders Evaluate:

• ●Time in business (2+ years preferred)
• ●Revenue stability
• ●Equipment type and age
• ●Down payment
• ●Credit score (600+ typical)
• ●Project pipeline