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More than 1.4 million new housing units were constructed in the United States last year. This trend shows the potential of owning and operating a construction company in this economy. A survey says that 919k construction establishments are operational nationwide today. They often have to acquire heavy machinery that either costs a fortune or is needed for short-term projects only. That’s why they rely on construction equipment loans & financing.
From bulldozers and excavators to cranes and bobcats, businesses can make use of various heavy-duty items. This article explains how to get construction equipment financing in America and its pros & cons.
| Lender | Highlights |
|---|---|
| Swoop Funding | Swoop Funding helps construction companies make heavy machinery equipment purchases without paying for anything upfront. |
| Speritas Capital Partners | From forklifts to construction equipment of other kinds, you can easily get millions of dollars in loans to make construction equipment purchases. |
| Fifth Third Bank | If you need commercial equipment leasing, you’ll find Fifth Third Bank, a reliable lender. It will finance your heavy equipment purchase so you can expand your business successfully |
| JLG Financial | Financial deals start at $3k, and you get up to 90 days of pre-approval. |
| Wells Fargo | This lender offers you customized, specialized lending in the construction arena. This way, you can purchase expensive construction equipment flexibly. |
Tri-Counties Bank | This is yet another lender that allows construction companies to get their equipment purchases financed at flexible rates. |
| First Citizens Bank | CIT, a subsidiary of the First Citizen Bank, will let you purchase construction equipment with flexible financing terms. |
| Atlantic Business Loans | You get up to $250k in financing with a quick approval process. |
| BFC Finance | If you run a commercial construction crew in Florida, BFC Finance will help you buy heavy machinery with flexible terms & conditions. In 2 to 3 days, you can get up to half a million in finance. |
| Keystone Commercial Lending | This Dallas-based lender offers up to $250k in construction equipment loans. Approval takes 48 hours at max, and you have 60 months to pay them back. |
Types of Construction Equipment Available
To start, let’s look into who can use construction equipment loans. You may need this option if you happen to be:
- The owner of a small to medium-sized construction business lacking the capital to buy expensive machinery right away
- A contractor/subcontractor who takes on particular projects and needs ample financing to secure modern equipment easily
- Building companies expanding their operations and seeking customers in other cities or states
- Businesses facing seasonal fluctuations and experiencing cash flow problems due to project timelines & payment schedules
- New startups in the construction sector lacking the necessary financing to establish their operations
You can acquire the following pieces of equipment with these financing options:
- Excavators
- Backhoes
- Loaders and cranes
- Concrete mixers
- Pavers and forklifts
- Skid steer loaders
- Dump trucks and compactors
Top 10 Best Construction Loans in the US
If you’re looking to make construction equipment purchases, here are some options to consider:
1. Swoop Funding
Swoop Funding helps construction companies make heavy machinery equipment purchases without paying for anything upfront. With flexible payment plans and a fast approval process, you can take your construction business to new heights.
2. Speritas Capital Partners
This Connecticut-based lender specializes in providing loans to building companies. From forklifts to construction equipment of other kinds, you can easily get millions of dollars in loans to make construction equipment purchases.
3. Fifth Third Bank
If you need commercial equipment leasing, you’ll find Fifth Third Bank, a reliable lender. It will finance your heavy equipment purchase so you can expand your business successfully.
4. JLG Financial
With JLG Financial, you get 100% financing for all makes and models. New and old building equipment all fall under this group’s purview. Financial deals start at $3k, and you get up to 90 days of pre-approval.
5. Wells Fargo
This lender offers you customized, specialized lending in the construction arena. This way, you can purchase expensive construction equipment flexibly.
6. Tri-Counties Bank
This is yet another lender that allows construction companies to get their equipment purchases financed at flexible rates.
7. First Citizens Bank
CIT, a subsidiary of the First Citizen Bank, will let you purchase construction equipment with flexible financing terms.
8. Atlantic Business Loans
This Florida-based company specializes in offering construction equipment loans to up-and-coming American businesses. You get up to $250k in financing with a quick approval process.
9. BFC Finance
If you run a commercial construction crew in Florida, BFC Finance will help you buy heavy machinery with flexible terms & conditions. In 2 to 3 days, you can get up to half a million in finance.
10. Keystone Commercial Lending
This Dallas-based lender offers up to $250k in construction equipment loans. Approval takes 48 hours at max, and you have 60 months to pay them back. Even companies with less-than-perfect credit and startups in the construction sector can work with them.
Types of Construction Equipment Financing Options
Given that even smaller construction companies need at least $50k to begin their operations, you should look into different construction equipment loans to start your business. Basically, you can get these two options:
- Heavy Equipment Loans: If you wish to purchase heavy equipment outright, then it will be used as collateral in this funding option. Repayment takes 12 to 84 months. But the rate of interest will be determined by:
- Market conditions
- The nature of the equipment financed
- Your creditworthiness
- Heavy Equipment Leasing: Leasing lets you rent equipment for a certain period. It has an option to allow you to buy construction equipment in the end. This way, you can preserve cash flow and avoid large upfront costs.
Construction Equipment Loans: Are You Eligible?
Did you know that around 3k companies go broke in a given year? In the first two quarters of 2024, 4,300+ builders in the UK went solvent. That’s why you should look into whether you stand eligible to receive construction financing loans or not.
Eligibility Criteria
- How long have you been in the construction business? Lenders prefer companies that have been operational for at least half a year.
- An annual revenue of around $250k (like always) will make lenders more inclined toward approving your funding application.
- A credit score of 625 improves your access to better financing options. Some lenders may accept to loan you the funds without a credit check, but make sure the rates and terms aren’t eggregious.
Application Process
- You should start by determining how much your preferred construction equipment will cost, including maintenance, insurance, and other expenses.
- Look into which lenders offer you the best rates, repayment terms, credit score limits, collateral expectations, and other stuff.
- Gather the necessary documentation, such as:
- Bank statements
- Tax returns
- Business registration paperwork
- Equipment quotes from vendors
- Next, you’ll submit the application, review the terms & conditions, and sign the equipment financing loan contract.
Financing Construction Equipment: Pros and Cons
| Pros | Cons |
| You can access the latest technology with lower initial costs. | Some financing agreements can be complex and may contain hidden fees or unfavorable terms |
| Flexible payment options will let you choose a plan that fits your budget. | Leasing deprives you of ownership benefits and may have less favorable taxation implications. |
| Your existing credit lines will stay unaffected, so you can seek financing in other ways. | While many leasing companies offer options for those with damaged credit, poor credit scores can still result in higher interest rates |
| Leasing lets you upgrade your equipment to stay competitive. | Leasing agreements may impose restrictions on how equipment can be used or modified |
Choosing the Right Lender for Construction Equipment Financing
Here’s how you should look into which lender works for you:
- Check what type of lender you’re comfortable working with, e.g., traditional banks, online lenders, specialized equipment financing companies, or someone else.
- Look into what kind of interest rates you prefer. These rates will be different based on your creditworthiness, business history, and other factors.
- Check the lender’s eligibility criteria and consider if you can comply with these criteria with minor adjustments or have to switch lenders altogether. The criteria normally have the following conditions:
- Minimum credit score
- Time spent in business
- Annual revenue generation
- The lender’s funding speed is also a major factor given that many lenders approve your request in a few hours.
- Choose a lender with a reputation for excellent customer service.
If you need help understanding which construction equipment financing option is better for you, we provide amazing reviews of different lenders and their services.
So, you should get in touch with Sophisticated Investor to learn more about your loan/leasing options in the United States. Take your construction practice to new heights by purchasing or leasing the construction equipment to take your business to new heights.
Construction Equipment Financing: FAQs
Q. What happens at the end of a lease term?
- When your lease term ends, you can either buy that construction equipment or simply return it to your lender. Also, some lenders let you extend the lease.
Q. Can I still finance equipment with bad credit?
- Yes, some lenders will offer you construction equipment loans even if you have bad credit. In this context, they consider other factors, such as:
- Down payments
- Additional collateral
- Cash flow requirements
Q. How long does the application process take? The application process varies from lender to lender. A traditional bank may take a long time to approve your application, given their cumbersome vetting process. Online lenders offer fast approval that takes a few minutes in some cases.
Brandi is a financial writer and entrepreneur with decades of expertise covering U.S. business and financial topics. Her work has been featured on Consumer Affairs, ASBN Small Business Network, Koho and many other top financial publications.
