Heavy equipment loans are essential for many small businesses, allowing them to purchase costly equipment that can be used to start a new business, grow an existing business, or even acquire and boost an existing company. These equipment loans are particularly helpful in the construction, agriculture, transportation, and aviation industries, where standard equipment might easily have a price tag well into six, seven, or even eight figures.

Rather than buying this equipment upfront in cash, small businesses can take out loans or even lease it. This preserves the company’s cash stores and liquidity, while still providing it with much-needed machinery, vehicles, and other equipment.

Here’s a look at some  heavy equipment lenders today, how to choose the right equipment loan for you, and why small businesses should spend time comparing lenders and loan terms before making their decision.

6 Lenders Offering Heavy Equipment Loans

Here are some heavy equipment lenders if you’re looking to purchase construction equipment for your small business.

1. CrestCapital

• Loan amounts: $5,000 to $500,000
• Repayment terms: Up to 84 months

Crest Capital makes it easy to purchase everything from excavators and skid steers to vehicles, software, and more. Through CrestCapital, business owners can borrow anywhere from $5,000 to $500,000 for various equipment needs with one simple online application and up to 100% financing.

New or used equipment up to 10 years old is allowed. No financial statements are required to borrow up to $250,000 with same-day approval.  Larger requests take more time to approve.

2. CIT Bank

• Loan amounts: $1,000 to $1 million (capital equipment loans from $3 million to $100 million)
• Repayment terms: 24 to 72 months (up to 10 years for capital loans)

CIT Bank is a trusted financing solution for small businesses looking to buy construction, farming, or other heavy equipment. Their financing programs offer as much as $100 million in used and new equipment financing, so businesses of all sizes can buy or lease heavy equipment depending on their financing needs.

While heavy equipment loans are common in the construction industry, CIT Bank (through First Citizens Bank) also helps finance heavy equipment for businesses in the aerospace, automotive, mining, packaging, healthcare, and utility industries, among others. Repayment terms last as long as 10 years, depending on the loan you choose, though most smaller equipment loans will be limited to 72 months.

3. Balboa Capital

• Loan amounts: Up to $500,000
• Repayment terms: 24, 36, 48, or 60 months

Whether you’re a construction business wanting to buy a bulldozer or a bakery looking to invest in commercial ovens, Balboa Capital can help finance your new and used equipment purchases quickly. Up to 100% equipment financing is available with no upfront fees or leasing options.

You’ll need a minimum FICO score of 620 along with $100,000 or more in annual revenue and at least one year of business history. If you meet those requirements, though, you can borrow heavy equipment loans of up to $500,000 with one-hour approval and funding as soon as the same business day.

4. Wells Fargo

• Loan amounts: $100,000 and up
• Repayment terms: 12 to 84 months for most business loans

Wells Fargo is already one of the largest and most trusted banks for business bank accounts and credit cards but it may also be worth considering when shopping for heavy equipment lease or loan options. Business aircraft, rail cars, construction equipment, or commercial vehicles are all fair game, helping you meet your new company, business growth, or business acquisition goals.

Construction equipment loans through Wells Fargo offer $100,000 or more in funding with various lease and repayment terms lasting up to 84 months. The application process is a bit more involved than other banks, requiring you to chat with a bank loan representative first. If you’re a construction company that prefers an online application and same-day funding, Wells Fargo might not be the answer for you.

5. National Funding

• Loan amount: Up to $150,000
• Repayment terms: Up to 10 years

National Funding offers up to $150,000 in commercial equipment financing, leasing, and working capital loans to small businesses with no down payment requirement. New and pre-owned equipment is allowed with application decisions in 24 hours or less and fast funding once approved.

To qualify, you must have been in business for at least six months and have fair to excellent credit, plus, you’ll also need an equipment quote from a vendor. To apply, you will fill out an application online and then be contacted by a loan specialist to learn more about your needs, so the decision isn’t instantaneous.

6. Bank of America

• Loan amount: $25,000 and up
• Repayment terms: Up to 60 months

Another trusted financing solution for business borrowers is Bank of America. This  financial institution offers heavy equipment loans from $25,000 and on with fixed equipment loan rates starting at just 7.00% APR. (Few equipment lenders publish this before you apply, so it can be difficult to find the most competitive rates.) Repayment terms go as long as five years for secured loans, too.

To qualify, your business must be at least two years old under your same ownership, with an annual revenue of $250,000 or more. There is an origination fee of 0.5%, which not all lenders charge, so be sure to keep this in mind.

How to Compare Lenders and Find the Best Deal

Whether you’re seeking business financing to help manage your current cash flow or want a heavy equipment loan to buy specific machinery your business needs, it’s important to shop around. This will allow you to compare lenders, calculate your loan costs, and find the best possible deal for your company.

Some things to compare when shopping for a loan include:

• Your loan terms: Consider interest rates (and whether they’re fixed or variable), the allowed repayment terms, and your total loan cost.
• Fees and penalties: Read the lender’s disclosures carefully to see if you will incur any fees for origination or paying off the loan early.
• Customer support and industry reputation: Be sure to read reviews from other customers; this will tell you if the lender has a history of good customer service and will be there to help you when you need it.
• Loan flexibility: Consider whether the lender’s repayment schedules are flexible and what your eligibility requirements would be.
• The application process: How difficult is it to apply, what’s required to qualify, and how long will it take to get a long decision and/or funding?

In some cases, you might also want to explore alternative financing options. If you cannot qualify for the heavy equipment loan you need, leasing equipment may be a better way to grow your business without buying machinery upfront.

Loans through the Small Business Administration (SBA loans) offer up to $5 million in funding for eligible businesses through partner lenders and may have even more competitive rates and loan terms. Lastly, business lines of credit can give you flexible access to cash that you could use for everyday expenses, machinery and inventory purchases, or even payroll.

Final Thoughts

Heavy equipment loans can help owners buy the machinery they need to start, grow, or even acquire their small business. These loans are available through a number of business lenders and the money you borrow might even be tax-deductible depending on what you buy and how much you spend.

Finding the right heavy equipment loan first means looking at your business needs and eligibility criteria through each lender. You should compare everything from available loan limits to interest rates, fees, repayment terms, and penalties to see which loan is the best possible option for you.

FAQs about Heavy Equipment Loans

How hard is it to get heavy equipment financing?

To qualify for a heavy equipment loan, you’ll need to meet the eligibility requirements that vary by lender. These might include a certain length of business history, minimum annual revenue requirement, and business and/or personal credit score threshold. Heavy equipment financing companies might also require you to put a certain amount down on your loan.

How long is heavy equipment financed for?

Heavy equipment loan repayment terms can range anywhere from a few months to 10 years or more. Your repayment period will depend on the lender you choose, how much you borrow, and whether you meet certain criteria.

Do equipment loans require a down payment?

While many heavy equipment lenders offer 100% financing, others might only finance 80% or 90% of your equipment purchase, leaving you to cover the difference. While this isn’t a down payment, per se, it is money out of your own pocket upfront.

What kind of heavy equipment can I finance?

Heavy equipment loans can be used to purchase construction equipment, manufacturing machinery, commercial vehicles, kitchen equipment, rail cars, commercial aircraft, software, office technology, and more. In most cases, this equipment will be used to secure the loan.

How much can I borrow to buy heavy equipment for my business?

Some heavy equipment lenders allow you to borrow up to $150,000 while other business lenders will allow $100 million or more. How much you can borrow depends on what your business qualifies for, what you plan to buy, your credit score, how much you can afford in monthly payments, and which lender you pick.

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