The Best Heavy Equipment Financing Options For Your Construction Business In 2023

Camino Financial03 Feb 2024
The Best Heavy Equipment Financing Options For Your Construction Business In 2023

Seeking heavy equipment financing is a must for growth. With the right lender, you can elevate your enterprise to new heights.

In this blog post, we'll discuss some of the best construction equipment financing alternatives in 2023, lenders, pros, cons, and all you need to know for acquiring reliable heavy equipment. So, if you're looking for a construction equipment loan, this read is indispensable for you

Top Heavy Equipment Financing Companies

Camino Financial

Camino Financial's logo At Camino Financial, we pride ourselves on offering some of the most competitive loan terms in the industry, catering to a broad range of customers. Eligibility Criteria:
  • Have an SSN
  • Own a minimum of 50% of the business
  • Business active and registered for at least 12 months
  • Achieve a minimum of $30,000 in annual gross sales
Our Offerings:
  • Loans ranging from $10,000 - $50,000
  • Repayment time: 24 months
  • Fixed annual interest rates
  • No penalties for early repayments
In addition, after making 12 months of timely payments, you could get a loan renewal, making your construction equipment financing even cheaper. Here, you can find our small business loan requirements. Apply for a business loan today!

National Funding

national funding logo National Funding is an excellent solution for businesses that need to purchase new or used equipment but don't have the cash to do so. Eligibility Criteria:
  • Personal credit score of at least 575
  • Business active for at least 6 months
  • Equipment quote from a vendor
  • No collateral
  • Loans up to $150,000
  • Terms from 12 to 84 months

Crest Capital

crest capital logo Crest Capital focuses on construction equipment leasing and loans, not lines of credit or venture capital. Eligibility Criteria:
  • Credit score for at least 650
  • Business active for at least 2 years
  • Equipment quote from a vendor
  • Loans from$5,000 to $500,000
  • Terms from 12 to 84 months

Balboa Capital

Balboa Capital logo Balboa Capital offers an option you may want to consider if you're in the market for new or used construction equipment but don't have the funds for a large upfront payment. Eligibility Criteria:
  • FICO score for at least 620
  • Business active for at least 1 year
  • + $100,000 in annual revenue
  • Loans up to $500,000
  • Terms from 24 to 60 months

How To Get A Business Loan For Equipment

Getting a loan for a construction business or heavy equipment is similar to applying for a small business loan.
  1. Prepare Your Documents. Keep important paperwork like your business plan, tax returns, and bank statements readily accessible.
  2. Check Your Credit. High-value equipment loans usually require a strong credit score. If yours needs improvement, consider waiting or making a significant down payment.
  3. Know What Lenders Want. Research the lender's qualifications—your business's age, annual revenue, and credit score—to gauge eligibility.
  4. Ask About Equipment Specs. Before you apply, check if your lender has any special equipment requirements.
  5. Submit Your Application. Fill out the loan application, either online or on paper, once you feel ready.
  6. Wait and Respond. After submitting, wait for lender feedback. Be prepared for possible follow-up queries.
  7. Review Your Loan Contract. If approved, carefully read the loan agreement, understand the terms, and proceed once you're comfortable.

Things To Consider Before Applying For A Loan

  • Identify the Need. Before diving into the ocean of options, be clear about the type of machinery you need and why. This clarity will be a compass in your quest for the right equipment.
  • Research Specifications. Now that you know what you're looking for, delve into the specifics. Compare features, efficiency, and pricing across various models to make an informed decision.
  • Budget Planning. Your budget should include the upfront cost and the total cost of ownership. This entails considerations like maintenance, fuel, and repairs.
  • New vs. Used. Each option has its own set of advantages and disadvantages. New equipment comes with the latest technology and a warranty, while used ones are easier on the wallet but may have a shorter lifespan.

Where To Find Heavy Equipment For Purchase

  • Authorized Dealers. If you're looking for brand-new equipment along with robust after-sales services, authorized dealers are your safest bet.
  • Auctions. If you're willing to go for used equipment, online and offline auctions can offer some unbeatable deals.
  • Direct from Owner. Buying used equipment directly from the owner can yield significant cost savings but requires you to be extremely cautious and thorough during the inspection.
  • Online Platforms. The internet is a treasure trove of options, offering new and used equipment from multiple sellers across the globe.
  • Leasing Options. For short-term needs, leasing can provide a cost-effective alternative to outright purchase.
#DidYouKnow At Camino Financial, we have minimal requirements for machinery financing.

What Is Heavy Or Construction Equipment Financing?

Heavy equipment financing is your ticket to acquiring crucial machinery without breaking the bank. Think excavators, bulldozers, cranes, and loaders—gear that's indispensable in fields like construction, agriculture, and mining.  Let's face it: these machines carry hefty price tags, making outright purchases a tall order for most businesses. That's where specialized financing steps in. Whether you're a contractor or oversee a construction site, having reliable machinery is non-negotiable for keeping projects on track. Investing in heavy equipment can be one of your biggest outlays. But thanks to equipment financing, you can lease or buy what you need without wiping out your cash reserves. It's all about keeping your operations smooth while protecting your bottom line.

Pros And Cons Of Equipment Financing

  • Credit Building. Making on-time payments clears your debt and enhances your credit profile, opening doors to additional financing in the future.
  • Business Expansion. Gain access to the essential equipment you need to amplify your revenue, increase profitability, and scale your operations to new heights.
  • Full Ownership. With financing, the equipment becomes yours upon loan repayment, offering complete control over its usage and maintenance.
  • Collateral-Based. The loan is typically unsecured, as the equipment itself serves as collateral—eliminating the need for extra guarantees or liens.
  • Higher Long-Term Costs. Compared to an outright cash purchase, financing can accrue additional expenses in the form of interest rates and fees.
  • Cash Flow Challenges. The obligation for regular payments may strain your cash flow if your revenue isn't sufficient to offset these costs.
  • Business and Credit Risks. Failure to meet loan repayments could lead to business failure and a tarnished credit reputation.
  • Asset Depreciation. The value of the equipment will inevitably decline over time, impacting your business's net worth.
  • Initial Investment. Some lenders may ask for a down payment, adding to your upfront costs.

5 Types Of Loans You Can Use To Buy Heavy Equipment

When you need machinery to keep your business going—or take it to the next level—you need it fast. These funding sources are among the most popular construction equipment financing and leasing options you can access. Let's take a detailed look at each one.

Heavy Equipment Financing Loans

Banks and credit unions offer a variety of equipment loans tailored for small businesses.
#CaminoTip There are 2 financial products you will find: equipment financing and heavy equipment financing (the latter is what construction businesses most commonly need). Make sure to find a lender that fits your needs.

A heavy equipment loan works similarly to other types of small business loans.

Pros and Cons

  • Pros: Quick approval, possibility for 100% financing, the equipment acts as collateral.
  • Cons: High-interest rates, stringent credit score requirements, and the loan amount is often limited by the equipment's lifespan.
Key Details
  • How it Works: Similar to conventional small business loans.
  • Down Payment: Some lenders offer full financing.
  • Collateral: The equipment serves as collateral.
  • Interest Rates: Typically between 8%-30%.
Many banks will require a strong credit history and may not accept ITIN instead of an SSN.

Lines Of Credit

A line of credit resembles a credit card; the financial institution provides you with a predetermined credit limit, which you can draw upon as needed. Pros and Cons
  • Pros: Flexibility, suitable for ongoing expenses, only borrow the amount you actually need.
  • Cons: Higher interest rates, obligatory monthly repayments, not well-suited for large, one-time costs.
Key Details
  • Credit Limit: Ranges from $10,000 to $1 million, depending on the institution.
  • Interest Rates: Usually between 15% to 25%.

SBA Loans

Small Business Administration (SBA) loans are often a viable option for many small businesses, particularly through their SBA 7(a) loan program. Pros and Cons
  • Pros: Competitive interest rates, higher loan amounts, ideal for large-scale purchasing equipment
  • Cons: Longer time to approval, strict eligibility criteria, more paperwork required.
Key Details
  • Interest Rates: Usually between 2.25% to 4.75%.
  • Eligibility: Good credit score (generally 640 or above), valid Social Security Number (SSN), and meet SBA size standards for small businesses.


Construction equipment leasing offers you a way to use equipment temporarily, often with options to upgrade the equipment at the end of the lease term. Pros and Cons
  • Pros: Lower initial costs, option for equipment upgrades, suitable for short-lifecycle equipment.
  • Cons: No ownership of the equipment, potentially higher long-term costs, bound by contractual obligations.
Key Details
  • Lease Length: Usually between 3 to 5 years.
  • Costs: For equipment valued at $50,000, anticipate monthly payments of $2,000 to $3,000.

Comparison Of Construction Equipment Financing Options

Amount Repayment terms APR Fees Credit score needed
Camino Financial $10,000 – $50,000 24 months 32% to 45% 6.99% Yes 
Equipment Financing Loans $10,000 – $350,000 Up to 10 years 8% – 30% TBD Yes 
Lines of Credit Up to $1,000,000 Revolving 15% – 25% TBD Yes 
SBA Loans Up to $5M 10 years 7.5% – 10% Up to 3.5% Yes 
Leases Up to $100,000 Up to 10 years 10% – 20% TBD Yes 
#DidYouKnow Construction equipment is not only expensive but many times it also requires special training (or even a license) to operate.
Apply for a business loan today!

Another Option: Equipment Leasing

When you opt for equipment leasing, you enter into a rental agreement with the equipment owner for a specified duration, as outlined in your lease contract. Once the lease ends, you can either return the equipment, renew the lease, or purchase the asset outright. Advantages:
  • Credit Score Boost. Consistent, timely payments clear your debt and elevate your credit history and score, paving the way for future financing opportunities.
  • Business Growth. Acquiring the right equipment can substantially boost your revenue and profits, allowing you to take on larger projects and scale your operations.
  • Ownership. Unlike leasing, financing leads to outright ownership, giving you full control over the equipment.
  • Unsecured Loan. The equipment itself serves as collateral, often eliminating the need for additional guarantees.
  • Costlier than Cash. Financing can be more expensive in the long run due to interest rates and fees than outright cash purchases.
  • Cash Flow Constraints. Without adequate revenue, your regular payments could strain your cash flow.
  • Credit Risks. Failure to meet repayment commitments can jeopardize your business and tarnish your credit reputation.
  • Asset Depreciation. As with most assets, equipment value will depreciate over time, reducing your net worth.
  • Initial Investment. Some lenders may require a down payment, adding to your initial costs.
Deciding between equipment financing and leasing is an important strategic decision for your construction business. Consider your current finances, project needs, and long-term goals before choosing.

It's Time You Financing the Construction Equipment You Need

Construction companies often need to purchase equipment but don't have as many options for heavy equipment financing loans. While some of the above options may work, they could come at a high cost, and not everyone will qualify. Fortunately, Camino Financial can help you finance the piece of machinery that your business needs to grow and thrive. We are an online lender with the mission of helping underserved business owners who can't get capital with more traditional lenders. Apply for a business loan today!  


What heavy equipment makes the most money?

The highest-paid heavy equipment jobs include crane operators, construction equipment operators, riggers, front load drivers, backhoe operators, and winch truck drivers. Also, a business owner must have a steady revenue stream and a favorable debt-to-income ratio to generate the most money.

How do you start a heavy equipment business?

  1. Decide what type of service you want to provide
  2. Write a business plan
  3. Register your business
  4. Get the funding to purchase the heavy equipment and cover the startup cost
  5. Get the required licenses and insurance
  6. Hire employees unless you're a solopreneur
  7. Market your business to acquire clients

Can I use a working capital loan for construction equipment purchases?

The use of working capital loans to purchase construction equipment will depend on the lending institution's specific terms and conditions. You can use a working capital loan for short-term financings, such as covering day-to-day expenses or meeting near-term liabilities. As such, a lending institution would likely not approve using a working capital loan to purchase construction equipment, which they would consider a long-term investment.

How long can you finance heavy equipment?

Generally, you can finance equipment for anywhere from one to seven years. However, it's important to note that the longer the term of your loan, the higher your interest rate will be. So, weighing your options and choosing the financing option that best suits your needs is essential.

Is it hard to get a piece of equipment financed?

The simple answer is yes; it can be challenging to obtain financing for equipment. The primary reason for this is that lenders view equipment as riskier security than other types of collateral, such as real estate or vehicles. This is because equipment can often depreciate quickly, making it a less-than-ideal investment for lenders.

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