The yellow toy bulldozer with pile of coins against blurred background for saving money, investment, business and finance. concept: Heavy Equipment Financing
Timothy R
By: timothy-ronaldson
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Heavy Equipment Financing For Your Construction Business

Seeking heavy equipment financing is a must for growth, and you can upgrade your business with the right lender.

Let’s take a look at some of your top options. and how to find the right lender for you.

Tables of Content
1. How to get a business loan for equipment
2. The best construction equipment financing options
3. Your top 5 business equipment financing options
4. How heavy equipment financing works
5. Equipment financing vs. equipment leasing
6. Pros and cons of equipment financing
7. It’s time you finance the construction equipment you need
8. FAQs

Get Approved For A Heavy Equipment Loan Today

How to Get a Business Loan For Equipment

Getting a heavy equipment loan is similar to applying for a small business loan.

The following steps will help you to get credit approval.

  • First, make sure you have your financial documents in order, including a business plan, tax returns, financial statements, bank statements, a copy of your business license, and tax ID number.
  • Most construction equipment loans require a higher credit score because the machinery has a higher value and represents more risk for the lender. If you have a bad score, you may not want to apply for a loan until you’ve saved enough to make a substantial down payment.
  • Know the lender requirements, such as the number of years in business, annual revenue, and your credit score. If you don’t meet a specific lender’s requirements, you probably won’t qualify.
  • Ask if the lender has any special requirements regarding the equipment itself.
  • Once you’re confident you have everything you need, complete an application. In most situations, the lender will allow you to complete a paper application or submit your information online.
  • Wait to hear from the lender to see how they intend to proceed. They may need more information from you to move forward.
  • If the lender approves the loan, carefully review the loan agreement noting the specific terms. Once you agree to the loan terms, the lender will distribute the loan proceeds.

At Camino Financial, we have minimal requirements for financing heavy equipment (for example, we don’t need you to show a business plan, and you can apply with ITIN).

Heavy equipment financing rates and terms

Heavy equipment businesses pay rates and terms based on their qualifications and a lender’s requirements.

Rates average between 2% to 20%, and you can repay it in terms of 1 to 25 years.

Lenders may require a minimum credit score or request a business’s financial history for a specific period.

The Best Construction Equipment Financing Options

AmountRepayment termsAPRFeesMin credit score?Accept ITIN?
Camino Financial$10,000 – $400,00024-60 months12% – 24.75%5%N/AYes
Equipment Financing Loans$10,000 – $350,000Up to 10 years8% – 30%TBD600No
Lines of CreditUp to $1,000,000Revolving15% – 25%TBD630No
SBA LoansUp to $5M10 years7.5% – 10%Up to 3.5%640No
LeasesUp to $100,000Up to 10 years10% – 20%TBD600No

Construction equipment is not only expensive but many times it also requires special training (or even a license) to operate.

Your Top 5 Business Equipment Financing Options

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 equipment financing options you can access. Let’s take a detailed look at each one.

The faster and most accessible option: a Camino Financial loan

Perhaps the best loans for heavy equipment are in Camino Financial. We offer some of the most attractive loan terms, and we serve a wide range of customers.

  • To qualify for a Camino Financial loan, you can have an SSN or ITIN.
  • You need to own at least 50% of the business. Your company has to be in operation for at least nine months, with at least $30,000 in annual gross sales.
  • You also don’t need a credit history to apply.
  • We offer small business loans of $10,000 to $400,000, with monthly repayment terms between 24 to 60 months.
  • We fixed our annual interest rates of 12% to 24.75% with a 5% origination fee.
  • We don’t charge any early payment penalties, and you can get your money fast—within two to 10 days.

In addition, after making 8 months of timely payments, you can graduate with Camino Financial. When you do this, you’ll qualify for better loan rates, which will make your heavy equipment financing even cheaper.

Get Approved For A Heavy Equipment Loan Today

Equipment financing loans

Many financial institutions, such as banks and credit unions, offer heavy equipment loans to small businesses.

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. 

These heavy equipment loans work similarly to other types of small business loans.

Some financial institutions may allow you to finance the machinery’s full cost, while others may require you to put a down payment—much like with a car or a house.

The financial institutions often won’t force you to put up separate collateral for this type of loan because the equipment itself will serve as the collateral.

This type of heavy equipment loan typically has interest rates between 8% and 30%. Not too many people would qualify for that low end of interest rates, though. You’ll need to have a credit score of at least 600 to qualify, as well as be in business for at least one year.

  • Most financial institutions won’t accept ITINs on applications, and they won’t offer loans to people with no credit history.
  • Companies that offer equipment financing loans typically offer repayment terms of up to 10 years.
  • However, they won’t offer loans that stretch longer than the useful life of the equipment you are financing.

Lines of credit

A line of credit works similarly to a credit card. You’ll open an account with a financial institution with a set amount of credit available for you to use.

You can tap into this credit any time you need it.

You won’t get a full lump sum of money deposited into your bank with a line of credit.

The positive of this is that you don’t have to use the entire line of credit that’s extended to you.

While a line of credit may work for your heavy equipment financing, there are some downsides.

  • The first is the high-interest rate of between 15% to 25% (this rate will also depend on your credit score and history).
  • Depending on the financial institution, you can access from $10,000 to $1M with a line of credit, more than enough to finance the machinery you need.
  • Most lenders who offer lines of credit will not accept ITINs on the application.

When you tap into your line of credit, the financial institution will require you to pay a minimum monthly payment. There is usually no set term on a line of credit.

They will continue to charge this interest rate as long as there is an outstanding balance.

Therefore, the longer it takes you to pay off the line of credit, the more interest they will charge you.

A line of credit is a great alternative if your company makes regular expenses that require external capital, but if you only want it to finance machinery one time, it’s not a great option.

SBA loans

Loans offered through the Small Business Administration (SBA) are a good option for many small businesses.

The most popular program they offer is the SBA 7(a) loan program, which extends up to $5 million for use on business equipment.

Private financial institutions that work with the SBA offer heavy equipment loans.

Interest rates for these loans depend on your finance amount and the loan’s length.

Financial institutions cap all loans at an interest rate plus a maximum markup of 4.75%.

They range from a base rate plus 2.25% (for loans of $50,000 or more and a loan length of seven years or less) to a base rate plus 4.75% (for loans of $25,000 or less with a maturity of more than seven years).

This all means that your effective interest rate will likely be between 7.5% and 10% with today’s rates.

This is all subject to change, though, as rates can vary.

Each SBA loan comes with a 3.5% origination fee. Repayment terms for heavy equipment can be flexible for up to 10 years.

To qualify for an SBA loan, you need to meet the requirements for your business type and size.

You’ll need a Social Security number to apply, and you must have a solid credit history (640 and up).


There could be instances where leasing would be more beneficial than purchasing the equipment outright.

If the equipment you need doesn’t have a long lifespan, then it may make more sense to lease it.

Leasing also allows you to constantly upgrade your equipment, so you have the most up-to-date technology and features.

The downside, of course, is that you won’t own this equipment.

You’ll simply be borrowing it from the company you get the lease from for the length of the loan.

So, while the cost of a lease may be cheaper on a monthly basis than a heavy equipment financing purchase loan, the trade-off is you will have to give back the equipment at the end of the lease—or enter into a new lease.

And, in the long term, leasing might be more expensive than buying.

  • The typical lease period for construction equipment is roughly three to five years.
  • The interest rates will dramatically affect your monthly payment and could be anywhere from 10% to 20%. This will depend on your credit score and history.
  • You’ll also need an SSN to apply.

Typically, for every $1,000 that the equipment is value, thee heavy equipment leasing costs roughly $40 to $60 per month.

So, for example, if the value of the equipment you’re leasing is $50,000, you would expect to pay between $2,000 and $3,000 per month.

With those types of monthly payments, you could very well finance the machinery you need with a loan (and it will end up being your property).

Additional Ideas On How to Finance Heavy Equipment

Here are some suggestions for heavy machinery financing:

  • Contact the bank you have your business accounts with. They may offer affordable and competitive financing options.
  • Consider getting an SBA loan, such as a CDC/504 loan. This type of loan is perfect for purchasing larger assets.
    This loan has 10 – 25 year repayment terms, rates between 10% and 20%, and a minimum credit score of 650.
    In addition, applicants must have an average net income of $5 million or less.
  • If you only plan to be in business for a short time, consider getting a loan to lease the heavy equipment.
  • Compare lenders to see which one offers the best rates and terms. Some may not require collateral or a downpayment, while others do.
  • Get preorders for work prior to getting a loan so you can start work as soon as you get the funding.

How Heavy Equipment Financing Works

You borrow money from a lender to acquire large machinery such as bulldozers or forklifts and repay the principal amount plus interest and other fees the lender charges.

Collateral isn’t usually required since the lender could repossess the machinery if a borrower fails to repay the loan.

Some business owners get a loan to lease the equipment rather than pay for machinery that depreciates and loses value quickly.

Equipment financing vs. equipment leasing

Equipment financing

The borrower gets a loan to purchase the equipment and makes payments over a specified term.

The lender normally places a lien or personal guarantee on the equipment until the borrower pays for the equipment in full.

Equipment leasing

The borrower pays the construction equipment owner to rent the equipment for a specific time detailed in the lease agreement.

After the leasing period ends, you return the equipment to the owner. Sometimes, you can renew the lease agreement or purchase the equipment from the owner.

Leasing is costly when the borrower doesn’t want or have the means to buy the equipment at the end of the lease period.

Pros and Cons of Equipment Financing


  • As you make timely payments, you build a credit history and score, which helps you qualify for future loans.
  • Allows you to obtain the equipment you need to increase revenue and profit and take on more work.
  • You own the equipment.
  • Financing equipment is an unsecured loan because the equipment serves as collateral.


  • A more expensive option compared to having cash to buy equipment without paying interest and fees.
  • Cash flow can suffer unless you have sufficient income to offset making regular payments.
  • You run the change of going out of business and ruining your credit if you can’t repay the loan.
  • The equipment depreciates, which decreases your assets.
  • Some lenders require a down payment.

It’s Time you Finance the Construction Equipment you Need

Construction companies often need to purchase new equipment, but they 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.

Camino Financial, as an equipment financing lender, offers the best small business financing, and you don’t even need an SSN or previous credit history to qualify.

Get Approved For A Heavy Equipment Loan Today


What is equipment finance?

It is a type of financing that covers equipment items you use to run your business.

How long can you finance heavy equipment?

Heavy equipment financing loans typically last from 3 to 10 years, with most requiring a 15% down payment.

Longer terms aren’t usually available since machinery depreciates quickly over time.

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, to generate the most money, a business owner must have a steady stream of revenue and a favorable debt to income ratio.

How to 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 startup cost
  5. Get required licenses and insurance
  6. Hire employees unless you’re a solopreneur
  7. Market your business to acquire clients

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