The Basics of Heavy Equipment Financing

Heavy equipment is used in a variety of industries, from construction to agriculture. However, big and powerful equipment tends to be expensive. Smaller businesses can’t always afford to buy a piece of heavy equipment outright. If they need the equipment long-term, renting might end up costing them more in the long run even if it's more affordable. In these kinds of situations, financing heavy equipment is often a viable alternative.

Leasing Vs. Financing

First, decide whether you want to lease the heavy equipment or finance it. Generally speaking, it doesn’t make sense to lock yourself into a long-term financing agreement if you only plan to use the equipment for about a year or less. In this case, an operating lease is usually a more cost effective option. However, if you plan to use the heavy equipment for several years, then it will continue to be an asset even after the loan has been paid off. In the latter situation, financing is typically your better option.

Allow Time for the Financing Process

The next factor to consider is the timeframe of when you’ll need the money for your equipment purchase. Lenders need time to gather and analyze information about your finances, credit score, and income level. That’s why it's usually best to start applying for a loan as soon as you know that you’ll need one. 

How Do You Qualify for the Best Loan Terms? 

Generally speaking, if you want to get better terms for your heavy equipment loan, the best way to accomplish that is to make yourself less of a risky proposition to lenders. Thankfully, there are many ways to do this. One thing you can do is to save as much as you can in advance so that you can make a larger down payment. The bigger the down payment, the less you’ll have to pay in the long term. Also, review your budget to determine how much you can afford in heavy equipment loan payments per month. If you can demonstrate that you’ve carefully thought this decision through, you’ll often be able to get better terms on your loan.

The Bobcat Specialists at Triangle Equipment Group will guide you through the process with our lenders. It’s our goal to get everyone approved – and we work with a range of credit profiles. We operate dealerships in Morrisville, Garner, and Wilmington, North Carolina, as well as Myrtle Beach, South Carolina. We also carry both new and pre-owned heavy equipment, along with offering rentals, parts, and service.