Tags: Business Loans

Running a construction company can come with enough worries and headaches, your equipment shouldn't be one of them. The equipment you need is expensive but next to manpower, they are the heart of the company.

Acquiring the equipment is expensive and you may not have the capital to buy them. Leasing is an option but can be more expensive in the long run. You can find help in buying your equipment with equipment loans.

Equipment loans can help you get the new or used equipment you need without using up all your company's capital. You can keep that money where you need it and still get your heavy equipment.

Buying vs Leasing

Leasing your equipment might seem like a smart and cost-effective way to get the heavy equipment you need, but look again. If you only need the equipment occasionally, then maybe leasing is the way to go for you.

Buying the equipment is better for you if you are confident you will be working regularly and consistently. The equipment will pay for itself in no time. Plus, with leasing, you may run into problems with the equipment actually being available when you need it.

Leased equipment is stored, repaired and maintained by the leasing company, but owning it means you don't have to waste time going to get it, wait for it to be ready. It's also inconvenient to have leased equipment if you are trying to finish a job within a certain timeframe.

Leasing over time can be a really big cost, and end up costing you much more than you actually got out of the lease. Leased equipment may not be deductible on your income taxes and damaging leased equipment costs can be exorbitant.

Equipment Loans

If you are looking at buying your heavy equipment, you will likely need equipment loans. This will allow the business owner to own their equipment, and that is an asset to any company. You can lease them out if you want during low times and they allow deductions from income taxes.

What are Equipment Loans?

Business loans for equipment are exactly that. They are meant to help business owners obtain the equipment needed for their business. This can cover offices, farms, construction, large, expensive printing equipment and many needed for hospitals.

These can be obtained from a bank or a finance company that gives loans expressly for equipment. This leaves any cash free for the other needs and is just smart equipment financing.

How Equipment Loans Work

Getting equipment loans for the big purchases is a very smart way to own the equipment and set up a reasonable payoff time that suits you.

The financing can be set for up to 100% of the value of the equipment and the lender will set the terms of your equipment loan based on the life expectancy of that equipment.

It's great for heavy equipment, as they tend to have a longer life than something like a computer or printer. Your heavy equipment can withstand a lot of work for many years, allowing you to pay off the loan before the equipment has depreciated.

Do I Qualify?

Usually, the qualifications for heavy equipment loans are the same as equipment financing as for most types of small business loans. The main reasons for being turned down would be a bankruptcy claim or other collectors with claims, like child support.

The lender will consider the business owner's length of time in business, personal credit score, repayment history and the company's cash-flow. This will also depend on your down payment and other collateral.

One of the great things about equipment loans is that you can use the equipment that you are financing as collateral. This is very helpful, as you don't have to tie-up other collateral or find more cash.

Do the Math

Before you head in for your equipment loans, you need to figure out how much you will need. You will have to have a list of the equipment and their prices. You should also figure out which, if any, you can do without.

You can also get really good equipment used, from sales, an auction or from a company selling off or going out of business. It's a good idea to keep an eye on these types of sales, as you can save a lot of money.


An equipment loan is easier to get than other types of loans and should require less documentation.

What you will typically need are:

  • Business tax returns for up to 6 months
  • Business licenses
  • Bank statement for the past 3 months
  • Basic business and personal information
  • Business balance sheets
  • Invoice for installation and delivery

This is just a basic guide and you may require additional information for your application. It can vary depending on your credit rating, the amount needed, type of equipment and a variety of other factors.


There are other costs to be factored in as well, not just the equipment. There will be the maintenance and the insurance to consider, as well as the storage and security of the equipment and any other repairs, spare parts, and operator costs.


Your down payment will likely be 5% but could run as high as 20%. However, with a larger sum down and more than the minimum required payments, you can own the equipment outright within a short period of time.

Caring for Your Equipment

Once you have the equipment, you want to take care of it. You want them all in top performing state. Proper maintenance will keep them working, extend their life and ensure they are as safe as can be, as well.

1. Educate the Operators

Training doesn't just stop with what level moves what. It's required that you provide a safe environment and safe equipment. Knowing how to run the machine must come with the safety of the operator and the people around them.

The equipment will be kept in better condition when it's run by someone who knows what they are doing and uses care and caution. Always make sure they have proper training and certificates.

Safety has to come first when lives are at stake every day. No two ways about it, it has to be your priority. It has to be everyone's priority. It only takes one misstep to change several lives forever.

2. Clean the Equipment

There are all kinds of debris that can get inside the working parts of your new equipment. Nails, mud, rocks, dust, and dirt, even chunks of wood or plaster. Not only can they stick to the machines, but they can also cause damage.

The paint can become chipped or scratched and this can lead to rust. Pieces of debris inside the wheels or engine can cause a lot more damage and can cause serious injury.

Set up a schedule for regular maintenance and cleaning, as well as after each use. It might be a nice way to get your kid off the couch and get him to work. Nothing says, 'education matters' like scrubbing muck off a large truck.

3. Replace Your Tracks and Tires

Keeping these parts in great working order is important for safety and performance. They go over a lot of rough terrains and can become damaged. Keeping these in top working order is beneficial to the rest of the machine.

If you have someone onboard who can look after these, that is great, but you will likely need to hire a company to keep on top of these. Regular maintenance of these parts will extend the life of the machine and ensure it gives you the best performance possible.

4. Don't Push the Equipment Too Hard

You have an operator's guide for a reason, so don't just assume the machine is actually capable of doing more than specified. This can lead to injuries, damage the machine, and even cause the machine to conk out prematurely.

These pieces of equipment are built to last and built to take a good day's work, but they can only do so much, so keep it within the manufacturer's limits. Don't let it overheat. If it does, it's time for a break.

5. Storage

Keeping the equipment clean and maintained won't help if you don't have safe and secure storage for the machines. Keeping them safe from the elements and from theft or vandals is just as important and checking on the parts.

Investing in a covered space that locks and weatherproofing is your best option. Covering them with tarps or canvas is also great for keeping them dry and clean. It helps extend the life of the equipment and it keeps you safe while using the machine.

Do your Homework

Get all of the information you can, find out about the best places to get the equipment loan, look for some used equipment and make sure everyone is trained and certified. These things will matter when it comes to loans, insurance, and warranties.

Safe and well-maintained equipment keeps accidents and damage costs down and keeps your insurance from skyrocketing. Safe and well-educated operators do exactly the same, plus it makes sure everyone makes it home for dinner.

Call about rates and find out if you are eligible for an equipment loan. You have enough to worry about with your new business, your equipment shouldn't be one of them.


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