Heavy Equipment Financing

What Is Heavy Equipment Financing?

Heavy equipment financing refers to loans for business owners who need to buy pieces of large machinery. This financing option is popular in the farming, landscaping, and construction industries because the equipment needed comes at a steep price.

Heavy equipment can be quite costly (especially for small or new businesses), but it's also necessary for day-to-day operations. Many times, having the right equipment is crucial to compete in the industry and can mean getting big projects that pay well.

Fortunately, you can get the large machinery you need through funding from equipment financing lenders as opposed to heavy equipment leasing. These business loans provide the capital your business needs to buy machinery upfront.

Many businesses take out a loan to pay for their heavy equipment purchases — they can use working capital to cover day-to-day business needs. Construction companies use heavy equipment financing to buy machineries like dump trucks, steamrollers, bulldozers, or cranes.

If you're interested in buying equipment for your business, we'll help you understand if a heavy equipment loan is the right financing solution for you. If so, we're experts at getting the funding you need quickly.

Benefits of Heavy Equipment Financing

Most growing businesses need to upgrade and replace heavy equipment at some point or another. At Clarify, we've streamlined our processes to make purchasing new and used equipment as easy as possible for borrowers. We're passionate about providing quick approval on heavy equipment financing for qualified business owners.

Competitive APR

Compared to term loans, equipment loans are generally considered lower risk. Because of this, you can finance used and new heavy machinery for low rates, starting at just 7% APR.

Financing Available Up to 100%

Most banks only provide up to 80% of heavy equipment value, leaving small businesses to cover the difference with their own cash reserves. At Clarify, we provide financing for up to 100% of heavy machinery costs.

No Hidden Fees

Transparency is a fundamental company belief. We never include prepayment penalties or sneaky loan terms. What you see is what you get.

Get Approved With Any Credit Score

We understand that not everyone has perfect credit. Unlike SBA loans or lines of credit that may have strict credit requirements, credit scores of 550 and above can be approved for equipment financing.

Minimal Paperwork for Approval

We strive to make documentation quick and easy. Unlike traditional banking institutions that tend to be paperwork-heavy on credit approval and annual revenue, Clarify only requires your last three months of bank statements.

No Collateral Needed

With heavy equipment financing, you don't have to worry about a personal guarantee or collateral. The equipment you're buying or leasing can be used as security for the loan.

Apply for Heavy Equipment Financing

Heavy Equipment Financing Uses

You can use heavy equipment financing to buy any pre-owned or new equipment needed for business operations. You'll typically receive around 80% to 100% of the heavy machinery's full value. The equipment serves as loan collateral; you own it free and clear once you've paid off your debt.

Business owners commonly use heavy equipment financing to purchase construction equipment like:

• Backhoes
• Forklifts
• Cranes
• Loaders
• Excavators
• Heavy vehicles
• Pavers
• Dump trucks
• Bulldozers
• Feller bunchers
• Wheel tractor scrapers
• Skid steers
• Trenchers
• Cement mixers

How Does Heavy Equipment Financing Work?

With heavy equipment financing, you receive a loan that covers around 80% to 100% of the equipment's cost. You won't have to provide a large down payment or collateral because the equipment you're buying serves as financing collateral.

You make monthly payments toward your construction equipment financing until it's paid back. Each financing program has its own repayment terms, which may vary by lender, loan amount, and type of equipment you're buying.

You typically finance a piece of equipment for its expected life span, which is somewhere between two and seven years. Some lenders may cut this off at five years (especially for used or less expensive equipment), while others may give you 10 years to repay the loan.

Most businesses use this type of business financing to invest in machinery they need long term. Once the loan is fully paid, you have complete ownership of the heavy machinery. This means you can keep using it for as long as it is operational.

What Are the Eligibility Requirements for Heavy Equipment Financing?

When you apply for heavy equipment financing, lenders consider:

Average monthly income

The best way to qualify for a loan is to show you can repay it. Lenders typically approve loan applications quicker when you generate at least $10,000 per month in revenue.

Time in business

Lenders prefer you be in business for at least six months.

Equipment value

Your repayment terms and the loan amount will also depend on the value of the heavy equipment you plan to buy.

Credit rating

At Clarify Capital, we recommend that your credit score is at least 550 to facilitate quick loan approval.

If your credit is less than stellar, contact us directly and speak to a Clarify adviser so we can help you look at other options. Since the equipment serves as collateral, credit scores aren't as big a factor for equipment financing as they are with other types of loans.

Apply for a Heavy Equipment Loan

What to Look For in a Heavy Equipment Financing Company

Part of running and growing your company is ensuring you have enough cash flow for all of your business expenses. This includes getting competitive rates and terms if you're financing heavy equipment.

Here's what to look for in a heavy equipment financing company.

Competitive APRs

Since equipment loans are generally considered lower risk, you can finance used and new heavy machinery for low rates. At Clarify Capital, we work with over 75 lenders, so you can compare term loans to find the best rate. We offer heavy equipment loans starting at just 7% APR.

Ability to Finance the Equipment's Full Value

Even though your bank may offer equipment loans for small businesses, they may only provide up to 80% of the total cost (which you'll have to cover with your own cash). With Clarify, you have access to alternative lenders (e.g., online banks) that may provide financing for the heavy machinery's full cost.

No Hidden Fee

Pay close attention to down payment requirements, origination fees, and other hidden fees. Ensure your interest rate and repayment period are also specified.

At Clarify, we don't include prepayment penalties or vague terms because we believe in transparency. That's why you have a dedicated Clarify adviser who walks you through the application process.

They'll help you choose the best loan option for your business needs and ensure you know what you're getting into before agreeing to any loan.

Discover How Clarify Capital Helps You Get the Equipment You Need

As a business owner, you have to make careful decisions regarding managing your business's cash flow. You have to be strategic in approaching large purchases to afford to buy the equipment you need and still fund day-to-day operations. You know that if you use up all available cash in a single asset, you may be unable to cover other expenses or handle emergencies.

This is why equipment financing is one of the best ways to fund the equipment your business needs to operate. You can also use it when upgrading or replacing large machinery.

At Clarify Capital, we've streamlined our processes to make purchasing new and used equipment as easy as possible. We're passionate about providing quick approval on heavy equipment financing for qualified business owners. Complete an online application today and get your funding in as little as 24 hours.

FAQs about Heavy Equipment Financing

Here are answers to most common questions that business owners have about financing their heavy equipment purchases.