Construction equipment financing is a very common type of business financing. In fact, construction equipment is one of the most frequently financed types of equipment within the equipment finance industry. There are numerous lenders that offer this type of financing, so do your research and shop wisely. Below are some frequently asked questions about financing construction machinery?
Who Can Obtain A Construction Equipment Loan?
Most lenders will only offer this type of financing to small business owners and larger established companies. However, some original equipment manufacturer dealers such as John Deere, CAT, Hitachi, Volvo and others will offer financing to individuals and sole proprietors.
What Are The Collateral Requirements?
For borrowers with good credit, the equipment being acquired is usually the only collateral needed to obtain financing. If your business or personal credit is not the best, then additional collateral or a larger down payment may be required.
Do I Have To Provide A Personal Guarantee?
This will largely depend on the overall credit profile and the size of the financing request. Most lenders will require any individual, sole proprietor and newer small business owner to provide a personal guarantee.
Established small business owners with many years of proven financial stability and most larger companies are usually not forced to provide a PG.
What Is The Usual Loan Repayment Term?
Every lender is different, but most lenders have the ability to accommodate any requested loan term from 12 to 72 months depending on the overall credit profile and the age of the equipment.
How Long Does It Takes To Process The Loan?
Some lenders can offer same day turn around for smaller deals under $150,000 on equipment offered from a dealership. Larger deals like the ones we focus on (normally $1 million and above) can take 2 to 4 weeks to get completed.
What Are Construction Equipment Loan Rates?
If your company is a bankable credit, then you should be able to get bank rates or close to current published rates. For companies that don't fit the bank mold or don't want to deal with the bank approval process, rates are usually a bit higher. If your company is working with a non-bank lender or broker and the offer you receive is over 20% interest you need to get in touch with us today as we can probably prevent you from signing a bad deal for your business.