How Do I Get Financing for Heavy Equipment?

Companies looking to obtain financing for heavy equipment have several options at their disposal. Depending upon the financial strength and creditworthiness of the company, it can potentially qualify for a business loan. As an alternative, the company may be able to arrange to lease the equipment, or take advantage of an option known as "invoice factoring." Regardless of the scenario, there are numerous options available to those looking to acquire financing for heavy equipment.

Financing options exist for many different types of heavy equipment and applying is generally a quick and seamless process for companies. Many financing companies claim to issue approvals in as little as 48 hours. Even companies that do not have the best credit can still potentially qualify for some level of financing for heavy equipment, depending upon their cash flow and outstanding accounts receivables.

The first method of available financing for heavy equipment is a secured business loan. Many companies need to acquire heavy equipment such as bulldozers, cranes, and excavators in order to meet the growing demands of their business. If a company has a good financial balance sheet and is not overwhelmed with outstanding debt, it may be possible to qualify for a business loan from a local bank that specializes in heavy equipment financing. The benefit of obtaining a business loan is that once it is paid off, the company will own the equipment outright.

Depending upon the goals of a company, it may choose to bypass a conventional business loan, instead opting for an equipment lease. This type of financing for heavy equipment is common as it allows companies to acquire various types of equipment for a limited time. Leasing may also provide the company with more benefits in terms of tax deductions and write offs. Unlike purchasing, leasing heavy equipment allows companies to upgrade their equipment on a regular basis, as they are not responsible for the equipment once the lease has expired.

Invoice factoring is another popular method of acquiring financing for heavy equipment. Companies that need to raise the funds to purchase heavy equipment can sell their outstanding invoices and freight bills at a small discount in order to receive cash immediately. This method of financing is beneficial for many companies as they can avoid long-term debt and monthly payments, while still being able to acquire the heavy equipment that they need for their business needs.