At TheBroker.Finance, I help business owners finance many different types of new and used equipment.
I work with a large network of lenders, and one of the biggest advantages of that is that they do not all look at a transaction the same way.
Some lenders are very credit-driven.
Others care more about business revenue.
Some want a larger down payment.
Others may be more aggressive on certain types of equipment.
That is why equipment financing is not always as simple as applying with one lender and hoping they approve the deal.
The goal is to look at the full transaction and figure out which lender makes the most sense.
What Types of Equipment Can Be Financed?
A wide variety of business equipment may qualify for financing.
Examples include:
- Excavators
- Bulldozers
- Skid steers
- Backhoes
- Cranes
- Tow trucks
- Semi trucks
- Dump trucks
- Box trucks
- Cargo vans
- Trailers
- Restaurant equipment
- Medical equipment
- Dental equipment
- Manufacturing equipment
- Machine shop equipment
- Printing equipment
- Landscaping equipment
- Agricultural equipment
- Construction equipment
- And much more
The lender will usually look at the equipment itself along with the strength of the borrower and the business.
Some lenders are comfortable with older equipment.
Others may have age or mileage limits.
Some lenders will finance private-party purchases.
Others may only finance equipment being purchased from a dealer.
This is why it helps to know where to send the deal before submitting the application.
New & Used Equipment Financing
Equipment does not always have to be brand new.
Many lenders finance used equipment as long as the equipment fits their guidelines.
Factors that may matter include:
- Age
- Condition
- Mileage or hours
- Equipment value
- Seller
- Type of equipment
- Purchase price
A lender may be more comfortable financing a five-year-old excavator than a fifteen-year-old piece of specialized equipment with limited resale value.
Again, every lender is different.
If you are purchasing used equipment, I usually want to know what you are buying, how old it is, what it costs, and who is selling it.
From there, we can determine which lenders may be a fit.
Equipment Financing With Bad Credit
Bad credit does not automatically mean you cannot get equipment financing.
Credit is important, but it is only one part of the transaction.
Some lenders may also look closely at:
- Monthly business revenue
- Time in business
- Down payment
- Equipment value
- Purchase price
- Bank activity
- Cash flow
- Existing debt
- Additional collateral
- Overall strength of the business
I work with programs that may consider borrowers with credit scores in the 500s and, depending on the rest of the transaction, sometimes even lower.
For example, a borrower may have weak personal credit but operate a business that has been around for years and generates strong monthly revenue.
That is very different from a brand-new business with weak credit and very little revenue.
The credit score may be similar.
The transaction is not.
That is why the entire file needs to be reviewed before deciding whether financing is realistic.
Need help with a difficult equipment financing deal? Call or text Shawn at (714) 271-8524 or email Info@TheBroker.Finance.
How Much Down Payment Is Required?
There is no one answer.
Some stronger borrowers may qualify with little or no money down.
Other transactions may require 10%, 20%, 30%, or more.
The amount of down payment can depend on:
- Credit
- Time in business
- Monthly revenue
- Equipment type
- Equipment value
- Age of the equipment
- Purchase price
- Existing debt
- Overall risk of the transaction
A larger down payment can sometimes help make a difficult deal work.
It reduces the lender’s exposure and shows that the borrower has more money invested in the transaction.
In some cases, a larger down payment may also help offset weaker credit.
Equipment Financing for Startups
Startups can be more difficult to finance because the business does not have a long operating history.
That does not mean a startup has no options.
Some lenders are willing to finance newer businesses, but the requirements may be different from programs available to established companies.
The lender may look more closely at:
- Personal credit
- Owner experience
- Down payment
- Type of equipment
- Industry
- Business plan
- Cash reserves
- Overall strength of the transaction
A startup borrower with strong credit, experience in the industry, and money available for a down payment may have more options than a borrower with weak credit and no experience.
There are also situations where a startup can qualify based on other strengths in the deal.
The important thing is to look at the full picture.
Private-Party Equipment Financing
Many business owners assume they have to buy equipment from a dealer in order to get financing.
That is not always true.
Some lenders will finance equipment purchased from a private seller.
These transactions usually require more documentation than a dealer purchase.
That may include:
- Bill of sale
- Proof of ownership
- Equipment photos
- Serial number or VIN
- Condition information
- Equipment valuation
- Seller information
The lender wants to make sure the seller actually owns the equipment and that the equipment has enough value to support the transaction.
Private-party deals can work, but they need to be structured correctly.
Construction Equipment Financing
Construction equipment is one of the areas where I see a lot of financing requests.
That may include:
- Excavators
- Bulldozers
- Loaders
- Skid steers
- Backhoes
- Cranes
- Pavers
- Graders
- Dump trucks
- Other heavy equipment
Construction equipment can sometimes be easier to finance than specialized equipment because it may have stronger resale value.
That does not mean every deal will be approved.
Credit, revenue, time in business, down payment, and the equipment itself still matter.
But for the right transaction, there can be multiple financing options.
[Learn More About Construction Equipment Financing]
Truck Financing
Commercial trucks are another major area of equipment financing.
This can include:
- Semi trucks
- Tow trucks
- Dump trucks
- Box trucks
- Cargo vans
- Flatbed trucks
- Work trucks
- Trailers
Truck financing can vary significantly depending on the type of truck, age, mileage, use, and borrower.
Some lenders specialize in transportation.
Others may be more restrictive.
If you are trying to finance a truck and have lower credit, I usually want to know the purchase price, mileage, business revenue, time in business, and how much money you have available for a down payment.
[Learn More About Truck Financing]
Sale-Leaseback Financing
If your business already owns equipment, you may be able to use that equipment to generate working capital through a sale-leaseback.
In a sale-leaseback transaction, a financing company purchases the equipment from your business and leases it back to you.
You continue using the equipment, but the business receives cash from the transaction.
This can be useful for businesses that have a lot of money tied up in equipment but need cash for payroll, inventory, expansion, repairs, or other expenses.
The amount available usually depends on the type of equipment, value, condition, ownership, and overall strength of the transaction.
[Learn More About Working Capital]
Equipment Leasing vs Equipment Financing
People often use the terms equipment leasing and equipment financing interchangeably, but they are not exactly the same thing.
With equipment financing, the borrower is generally financing the purchase of the equipment.
With a lease, the structure may be different depending on the lender and program.
Some leases are designed to give the business ownership at the end.
Others may have different buyout options.
There are advantages and disadvantages to both.
The right choice depends on:
- Cash flow
- Tax considerations
- Equipment type
- How long you plan to keep the equipment
- Financing terms
- Overall business goals
[Learn More About Equipment Leasing]
What Do Lenders Look At?
Every lender has different underwriting guidelines, but common factors include:
- Personal credit
- Business credit
- Monthly revenue
- Time in business
- Bank activity
- Equipment type
- Purchase price
- Down payment
- Existing debt
- Cash flow
- Collateral
- Industry
- Equipment value
One lender may decline a deal because of credit.
Another lender may be more comfortable because the business has strong revenue and a good down payment.
That is the advantage of working with multiple financing sources.
How Fast Can Equipment Financing Be Completed?
The time it takes to complete a transaction depends on the deal.
A straightforward transaction with a strong borrower, clean documentation, and standard equipment may move quickly.
More complicated deals can take longer.
Examples include:
- Private-party purchases
- Older equipment
- Challenged credit
- Larger transactions
- Additional collateral
- Unusual equipment
- Missing documentation
The faster the borrower and seller provide the required documents, the faster the lender can usually complete the transaction.
What Information Do I Need to Get Started?
You do not need to have everything before contacting me.
It helps to start with:
- Type of equipment
- Purchase price
- Seller
- New or used
- Time in business
- Approximate monthly revenue
- Approximate credit score
- Amount available for a down payment
- Existing business debt
From there, I can usually get a pretty good idea of what programs may be worth looking at.
Why Work With a Broker?
When you go directly to one lender, you get one lender’s answer.
That lender may be a perfect fit.
Or they may not be the right lender for the deal at all.
As a broker, I work with multiple lenders that specialize in different types of equipment, credit profiles, industries, and transaction sizes.
The goal is not to send your application everywhere.
The goal is to figure out which lenders are most likely to make sense for the deal.
That can save time and help avoid unnecessary applications with lenders that are unlikely to approve the transaction.
Need Equipment Financing?
If you are trying to purchase equipment and are not sure whether you qualify, the easiest thing to do is tell me about the deal.
Let me know:
- What you are buying
- How much it costs
- How long you have been in business
- Approximate monthly revenue
- Approximate credit
- How much money you have available for a down payment
From there, I can look at the situation and help determine which financing options may make sense.
Call or text Shawn at (714) 271-8524 or email Info@TheBroker.Finance to discuss your equipment financing needs.
[Contact Shawn]
[Explore Business Financing Options]
All financing is subject to lender approval, underwriting requirements, documentation, equipment eligibility, program availability, and lender-specific conditions.