Key takeaways
- Construction equipment's strong resale market generally supports longer terms and lower down payments than less liquid asset types.
- Both new and used equipment are financeable, though used equipment carries a shorter maximum term tied to remaining useful life.
- A signed contract or backlog can strengthen a financing application, especially for newer construction businesses.
Construction equipment — excavators, dozers, cranes, and other heavy machinery — tends to hold its value well and has an active resale market, which generally works in a borrower's favor when it comes to financing terms.
What's different about financing construction equipment
- Resale value: because used construction equipment has a strong secondary market, lenders are often comfortable with longer terms and lower down payments than for less liquid asset types.
- New vs. used: both are financeable, though used equipment may come with a shorter maximum term tied to its remaining useful life.
- Seasonality: lenders familiar with construction understand that cash flow can be seasonal, and some programs offer structured or step payments to match.
- Contract-backed revenue: businesses that can point to signed contracts or a backlog often strengthen their case with a lender.
Getting matched with the right lender
Not every equipment lender actively finances heavy construction machinery, and the ones that do vary widely in the rates and terms they offer. Five North Capital works with institutional lenders that specialize in construction equipment, so your inquiry goes to a lender that already understands the asset — not one learning as they go.
Related: Construction Equipment Financing
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