Earth Moving Equipment Financing can typically be financed through construction financing equipment such as an equipment loan or equipment lease.
For new equipment, many times the best deals on the market are through the manufacturer direct or sponsored financing programs which may even provide a discount in cost of financing under what you could other wise find in the market place. The only thing to be careful of with these types of offers is an increase in acquisition cost, especially with the major brands. So while you may be paying very little on interest rate, what is the related premium you’re paying on the asset?
In recessionary periods, this premium is going to be small if anything as there is high competition among manufacturers to move stock through their system. But when the economy is doing well, and people are more brand conscience, there can be a substantial premium built into the price.
For larger pieces of equipment there is much greater competition for lower interest rate business as there are more A lenders available for amounts over $500,000.
Regardless of credit profile, there are going to be different lending or leasing programs available to cover off the different slices of the market as every financing company strives to crave out their own unique competitive advantage.
With used earth moving equipment financing, there can be considerable interest amount equipment financing sources for items even older than ten years, especially anything that is more heavy duty in nature with a long potential useful life. The stronger the resale market is for used earth moving equipment at any one time, the better the potential deal you can secure in terms of rates and terms of repayment as the lender or lessor risk will be lower in these situations.
Earth moving equipment loans tend to only be available for A credit situations for well established businesses. Equipment leasing can cover off a much broader range of asset ages and credit profiles due to the increased ability of the lessor to manage risk through asset ownership compared with a lender only having a registered interest in a financed asset that is owned by the borrower.
If you have to acquire earth moving equipment and want to better understand what equipment financing options may be available to you, I suggest that you give us a call so we can quickly assess your situation and provide you with relevant earth moving equipment financing options for your immediate consideration.