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Important Heavy Equipment Buying Tips Business Owners Need To Know

If your a construction company or trucking business owner, you know how expensive it is to buy heavy equipment. Middle of the road construction excavators can be as high as $200,000. Larger construction equipment can be in excess of half a million dollars. This can be tough on budgets for business owners.


Most business owners, or new business owners won’t shell out $500,000 and call it a day. You will most likely be looking for heavy equipment financing, also known as construction equipment financing. This lets you finance heavy equipment, and pay off the loan as your business matures.


You can get a loan for new or used equipment, and most business owners will opt for used, due to the decreased finance amount. Now financing isn’t exactly easy. Afterall, you are getting a loan that is the equivalent of a mid-size to large home.


The following heavy equipment buying tips can serve as your finance guide for future equipment loans. Let’s dive in!

Know the difference between heavy equipment and equipment financing

There are a lot of financing options out there for construction company owners, or new construction business owners. This makes it critical to know the exact type of loan you need to get the right type of equipment.


There is indeed a difference between heavy equipment financing and equipment financing. Equipment financing can be for just about anything a business needs, like a printer or desk, for example. Heavy equipment financing is for the big equipment that moves earth from one place to another.


The types of heavy construction equipment can be excavators, backhoe loaders, bulldozers, crawler loaders, and more. Know exactly what type of loan you are applying and the details that go into it before wasting your time.

Applying for your loan

Buying heavy equipment via financing requires a bit of paperwork and due diligence on your part. If you are eligible for financing, you will need to prepare the following documentation to apply and get the process going.


  • Financial statements that outline your revenue, profits, etc.
  • At least six months of bank statements for your business account
  • Business, as well as personal tax returns
  • Copy of your driver’s license
  • A business check (voided)
  • Completed loan paperwork provided by the financing institution or business
  • The quote or invoice for the heavy equipment


This may seem like a lot of needed documentation, but it’s necessary. Remember, it is like purchasing a home due to the big price tag. The process is different from every financing company or bank, so ensure you have all your paperwork in order to streamline the loan approval process.

Do you qualify for heavy equipment financing?

Ensuring that you qualify for heavy equipment financing is important. In many cases, you may not know until your loan application is approved, or not approved. The good news is that it isn’t too difficult to be a good financing candidate. But there are a few ways to check in-house to see if you qualify, and potentially take steps to qualify in the future.

Your credit score

The first thing to check is your credit score. As expected, loan companies and banks check your credit score to ensure you have a track record to pay back the money owed. For heavy equipment financing, a credit score of 630 or above will do the trick. This can vary by lender, but mainly it will work. You also need to have been in business for a year or two.

Your business is profitable

Credit score aside, a lender will want to know that your business is making money. And that it will continue to do so in the future. If your business is making more than enough to pay the loan off, you are on the right path to qualifying for financing. In fact, the profitability of your business alone could be the major deciding factor.

How much can you put down?

Like all financing, the higher upfront payment you have, the better chances of qualifying. The best way to know if you are in the ballpark is to think of the loan as a house loan. If you have 20 percent of the total amount of the loan, you can have no problem at all receiving financing. Even 10 percent with a great credit score and profitable business can be what a lender needs to approve a heavy equipment loan.

Wrapping up . . .

Getting the money you need to buy heavy equipment for your business is important. More equipment can help you get the job done faster, as well as help your company scale. Financing can be challenging, but as long as you have your loan ducks in a row, you should receive that approval without issue. Do you have any financing tips or tricks? We want to hear from you.

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