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Do You Need Heavy Equipment Financing?
May 8, 2022 jun Strategy Session

If you’re running a business in construction, maintenance, mining, farming, food production or an operation that requires large machinery, you might need heavy equipment financing.


Heavy equipment financing is different to normal equipment leasing and refers to construction equipment like cranes, loaders, forklifts, bulldozers, cement mixers or other machinery that you might need a special licence to operate.


Conversely, equipment financing includes other things like computers, furniture, supplies or even cars.


Typically, there are two options when purchasing heavy equipment – financing or leasing.


When you lease equipment, you normally don’t put any money down and simply pay a monthly fee to rent the equipment for a certain period of time. At the conclusion of the repayment period, you can typically return the equipment, renew the lease or buy the equipment.


With a heavy equipment loan, you may need to put down a deposit to borrow the rest of the funds to purchase the equipment. At the end of the loan term, you own the equipment outright.


If you’re using equipment for a short period of time, it might be beneficial to simply rent the equipment and replace it in the event that it becomes outdated. For larger equipment that is critical to your business long-term, using a heavy equipment loan and ultimately purchasing the machinery might be a better option.


There might also be tax benefits to purchasing the equipment and it will be an asset for your business. Depending on how much working capital you have and your ability to borrow, a loan could be a good option.


In most circumstances, the equipment itself will act as collateral for a loan, however, you will still need to qualify for finance with the lender.



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