If you own or manage a construction business, you know how important it is to have the right equipment. High-quality construction machinery allows you to get more done in less time for maximum efficiency with exceptional results. The right equipment also makes your job site safer for employees and pedestrians.
If you're looking to add new construction equipment to your fleet, financing is a flexible payment method that helps you mitigate financial risk.
Construction equipment financing is the process of securing a loan or a lease to buy a machine for your business. Taking out a loan involves borrowing funds from a lender and paying them back with interest over a specified period — usually several years.
With a lease, you pay a certain amount of money per month to use the equipment. The vendor remains the owner of the equipment for the duration of the lease. At the end of the term, you have the option to return the equipment to the vendor or purchase it. Construction equipment leasing is an excellent way to try out a machine before you buy it.
When you apply for a loan or lease, the bank, credit union or other institution handling your financing evaluates your credit score, debt-to-revenue ratios and the amount of time you've been in business to determine if you are a good candidate for the loan. The exact paperwork you'll have to submit depends on your specific lender. Typically, you'll need to provide documents like a copy of your driver's license, bank statements, tax returns and a price quote from your equipment vendor.
After you submit your information, the financer runs a credit check. The approval process usually takes several days to a week to complete, but this time frame could be longer depending on your equipment and the financial institution.
A low credit score doesn't automatically disqualify you from getting a loan or lease. The advantage of having a higher score is that you often receive lower interest rates, more flexible terms and other benefits.
Heavy equipment financing for those with bad credit is more favorable than other types of funding. In a purchase situation, the equipment you're financing is collateral, so if you default on your loan, the lender can use the equipment to recoup their losses.
If you can show improved business revenue trends or offer a down payment, you increase your chances of approval with bad credit.
Small businesses typically don't have the deep pockets that larger companies do, which means small business owners have to make prudent financial decisions. Financing new equipment spreads out the expense over regular recurring payments while allowing you immediate access to the machine. A regular payment schedule also makes budgeting more straightforward.
Renting construction equipment through The Cat® Rental Store is a great way to secure new machinery for your business temporarily without making a large financial commitment. Give us a call at 1-800-RENT-CAT or search our dealer network's inventory online to find the right products for your needs and request a quick rental quote.Find The Cat Rental Store Near You