Best Construction and Heavy Equipment Financing Loans
Construction and heavy equipment loans help businesses get the gear they need without having to put all the cash down up front.
| Lender | Best for | Starting rate | Amount | Term | |
|---|---|---|---|---|---|
|
Same-day funding | 6.95% (suffix) |
$5k – $250k |
18 to 24 months |
Best construction and heavy equipment financing lenders at a glance
Best for: Same-day funding – OnDeck
- Starting rate (suffix)
- 6.95%
Not so specific
loan amount disc
time in business disclaimer
term disclaimer
credit score words
- Online application available
- Same-day funding available
- Can help build business credit
- Loans require daily or weekly loan payments
- High interest rates can drive up the cost of borrowing
- Requires a UCC filing
If you need same-day funding, OnDeck might be the lender for you. OnDeck is an online small business lender offering term loans and lines of credit, both of which can be used to purchase business equipment. What makes OnDeck unique is its funding speed. While lines of credit can be funded instantly, term loans may be funded the same day in certain locations.
However, these funds will need to be repaid within two years. This is a relatively short repayment period, so you’ll need to budget around it. Also, OnDeck files a UCC lien against your business assets, which may make it more difficult to secure additional financing in the future.
In order to qualify, you’ll need to meet OnDeck’s criteria of:
- Minimum credit score:
- Minimum time in business: 12 months
- Minimum annual revenue:
What is heavy equipment financing?
Heavy equipment, also known as heavy machinery, refers to large, heavy-duty equipment used across multiple industries, including construction and farming.
Some common examples include:
- Cranes
- Excavators
- Forklifts
- Asphalt pavers
Heavy equipment financing can be used to help businesses get the machinery they need to operate. As a type of asset-based financing, the equipment itself acts as collateral to secure the loan.
Heavy equipment financing allows small business owners to spread out the cost of expensive equipment, freeing up capital for other business expenses.
Financing other types of equipment
Notably, other types of equipment that are smaller in size or don’t serve these industries, including vehicles, office equipment and items used in the food and beverage industry, can also be financed.
However, these items should be financed using traditional equipment financing loans, as they don’t require specific heavy equipment financing.Financing vs. leasing heavy equipment
Financing vs. leasing heavy equipment
When acquiring equipment, businesses often have two options: equipment financing or equipment leasing. Financing, also called an equipment loan, allows you to purchase the equipment and pay for it in monthly installments. Once the loan is paid off, your business owns the equipment and it becomes an asset on your company’s balance sheet.
Leasing is akin to renting the equipment for an extended timeframe. At the end of the lease term, your business may have the option to return the equipment, purchase it or renew the lease.
| Heavy equipment financing | Heavy equipment leasing | |
|---|---|---|
| Monthly payments | Higher | Lower |
| Monthly cost breakdown | Fixed principal plus interest | Fixed lease payment |
| Is depreciation tax deductible? | May be tax deductible | May be tax deductible depending on the lease type |
| Who owns the equipment? | The borrower | The lender |
| Can I trade in equipment or does it become outdated? | May become outdated | Can trade in |
Depreciation allows you to deduct the cost of equipment you purchase for your business on your tax return. Traditionally, this is done by deducting a portion of the cost over the course of several years.
However, the Section 179 deduction allows you to save time by taking an immediate deduction for the cost. Notably, you can only take this deduction for the tax year that the equipment was first placed in service and the amount you can deduct is limited by your wages and net business income. There is also a maximum deduction limit, which changes each year. For the 2025 tax year, it is $1,250,000.
Keep in mind that taxes vary by state, and this isn’t tax advice. If how equipment is taxed is a major factor in your decision to lease or buy, consult with a CPA to determine the best options for your business.
Pros and cons of heavy equipment financing
PROS
- Access advanced equipment you may not be able to afford out of pocket
- Predictable, recurring payments free up cash flow for other business expenses
- Potential tax write-offs can help you save on your heavy equipment
CONS
- May require a large down payment
- Some lenders may require additional collateral or a personal guarantee to secure the loan
- Equipment may become outdated and need to be replaced
How to get a heavy equipment loan
To get a business loan for construction or equipment:
-
Assess your needs and budget
Before you begin the application process, take a moment to evaluate what kind of equipment you need and how it fits your business operations. Consider things like the lifespan of the equipment, how often you will use it and the return on investment you expect it to bring. -
Get the essential documents ready
Most lenders have requirements for business loans that include a range of documents to assess your financial health and the viability of the loan. -
Research and choose the best lender
Not all lenders are created equal. Research your options, including banks, credit unions and specialized equipment financing companies. Look for those that offer favorable terms, understand the construction industry and have positive reviews or customer testimonials.
LendingTree takes the guesswork out of comparison shopping. All you need to do is fill out a short interest form with information about your business, after which one of our experienced account executives will call to give you more information about construction and heavy equipment loan products available through our extensive network of partner lenders. -
Choose a lender and submit your application
Based on the information provided, your LendingTree account executive will make a personalized recommendation on the best funding options for you. If you decide to move forward with that lender, they will help you take the next steps in the application process.
Regardless of which lender you choose, the application process may involve filling out an online form or working directly with a loan officer to collect any required documentation. Be thorough and accurate when providing information, as discrepancies can delay or jeopardize your approval. -
Review terms and finalize the deal
If your application is approved, you’ll receive an offer detailing the loan’s terms, including interest rates, the repayment schedule and any associated fees. Review these terms carefully. If everything appears satisfactory, sign the loan agreement.
If you have any questions along the way, be sure to ask them before signing on the dotted line. While this may not be the case with every financial arrangement, your LendingTree account executive will stay by your side through your loan closing, ready to lend a hand if needed.
If you plan on financing used equipment with your equipment financing loan, you may have a few extra hoops to jump through during the loan approval process.
For instance, the lender may require an appraisal to come up with an appropriate valuation of the equipment. You may have to send in photos or other information, like serial numbers, so that the lender can determine how much it is worth.
After the appraisal, your loan-to-value (LTV) ratio may also be lower, meaning you can borrow less compared to what the equipment costs. Typical LTVs for used equipment range from 60% to 85% its cost, compared to up to 100% for new equipment.
Additionally, it’s important to note that you cannot alter the loan term if the equipment breaks or becomes obsolete.
Frequently asked questions
Heavy equipment financing allows businesses to purchase essential equipment without paying the full cost upfront. The business gets a loan to buy the equipment and agrees to a structured repayment plan, typically involving monthly installments.
The credit score you need to finance heavy equipment varies depending on the lender and the loan type.
A higher credit score will generally allow you to secure more favorable loan terms and interest rates, though some lenders may offer equipment loans for bad credit.
If you have poor credit, lenders may be more open to considering your application if you make a down payment.
The length of a heavy equipment loan varies by lender. Many lenders offer loan terms up to five years. However, the SBA’s 504 loan program also provides loans for 10, 20 or 25 years.
Whether you should finance construction and other heavy equipment depends on your business’s financial situation, operational needs and long-term goals. To make the right choice for your business, weigh the benefits of owning the equipment against the costs and commitment that come with a financing agreement.
Our methodology: How we chose the best heavy equipment loans
We reviewed more than a dozen lenders to find the best heavy equipment financing companies. To make our list, lenders must meet the following criteria:
- Minimum credit score: While the lenders on this list work with a variety of credit profiles, we prioritize lenders who have a minimum credit score requirement of 680 or lower.
- Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
- Repayment experience: We consider each lender’s reputation and business practices, favoring lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers.