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Learn how to qualify for heavy equipment financing as a small business. Discover key requirements, tips to strengthen your application, and lender expectations.
Heavy equipment is the backbone of many small construction businesses—but with machinery costs that can easily run into the six figures, most business owners can’t afford to pay out of pocket. That’s where heavy equipment financing comes in.
The good news? Equipment loans and leases are some of the most accessible forms of financing for small businesses. The better news? You don’t need perfect credit or years in business to qualify.
This guide breaks down exactly what lenders look for, what documents you’ll need, and how to improve your odds of approval—whether you're financing your first skid steer or expanding your fleet of excavators and dump trucks.
Compared to traditional business loans, equipment financing carries less risk for lenders because the equipment itself acts as collateral. That means lenders are often more flexible about credit score and revenue history than they would be for an unsecured loan.
According to the SBA, equipment loans are particularly helpful for small businesses looking to upgrade or expand without depleting working capital.
Even if you’re a newer business or have less-than-perfect credit, you likely have options.
Every lender has its own criteria, but here are the most common requirements for heavy equipment financing:
1. Credit Score
Most lenders prefer a personal or business credit score of at least 600. The higher your score, the better your interest rate and terms.
If your credit is below 600, you may still qualify—especially if the equipment is new or highly valuable. Providing a larger down payment or bringing on a co-signer can also help.
2. Time in Business
Ideally, lenders want to see that you’ve been in operation for at least 6–12 months. However, some financing companies work with startups, especially if the owner has strong credit or industry experience.
3. Annual Revenue
Lenders typically want to see that your business generates enough revenue to support the loan or lease. While requirements vary, many look for at least $10,000–$15,000 per month in gross revenue.
4. Equipment Type and Value
The make, model, age, and condition of the equipment matter. Newer machines are easier to finance and may qualify for longer terms. Used equipment can be financed too, though lenders may set age limits (usually under 10 years).
5. Down Payment
Some lenders offer 100% financing, but many require a down payment of 5%–20%, especially if your credit is average or if the equipment is used.
To streamline the application process, gather the following documents in advance:
If you're a startup without extensive financial records, you might also provide a business plan or projected income to help lenders evaluate your repayment ability.
Check the SBA’s loan prep checklist for more guidance.
Even if you don’t meet every lender requirement today, there are several ways to strengthen your application and increase your chances of securing financing.
1. Improve Your Credit Score
Before applying, check your credit report for errors and pay down high-interest debts. Even a modest improvement in your score can lower your interest rate and reduce your total cost of financing.
2. Offer a Down Payment
The more you contribute upfront, the less risk the lender takes on—and the more favorable your loan terms will be.
3. Choose Equipment That Holds Its Value
Well-known brands and popular models tend to retain value better, which makes lenders more willing to finance them.
4. Work With Specialized Lenders
Not all lenders understand the construction industry. Consider working with a company that specializes in equipment financing for small businesses—they’ll be more familiar with your needs and challenges.
5. Keep Your Financials Organized
Clear, accurate financial documents show lenders that you’re serious and capable of managing repayments. If your records are messy, it might be worth working with a bookkeeper before you apply.
In general, leasing is easier to qualify for than a traditional loan—especially if your business is young or your credit is average. Leases tend to have lower monthly payments and less stringent approval criteria, making them a good option for startups or contractors with inconsistent cash flow.
Learn more about how leases work in this Investopedia breakdown.
However, if long-term ownership is your goal and you’re able to meet the lender’s requirements, a loan will typically offer a better ROI over time.
If you have all your documentation ready, approval can happen surprisingly fast. Many lenders provide decisions within 24 hours, with funds available in as little as 1–3 business days. That means you can finance equipment quickly when a job is on the line.
Dealers and vendors may also offer in-house financing or work with preferred lenders to speed up the process even more.
Ben, a contractor in Colorado, needed a new compact track loader to expand his grading business. His business was only 9 months old, and his credit score was 645. Rather than wait another year, he applied for an equipment loan through a specialized financing partner.
He provided three months of bank statements, a signed quote from his equipment dealer, and a 15% down payment. He was approved for a 5-year loan within two business days, and the loader was delivered the following week. That machine allowed him to bid on three new jobs—and win two.
His success wasn’t about perfect credit. It was about preparation and the right financing partner.
Qualifying for heavy equipment financing as a small business isn’t just possible—it’s well within reach. With the right documentation, a realistic budget, and a little preparation, you can secure the machinery your business needs to thrive.
Don’t let outdated equipment or a limited budget hold you back from bigger contracts and higher profits. If you're ready to grow, connect with National Legacy Capital Group. Their team specializes in helping small contractors get the funding they need—quickly, honestly, and with terms that work.
Can I get approved if I have bad credit?
Yes. Many lenders offer options for borrowers with credit scores as low as 600. You may need to provide a larger down payment or consider a lease.
Do I need collateral beyond the equipment?
In most cases, the equipment itself serves as collateral, so no additional business or personal assets are required.
Can I finance more than one piece of equipment at once?
Yes. Some lenders allow multiple items on a single loan, or you can apply for a line of credit specifically for equipment purchases.
Is there a minimum loan amount?
This varies by lender, but most equipment financing providers have minimum amounts starting around $5,000 to $10,000.
