Everything You Need to Know About Financing Used Heavy Equipment
Do you know you have financing options for used construction equipment? Buying outright can be a hefty investment, so don’t overlook financing that will be easier on your wallet. Whether you’re expanding your fleet or simply replacing older equipment, this guide to used construction equipment financing will help you find the right fit!
1. Traditional Loans
Traditional financing through a bank or credit union is one of the most common ways to purchase used heavy construction equipment. With a loan, you’ll typically pay a down payment, usually 10-20% of the equipment’s total cost, and then make monthly payments over a set term period.
Key Benefits
Traditional loans are perfect for businesses that need equipment for long-term projects and aren’t scared of committing to one type of machine. Loans allow you to buy a piece of equipment right away without the financial strain of a typical purchase.
2. Used Equipment Leasing
Leasing gives you access to the equipment you need- without the commitment of an outright purchase. You’ll negotiate the lease terms before you sign, allowing you to customize the length and type of agreement to your liking.
Types of Used Equipment Leases
Operating Lease: Lower monthly payments. At the end of the lease, you can return the equipment, renew the lease, or upgrade to something newer.
Capital lease: Higher monthly payments, but with the option to buy the equipment at a lower cost once the lease is up.
Key Benefits
Leasing used construction equipment is a flexible option that allows you to buy or upgrade to a newer machine at the end of your term- or move on from the equipment entirely. The low upfront costs are a selling point, plus your leasing agreement usually covers maintenance fees. This is a great financing option for seasonal jobs, short-term projects, or businesses that need to switch out machines frequently.
3. Rent-to-Own
Rent-to-own programs give you the flexibility of renting with the option to buy. You start with a rental agreement, giving you access to the equipment you need without the upfront investment of a purchase. If the machine proves to be a great fit, a portion of your rental payments can be applied toward buying the equipment.
Key Benefits
Rent-to-own programs offer flexibility and low upfront costs. If the used equipment is the right fit, rent-to-own makes it easy to buy when the time is right. This is a great option for businesses who are unsure about their long-term equipment needs or simply want to try something out before they purchase.
4. Dealer Financing
Many equipment dealers and online marketplaces offer direct financing for used heavy construction equipment. This will be the most accessible financing option for many, as working with the dealer allows you to cut out the middleman- like a bank or leasing company.
Key Benefits
Dealer or marketplace financing streamlines the purchase process, allowing you to work with one company rather than a seller and a third-party financer. Dealer financing is great for those who prefer a simple, one-stop transaction.
Conclusion
Whether you choose a traditional loan, a lease, a rent-to-own program, or decide to work directly with a dealer, these used equipment financing options make it simple to get your hands on a machine without the stress of an outright purchase.
Interested in financing options or used construction machines for sale? Fused has you covered with a wide selection of used equipment and a team of experts who can answer your questions.