Heavy Equipment Financing Facts
A large amount of commercial capital is borrowed for heavy equipment financing. This is especially true for the construction and manufacturing industries. Commercial truck financing also makes up a large segment of commercial loans in the shipping and trucking industry. There are many lenders that lend for the purpose of heavy equipment financing, the trick is shopping around for the right lender that can provide you equipment financing with the best terms possible. Below, we discuss how much heavy equipment financing and commercial truck financing costs for borrowers (on average).
Cost of Heavy Equipment Financing
Heavy equipment financing and commercial truck financing falls under the “equipment financing” portion of commercial lending. The average APR (annual percentage rate) for equipment financing is between 10% to 35%. This large discrepancy is based on the borrower’s needs and risk profile. The annual percentage rate fluctuates greatly, based on the borrower’s credit history, history with the lender, and ratio metrics that the lender will evaluate to see how easily you can afford the heavy equipment financing.
Going further into the specific of heavy equipment financing and commercial truck financing, equipment financing loan repayment term ranges between one to five years, with a loan figure between the $5,000 to $5,000,000 range. The equipment acts as collateral that the lender can collect in the case of loan default.
Top Lenders for Heavy Equipment Financing & Commercial Truck Financing
We have listed multiple top lenders for heavy equipment financing that we believe have a reputable record and provide flexibility with their lending terms. It’s important to keep in mind that the longer you partner with a lender for equipment financing, the better your loan terms will be, as lenders segment your past history with them as a major portion of your risk profile.
Heavy equipment financing is one of the primary facets in commercial lending. Heavy equipment is used by the majority of small businesses across the United States. Commercial truck financing is also very prominent in commercial lending, especially in the shipping industry. Both commercial truck financing and heavy equipment financing is common do to the fact that these items have such a large cost, where small businesses would be taking a risk buying outright. Financing however, allows for a longer payment period, which gives small businesses more flexibility.