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Yes, you can finance used construction equipment. Learn how it works, what lenders look for, and the pros and cons for small construction businesses.
New equipment isn't always the best equipment—especially when your business is growing, your jobs are seasonal, or your margins are tight. That’s why many small construction firms turn to used equipment: it's often significantly cheaper and still capable of handling the work.
But what if you can’t—or don’t want to—pay for that used excavator or loader upfront? Can you still finance it?
The short answer is yes. Financing used construction equipment is not only possible, it’s often a smart move. But there are key differences in how lenders view used versus new machines, and knowing those ahead of time can save you from surprises.
Here’s everything you need to know before financing used equipment for your construction business.
Used equipment can offer serious value—if you know what to look for. According to Equipment Trader, well-maintained used machines often retain 70–80% of their functional life at 40–60% of the original cost.
Benefits of going used:
Of course, used machines also come with trade-offs—like shorter remaining life, limited warranties, and sometimes higher maintenance costs. That’s where financing can help you manage risk while preserving capital.
Lenders do finance used equipment. But they tend to be more cautious, and the terms may differ slightly from new equipment loans.
Key differences:
Some lenders will even require a third-party appraisal or valuation—especially for higher-ticket items like cranes or bulldozers.
Used equipment loans function similarly to new equipment loans. You borrow a fixed amount to purchase the machine, and the equipment serves as collateral. Most loans are fully amortized with predictable monthly payments.
You can also lease used equipment—especially if you're buying from a dealer that offers refurbished inventory. In 2025, more leasing companies are expanding into used markets due to rising equipment prices and supply chain constraints.
Requirements typically include:
For a full checklist, visit the SBA’s guide to loan preparation.
While it’s possible to finance a used machine from a private party, lenders generally prefer certified dealers for a few reasons:
If you're buying from a private seller, be prepared to provide more documentation, including photos, service logs, and possibly a third-party inspection.
1. Know the Equipment’s Value
Use tools like RitchieSpecs or IronPlanet to verify fair market pricing before committing to a loan. Overpaying can hurt your financing application and ROI.
2. Prepare a Larger Down Payment
Lenders may consider the machine higher-risk due to age, so offering a 15–25% down payment can make the deal more attractive—and lower your monthly payments.
3. Bundle Accessories or Transport
Need a trailer, bucket, or hydraulic attachment? Some lenders allow you to finance multiple items under a single loan.
4. Ask About Lease Options
Some leasing companies offer lease-to-own programs for used gear, especially from authorized dealers. This gives you time to test the machine while working toward ownership.
5. Look for Flexible Terms
If you’re operating seasonally, ask for seasonal payment schedules or deferred payment options. Lenders that specialize in construction understand these cycles.
Mike runs a small excavation business in the Pacific Northwest. He found a lightly used 6-ton excavator through a dealer for $49,000—less than half the price of new. Instead of draining his savings, he financed it with a 3-year loan, putting 15% down.
The lender required an inspection and dealer invoice, but approved the loan within 48 hours. Mike had the machine delivered to a job site the following week, and the monthly payments came in well below what he was spending on rentals.
That one purchase helped him secure three additional contracts.
Always get a written agreement and request a bill of sale from the seller.
Used construction equipment offers massive value for the right businesses. And financing makes it easier to acquire what you need—without tying up your working capital.
The key is to work with a lender that understands the construction space, knows how to evaluate used machines, and can tailor terms to fit your business model.
Need help sourcing used equipment and structuring a smart financing deal? Contact National Legacy Capital Group. Their team works with contractors across the country to provide fast, flexible funding—whether you're buying brand new or finding value in the pre-owned market.
What’s the maximum age for financing used equipment?
Most lenders cap financing at 10–12 years old, depending on the equipment type and condition.
Can I finance from a private seller?
Yes, but you'll need more documentation, and the process may take longer. Dealer purchases are generally faster and easier to finance.
Is leasing available for used equipment?
In many cases, yes—especially if the machine comes from a dealer with a certified pre-owned program.
What’s the interest rate for used equipment loans?
Rates vary by credit and lender but tend to be slightly higher than for new equipment—typically ranging from 8% to 16%.
