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Want a construction equipment loan? Learn exactly what lenders are looking for—credit scores, business history, income requirements, and how to get approved.
Let’s say you’ve found the perfect excavator, bulldozer, or skid steer to take your construction business to the next level. Now comes the big question: can you get it financed?
The good news is that equipment loans are often easier to qualify for than other types of business financing. But that doesn’t mean lenders hand out money without asking questions. To get the best rates and terms, you need to understand what lenders are evaluating behind the scenes.
This guide will help you walk into any loan application with confidence—by showing you exactly what lenders are really looking for when you apply for construction equipment financing.
Sure, credit scores matter. But lenders don’t stop there. Equipment financing is a collateral-backed loan, which means the machine you’re buying helps secure the loan. That reduces risk for lenders and opens the door to more approvals—even if your credit isn’t perfect.
Still, your personal and business credit history plays a role. Most lenders want to see a personal credit score of 600 or higher. Some will go lower if you’ve been in business for a while or show strong cash flow.
Check your credit before applying and clean up any errors. You can request free reports at AnnualCreditReport.com, the only site authorized by federal law.
1. Creditworthiness
This includes your credit score, payment history, and any red flags like bankruptcies or tax liens. A clean record, even with average credit, goes a long way.
2. Time in Business
Lenders prefer businesses that have been operating for at least 6 to 12 months. Why? It proves you’re established, not a fly-by-night operation. Newer businesses may still qualify—especially with strong personal credit or a co-signer.
3. Business Revenue and Cash Flow
Expect to show 3–6 months of business bank statements or tax returns. Lenders want to see that you have enough recurring income to cover the loan payments.
4. Type of Equipment
Believe it or not, lenders care a lot about what you’re buying. Machines that hold value well—like Caterpillar, Komatsu, or John Deere excavators—are easier to finance. They’ll also want to know if it’s new or used, and whether the equipment comes with warranties or maintenance records.
5. Down Payment Amount
While some lenders offer zero-down programs, most require 5%–20% down, especially for used equipment. A larger down payment can improve your approval odds and reduce your monthly payments.
Want to stand out as a borrower? Show up with the right documents. Most lenders ask for:
Having these ready makes the process faster and shows the lender you’re serious. For additional preparation resources, the SBA’s guide to loan readiness is a useful tool.
If your business is new or your credit score isn’t where you want it to be, don’t panic. Lenders consider the whole picture, and there are several ways to strengthen your application:
Alternative lenders, especially those specializing in construction financing, often have more flexible guidelines than traditional banks.
Lenders are cautious by nature. Here are a few things that can kill your chances—or jack up your rates:
If you’re unsure whether your equipment is eligible, check valuation sites like RitchieSpecs to verify current market value and spec support.
One of the best ways to approach equipment financing is to get pre-qualified before you shop. This helps you understand how much you can borrow, what terms to expect, and what type of equipment fits your budget.
Some lenders even offer soft pull pre-approvals—meaning your credit isn’t impacted during the pre-qualification stage. That allows you to compare options before locking anything in.
Derrick owns a grading business in Missouri and wanted to add a second skid steer. He had solid revenue but a credit score just under 620. He worked with a lender who evaluated his last 6 months of bank statements and offered flexible payment terms based on seasonal cash flow. By providing a 10% down payment and choosing a model with high resale value, Derrick secured funding in 48 hours—despite not qualifying at a traditional bank.
The key? He knew what lenders were looking for and tailored his application to match.
Getting approved for a construction equipment loan doesn’t have to be complicated or intimidating. Once you understand what lenders are evaluating—and you prepare accordingly—you can position your business for success.
Looking for expert help navigating your options? Contact National Legacy Capital Group. Their team specializes in construction equipment financing and can help you find terms that work for your business today and tomorrow.
Can I get approved with less than perfect credit?
Yes. Lenders consider the full picture—credit, revenue, equipment type, and more. Some specialize in working with credit scores as low as 580.
Do I need to provide collateral?
The equipment itself serves as collateral, so you don’t usually need to pledge other business or personal assets.
How long does the loan approval process take?
With the right documentation, approval can happen in as little as 24 hours, with funding shortly after.
Can I finance used equipment?
Absolutely. Most lenders allow financing for equipment under 10 years old, depending on the model and condition.
