98% of heavy equipment transactions are not funded by local banks or credit unions.
Banks and credit unions are great resources for credit lines, real property loans, and personal loans – but heavy equipment is a different story. Often, used yellow iron, older machines, or high hours machines like yarders and loaders fall outside of the bank credit window. Unlike banks, we have no age or collateral restrictions. If you see value in equipment – we can help you finance it.
That brings us to bulldozers. This equipment type can be expensive, and buying a dozer outright isn’t in the best interest of all companies due to cash flow constraints this may cause, and in some cases, it may be not possible with your current budget. Equipment financing can be a great option so that you can get the equipment you need to keep growing your business. When looking at equipment financing, there is more risk involved due to the equipment being financed contributing to generating profit so that you can pay off your loan. This can contribute to higher monthly payments than you may be used to with, say, a personal automobile. It’s important to look at what your returns are going to be. Will the equipment generate revenue that will cover its monthly payment, and additional profit for you? Then the higher monthly payment is probably worth it. That being said, there can still be factors that will help reduce what your monthly payment could potentially be. Let’s take a look:
While this may not be the only thing that will determine what your monthly payments are, it does play a big role. The higher your credit score, the lower your monthly payments will probably be. Keep in mind that when credit scores start dipping into lower ranges (~650 and below) you may start seeing commercial lenders ask for higher down payments as well. If you have some time to work on fixing any credit issues and raising your score before applying, this can go a long way.
When you go through our PreQualification system here at American Equipment Financial Services, or through the websites of any of our partners, you are presented with a few term options after you submit your form. The longer the term, the lower your payment. Keep in mind, that with our programs, shorter terms will often carry a lower total payback. We recommend discussion options with your designated rep (who will reach out after you complete the PreQual).
There are a number of other factors that all play into what your monthly payments will end up looking like. If you have been in business for a couple of years, your monthly payments may be lower as a result (but don’t worry, we have programs for start-ups too). If you have comparable loans in the past, and have good pay history, this can be a huge positive when credit teams are looking over your application. Having collateral can also help make sure you secure an approval so that you can move forward with confidence.
If you do have any issues that will appear on your credit report, be ready to explain why these issues are there. This can help tremendously, especially if you have a plan on how to rectify these past issues. Don’t shy away just because you are worried that a couple issues will keep you from getting the funding you need. Here at American, we know there are people behind the application, and are interested in your story.
If you’re ready to move forward with looking for financing for your bulldozer, you can get PreQualified here, or visit our partner site that focuses specifically on bulldozer financing, so that you can get matched with a rep that can help with your specific need. If you have more questions, don’t hesitate to give us a call. We’re excited to help!