Heavy Equipment Loans For Bad Credit
Equipment financing is a method in which a business owner takes out loans to fund the purchase of large-scale equipment. Certain industries are more reliant on equipment than others. Thus it is vital to define your goals and expectations before pursuing an equipment loan. If you are in the construction space, heavy equipment loans can be critical. However, you may worry that you’ll be unable to qualify due to bad credit. Don’t worry; even with a bad credit history, there are still plenty of equipment financing options available to you.
If you are in the market for heavy construction equipment, then you are very likely a contractor. A contractor is a party that is hired to assist with the development of a project. A construction company will first hire a general contractor whose role is to manage and oversee progress. The general contractor then hires specialized subcontractors to carry out specific duties, including the implementation and operation of heavy equipment.
Heavy machinery and heavy-duty vehicles are key components of any B&C job. They are also extremely costly. It is for this reason that construction companies do not own their own heavy equipment. As a contractor, you rely upon the integrity of your equipment to make money. So if equipment wears out and breaks down, as is the case over time, purchasing replacements can deal a massive blow to your working capital.
This is where equipment financing can be massively beneficial. Purchasing heavy equipment is near impossible without a financial partner to lend you the funds to do so. Another great benefit is the fact that you won’t have to put up any collateral. Equipment loans are self-secured, so the heavy equipment purchased with the loan will provide the collateral to back the amount.
When it comes to acquiring an equipment loan, there are two routes that you can take. The first is traditional financing. Traditional lenders are federally backed institutions like banks. These large institutions are typical places that business owners turn to for loans. The process of acquiring a loan through a bank is an arduous one. Banks often have very long application processes. Things can drag out, and it can take weeks or even months to get your money, assuming that you are approved.
Getting approved for a loan from a bank is exceedingly difficult. Your business must have existed for at least five years. It would be best if you had a lot of consistent revenue flowing in and out of your business⸺upwards of $500K annually. You also need to have outstanding credit.
On the other hand, alternative lenders are more relaxed when it comes to their requirements. So, if you are someone with bad credit, there’s no need to worry. Alternative lenders will overlook poor credit and approve you for a heavy equipment loan as long as you’ve been in business for at least a year and have $100K in annual revenue. Another huge benefit of going through an alternative lender is the speed at which you can get the money. Alternative lenders like Pelagic can get you approved within days.
As previously mentioned, you can use equipment loans to replace old worn-out heavy equipment. But there are other reasons to use equipment loans, such as growth. If you are looking to expand and need additional vehicles, that will be quite a hefty purchase. The average cost of a bulldozer ranges from 30,000 all the way up to 200,000. Just buying one of those is going to be a massive expense. If you need to buy multiple, then you are going to require some help.
At Pelagic, we can provide the assistance you need in the form of equipment financing. Pelagic is the optimal online space for small business loans. We have lenders that serve the B&C space. We can get you the money you need to fund the purchase of a bulldozer or a new truck and trailer. If you have any problems with your credit, that shouldn’t be an issue either. We will do everything we can to assist you with the acquisition of your heavy equipment, and we can get you the money to fund 100% of the cost. Our loan specialists are standing by, ready to walk you through every step of the way. Give us a call at 1-800-824-2407. If you need any more information on equipment financing for heavy equipment, click here.