The best equipment financing for a construction company depends on the size of the purchase and how fast you need it: Merchant Fund Express, our recommended funder, covers down payments, used auction equipment and urgent repairs; National Funding finances new or used equipment up to $150,000 with no down payment required; the SBA 504 is for long-life heavy machinery on long terms; the SBA 7(a) combines equipment and working capital; Bank of America handles large purchases from $250,000; and the dealer may have the best deal on new, brand-name equipment.
In construction, equipment is the difference between winning and losing a job. But it's also expensive, wears out fast and sometimes only works a few months a year. This guide helps you choose how to pay for it without the payment eating your margins.
Key takeaways
- Before you finance, count how many days a year the machine will actually work: if it's few, renting may come out ahead.
- National Funding finances new or used equipment up to $150,000, up to 100% of the cost with no down payment required, per its site.
- The SBA 504 funds machinery with a remaining useful life of at least 10 years, on 10, 20 or 25-year terms through a CDC.
- Since March 1, 2026, SBA 7(a) and 504 loans require every owner to be a U.S. citizen or U.S. national.
- The financing term shouldn't run longer than the machine's useful life.
- Our recommended funder often decides in 2 to 4 hours and covers what an equipment loan won't: down payment, transport or repairs.
The 6 best equipment financing options for construction
- Merchant Fund Express (recommended funder). Best for what a traditional equipment loan doesn't cover, or doesn't cover in time: the down payment on a machine, a used excavator at an auction that closes this week, hauling costs, or an engine repair in the middle of a job. Amounts run $5,000 to $5,000,000, decisions often come in 2 to 4 hours, credit starts at FICO 500 and, in most cases, there's no collateral. It reviews your sales and deposits, not just your score. Applying is free with no impact to your credit, Spanish-speaking support is available and ITIN applicants are accepted (no SSN needed).
- National Funding (equipment). Best for mid-size purchases: skid steers, mini excavators, compactors, trailers or a work truck. It finances new or used equipment up to $150,000, up to 100% of the cost, with no upfront fees and no down payment required, and it mentions the Section 179 deduction. It says most of its customers have a FICO of 600 or higher (per its site, checked October 2026).
- SBA 504 loan. Best for heavy machinery you'll use for many years. It finances long-term machinery and equipment with a remaining useful life of at least 10 years, on 10, 20 or 25-year terms, with a rate tied to Treasury bonds. It runs through a Certified Development Company (CDC) together with a bank. It can't be used for working capital or inventory. If you qualify, an SBA loan usually costs less.
- SBA 7(a) loan. Best if you need equipment and working capital in a single long-term loan. It can be used to buy and install machinery and equipment, and the maximum is $5,000,000. Since March 1, 2026, 100% of the direct and indirect owners on a 7(a) or 504 must be U.S. citizens or U.S. nationals whose principal residence is in the U.S.
- Bank of America (equipment). Best for established builders making large purchases. Its equipment financing starts at $250,000 with terms up to 7 years and is handled through a specialist (per its site, checked October 2026). For a single mini excavator, that minimum is usually too high.
- Dealer or manufacturer financing. Best for new, brand-name equipment. Many dealers offer their own financing or seasonal promotions. Compare them with the other options and read carefully what happens with the factory warranty, required maintenance and the end-of-term value.
Comparison table
| Option | Amount | Term | Used equipment | Speed | Key requirement |
|---|---|---|---|---|---|
| Our recommended funder (#1) | $5,000 to $5,000,000 | Depends on the offer | Yes, for any business purpose | Decision often in 2 to 4 hours | FICO 500+, sales and deposits |
| National Funding | Up to $150,000 | Not listed in its overview | Yes | Funds in as little as 24 hours after approval | Most customers FICO 600+ |
| SBA 504 | Large projects | 10, 20 or 25 years | With 10+ years of useful life | Weeks or months | Citizen or national owners |
| SBA 7(a) | Up to $5,000,000 | Long | Depends on the bank | Weeks or months | Citizen or national owners |
| Bank of America | From $250,000 | Up to 7 years | Ask the bank | Weeks | Banking history |
| Dealer | Depends on the equipment | Depends on the promotion | Sometimes | Days | Buyer's credit |
How we chose
How we rank. No ratings and no points. We compare every option on the same criteria: speed, minimum time in business, minimum credit, whether it accepts an ITIN or owners without an SSN, required documents, amounts and collateral. Company facts come from each official site, and if we couldn't confirm something, we left it out. Read the full methodology in how we rank business funding options.
For construction equipment we add one more test: the term shouldn't outlast the machine's useful life. Still making payments on a compactor that's already dead is one of the most expensive mistakes in the trade.
Buy, finance or rent? A practical rule
Not every piece of equipment is worth buying. Before you ask for financing, answer these:
- How many days a year will it work? If a machine is busy almost every week, buying usually wins. If you only need it on a few jobs, renting may be cheaper.
- Is the job that needs it already signed? Financing a machine for a job you haven't won yet is risky.
- Can you maintain it? An excavator without maintenance loses value fast, and the payment stays the same.
- What's it worth used? Some makes and models resell well, which lowers your risk.
- What does your accountant say? Section 179 and depreciation can change the real cost of buying; confirm with your accountant.
How to pitch the purchase to a funder. In construction it helps a lot to show up with a clear story: which machine, for which jobs, how much it saves you on rentals or subcontractors and how long you'll use it. Bring the seller's quote with make, model, year and hours; your signed contracts or a list of upcoming projects; and your bank statements. If you rent that same machine today, show what you pay in rent each month: it's the best argument that the financing payment fits your operation. And if your business is seasonal, explain how you cover the rainy or cold months; a funder would rather hear it from you than find it in your statements.
Our guide to equipment loan vs. lease can help too.
Which equipment to finance with what
| Equipment | Option that usually fits | Why |
|---|---|---|
| Large excavator or crane | SBA 504, bank or dealer | High amount and long useful life |
| Mini excavator, skid steer, compactor | Equipment financing | Mid-size amount; the machine backs the loan |
| Dump truck or work truck | Equipment or vehicle financing | Fixed payments with the vehicle as backing |
| Trailer, scaffolding, tools | Equipment financing or working capital | Smaller amounts |
| Used machine at auction (closes soon) | Fast working capital | Timing is everything |
| Repair on a machine you already own | Working capital | There's no new equipment to finance |
For more on structuring heavy equipment deals, read construction equipment loans for contractors.
Common mistakes when financing machinery
- Financing for more years than the machine lasts. Match the term to its real useful life.
- Forgetting insurance. Almost every equipment financing deal requires you to insure the machine; build it into your numbers.
- Not inspecting used equipment. Ask for hours, maintenance records and, if possible, an inspection by a mechanic.
- Buying with payroll money. If you use your working capital for the down payment, you can end up short on cash to pay your crew.
- Not comparing the dealer's offer. A low-rate promotion can come with a higher machine price.
Our recommendation
For heavy machinery you'll run for many years, compare the SBA 504 and your bank first: they usually cost less. For mid-size purchases, equipment financing is the cleanest path. More options in our guide to equipment financing for construction.
For the down payment, a used machine that's gone by Friday or an urgent repair, our recommended funder is Merchant Fund Express, which offers Spanish-speaking support. You can apply online in minutes; it's free and won't affect your credit. Prefer Spanish? Leer en español.
Frequently asked questions
Can I finance used construction equipment?
Yes. National Funding, for example, says it finances new or used equipment up to $150,000. The SBA 504 requires machinery to have a remaining useful life of at least 10 years. For used equipment, bring the hours, maintenance history and the bill of sale or title so the funder can value the machine properly.
Do I need a down payment to finance an excavator?
It depends. Some equipment funders finance up to 100% of the cost with no down payment required; banks and the SBA usually ask for a share. If you're asked for a down payment and don't have it, fast working capital can cover it, but make sure you can handle both payments at once.
Can I get skid steer financing with bad credit?
It's possible. In equipment financing, the machine itself backs the loan, which helps. Merchant Fund Express accepts FICO 500+ and reviews your sales and deposits. With bad credit, expect pricier terms and make sure the payment fits your slow months, including winter or the rainy season.
Which is better for a construction company: SBA 504 or 7(a)?
The 504 is for large fixed assets, like machinery with 10+ years of useful life or a building, on 10, 20 or 25-year terms. The 7(a) is more flexible: it covers equipment, working capital and other uses in one loan. Both now require every owner to be a U.S. citizen or U.S. national.
How long does equipment financing take?
With an online equipment funder, it can be a matter of days; National Funding mentions funds in as little as 24 hours after approval. Our recommended funder often decides in 2 to 4 hours. The SBA and banks usually take weeks, so plan ahead for big purchases.
What documents do equipment funders ask for?
Generally, the equipment quote or invoice, 3 to 6 months of business bank statements, ID, your EIN and company documents. For large amounts or SBA, add tax returns and financial statements. If you have signed construction contracts, bring them, since they show the work the machine will pay for.