Construction equipment financing

Construction equipment is the largest category of equipment financed in the country, and the one with the deepest used market: for most machines there are more good used units for sale than new ones. iFinancial Group finances construction equipment new, used, from a dealer, an auction or a private seller, with the attachments on the same approval, on a one-page application. No tax returns and no audited financial statements to apply, no minimum and up to $1,000,000.

Who you're dealing with

iFinancial Group has funded equipment since 1997, roughly $600 million of it, in all 50 states. We're a direct lender, not a broker, so the file is underwritten in house and not shopped around. Our customers have ranged from independent manufacturers to global technology companies. We've barely advertised in almost three decades. The business came from repeat customers, referrals, and vendors sending us their customers.

Hours, not miles

A machine's age is measured in hours on the meter, and the meter matters more than the model year. A five-year-old excavator with 3,000 hours is a young machine; the same one with 9,000 hours is near its first major rebuild. That's how the value gets set, how the term gets set, and how a used machine gets reviewed. A newer machine with low hours supports a longer term; an older machine with high hours is written shorter so the payments end while the machine still has value.

On most construction equipment there is no title. The lender's claim is a UCC filing against the machine by serial number, which is a public record filed with the state, and it's released when the last payment is made. It covers the machine, not the business's other assets.

What goes on the same approval

The machine rarely arrives alone. Buckets, a thumb, a hammer, forks, a grapple and the quick coupler are part of the equipment and go on the same approval, from the same dealer or a different one. So does machine control, the GPS and grade control system that can add $30,000 to $80,000 to a dozer or an excavator; it's financed with the machine it's mounted on.

Freight from the dealer or the auction yard, assembly, an extended warranty and operator training are soft costs and can ride on the same deal, on many deals up to 30% of the total. One financing for what it takes to put the machine on the job.

Dealer, auction, private party

The used construction equipment market runs through dealers, through the large equipment auctions and between contractors directly, and we finance all three. An auction purchase moves fast: the hammer falls, payment is due in days, and the machine has to be off the yard. An approval here holds up to 60 days, so a contractor can be approved before the sale and bid with the financing already in hand.

On a private party sale, the bill of sale, the serial number, a lien search showing the seller owns the machine free and clear, and proof of payment are what the review works from. On a dealer sale it's the invoice. Either way the machine is inspected on hours, undercarriage or tires, the hydraulics and the service history, the same way a buyer would inspect it.

Rental conversions

A lot of machines get bought after being rented. A contractor rents an excavator for a job, the job turns into a season, and the dealer offers to apply some of the rent toward a purchase. That rental purchase option can be financed here like any other purchase: the invoice shows the purchase price net of the rent credit, and the financing covers that number. It's one of the more common ways a growing contractor's first owned machine comes into the fleet.

Seasons and Section 179

Dirt work stops when the ground freezes in half the country. Where the year is uneven, the payment can be too: seasonal and deferred structures are written for exactly this, and a machine delivered in the off season can start paying when the work does.

Construction equipment generally qualifies for the Section 179 deduction in the year it's placed in service, which is why the fourth quarter is the busiest buying season in the business. Confirm the treatment of your own purchase with your tax advisor.

Machines covered

How it works with iFinancial Group

It's the same one-page application whether the equipment is small or the deal runs to $1,000,000: no tax returns and no audited financial statements to apply, no minimum and up to $1,000,000. Decisions typically come back within 24 hours, and an approval holds up to 60 days. New and used equipment, terms up to 84 months, and soft costs up to 30% so freight, setup and training can go in the same deal. Payment structures beyond level payments are there when the equipment earns unevenly. We've been doing this since 1997, in all 50 states.