Finance Heavy Equipment with an SBA Loan

Construction is one of the largest industries that utilize heavy equipment on a daily basis. New projects for 2018 are projected to be up 4.8% from last year, increasing collective projects to over $770M in the United States alone. Meanwhile, the forecast is even more positive with a projected 12.4% increase commercially.

Owners of small to mid-sized construction companies should take this as an opportunity to utilize a low finance option like a Small Business Administration (SBA) 504 loan through a Certified Development Company (CDC) such as TMC Financing.

Pros and Cons of Equipment Financing for Your Small Business

Financing heavy equipment for your small business comes with pros and cons. The best thing to do before making a purchase is to consider your own unique situation and what works best for you. There are many benefits to be found in financing your own heavy equipment, such as:

  • Low interest options
  • Predictable monthly payments
  • Positive impact on your business credit
  • Ownership of your equipment once the loan is paid off
  • The ability to use your equipment as collateral in the future
  • The chance to deduct the entire amount as a business expense, depending on your personal tax situation and the depreciation schedule you choose to use

On the flip side of this coin, there are a few downsides of financing your own heavy equipment to consider, especially if you are thinking about going with a conventional loan:

  • They typically involve a high down payment
  • Often times you will need good credit to get a favorable interest rate
  • You don’t have the option to exchange or upgrade equipment

California Equipment Manufacturers’ Success Story

When looking for heavy equipment financing, especially in California, consider taking a page from JRM Equipment’s book. They are a small business headquartered in San Francisco, California, and are in the business of providing quality, cost-effective construction equipment, products and related services. They have multiple certifications in the industry that can be an asset in meeting your company’s unique needs. The best part is that JRM Equipment was actually able to utilize an SBA loan for their small business in the amount of $1,850,000 for an expansion. They were able to work with TMC Financing’s 504 loan experts to secure this loan, which is something that you can utilize as well to finance heavy equipment for your small business.

Finance Heavy Equipment with an SBA Loan

The SBA 504 loan program gives you the flexibility to not only purchase land or buildings for your small business, but also finance heavy equipment with a lifespan of 10+ years, such as machinery, vehicles and construction or engineering equipment. Leasing heavy equipment through a 504 loan is a solid financing option that provides you with fixed below-market interest rates and no amortization (or balloon payments) to worry about.

If you have determined that financing is a better option for you than leasing heavy equipment for your business, an SBA 504 loan offers low rates and optimal financing.  You can find out more about the unique program from one of TMC Financing’s 504 loan experts. TMC is an SBA Premier Certified Lender, and has funded projects worth more than $9 billion across California and Nevada, resulting in the creation of an estimated 60,000 jobs. With over 35 years of experience, TMC can help you find the heavy equipment financing option that is best for your business and guide you through the 504 loan process. Contact TMC Financing today.


SVP, Business Development at TMC Financing
Anna O’Brien is a Senior Vice President of Business Development for TMC Financing, serving lenders, brokers and small businesses throughout the East Bay, San Francisco and the North Bay. As SVP of Business Development, Anna guides her clients throughout the entire loan process, helping them secure SBA 504 financing. Anna’s deep understanding of the first mortgage loan process helps her match her clients with the best lenders. Anna has many longstanding relationships with all types of first mortgage lenders.