Do you need help with machine financing but don’t know where to start?
Bulldozers are one of the most common types of equipment needed for a construction business. They’re also among the most expensive pieces of equipment out there.
It comes as no surprise that most construction business owners may want help with machine financing for bulldozers. With so many options available, many business owners can get confused as to which option best suits them.
It’s time to shed some light on this common construction business dilemma. So, in this blog, we’ll be discussing the best machine financing options there are for business owners looking to finance a bulldozer.
A Business Owner's Guide to Bulldozer Financing
If you own a construction company, you know how important it is to have a bulldozer. With that in mind, being able to do machine financing properly for it should be important to you too.
In fact, machine financing for a bulldozer is a staple process in the construction business. This is because bulldozers are needed for various construction jobs, such as land clearing and road building.
Unfortunately, they’re also costly, so most small-to-medium construction companies can’t outright buy them. That’s why machine financing is necessary.
Learning how to do machine financing for heavy equipment such as bulldozers can greatly benefit you in the long run. That’s because they can generate future profits that equal or even exceed their cost of acquisition.
But before you can get to generating profit with a bulldozer, you’ll need to know how to do machine financing for it. Specifically, we should start with tips on what to remember when machine financing for a bulldozer.
Tips to Remember in Machine Financing
Although machine financing may appear too expensive, you don’t have to worry. In fact, a large sum of your income will come with the help of your equipment.
This means that your equipment can eventually start paying for itself in the long run.
Because of this, you should take proper steps to choose your equipment and machine financing. These steps are crucial if you don’t want to have machine financing complications in the future.
To help you, I’ve narrowed down what you need to remember during machine financing for your bulldozer. Keep these reminders in mind when beginning your journey to machine financing:
Have the necessary paperwork. - Paperwork could include records of your accounts and current contracts, as well as assets and sales.
Clear up reasons for denied applications. - Find out the exact reason why you’ve been denied in order to rectify the problem for the future.
Maintain your machinery. - Your machinery counts among your assets and may be subject to inspection by equipment lenders. They usually do it to get a sense of your capability to maintain your equipment.
Find better residuals. - Most equipment financing companies are more eager to finance machinery bought from brands that have an established residual value. If you structure your bulldozer with a FMV buyout and the brand is established you could recognize a much lower payment over the course of your term.
Ensure a lengthy warranty. - A long warranty can serve as security to the equiment financing company that the machinery will not break down and prevent you from earning money.
What are the Bulldozer Tax Benefits under a $1 buyout lease?
When you structure your bulldozer financing on an equipment financing agreement or on a $1 buy out lease agreement you get section 179 tax benefits. With the passage and signing into law of H.R.1, aka, The Tax Cuts and Jobs Act, the deduction limit for Section 179 increases to $1,000,000 for 2019 and beyond. The limit on bulldozer equipment purchases likewise has increased to $2.5 million.
Payment Scenarios for Bulldozer Machine Financing
With the necessary papers ready to be presented, you can start choosing machine financing options. Luckily, many equipment financing companies such as Trust Capital make it easier for you to understand what type of payment scenario best suits your business.
To start off, an equipment leasing company needs to assess the risk associated with your business. This means that you need to provide them with the following information:=
Credit Score and credit history
Time in Business
New or Used Equipment
As long as the previously mentioned categories are in order (you have a good credit score, have a good business record, etc.), it will be easy for you to negotiate with an equipment leasing company for the best rate, term and structure of your equipment lease. If you’re worried about low scores that you might have, most equipment financing companies still have options available for you to negotiate with.
Choosing a machine financing payment option, however, will be up to you. To help you out, here are some payment scenarios that you can expect.
Financing As a 2-Year-Old Business
The first scenario assumes that you are an at-least-2-year-old business with decent credit. Alongside that status, you are also looking to finance a $100K bulldozer.
If your credit score is above a 680. The estimated monthly payments you would have to make based on the duration of your lease with one payment due up front and a $1 buyout would be:
2 Years Lease - $4,498/mo
3 Years Lease - $3,110/mo
4 Years Lease - $2,420/mo
5 Years Lease - $2,050/mo
Financing As a Startup Business
Another similar scenario can be considered, but now assuming that you are a startup company. This is a common scenario because most startup companies finance their equipment.
If your credit score is above a 680. The estimated monthly payments you would have to make based on the duration of your bulldozer lease with first payment up front and a $1 buyout buyout would be:
2 Years Lease - $4,745/mo
3 Years Lease - $3,375/mo
4 Years Lease - $2,685/mo
5 Years Lease - $2,300/mo
Computing for Your Monthly Payments
There are other factors that you should be mindful of when computing for your machine financing payments. These other factors that may affect your monthly payment are:
Length of the bulldozer lease term
Cost of bulldozer
Business & personal credit history
The number of years you’ve been in business
You shouldn’t worry if you think that you have a far different scenario compared to the examples given in this article. If you want to test out a different scenario, you can use this machine financing calculator by Trust Capital.
You might also find yourself in a situation where your credit is bad or business financials are not yet in order. If that’s the case then you may have to pay a larger down payment or higher monthly repayments.
This still ensures that you will be able to get access to a bulldozer to help you generate more income. It will eventually start paying for itself while also generating additional profit for your company. If you're a start up you generally have to have above a 650 FICO score to qualify.
Final Thoughts on the Best Bulldozer Financing Options Around
In this blog post, we talked about how machine financing a bulldozer can seem like a huge step for any construction business owner.
However, bulldozers are used often enough in construction businesses in order to be considered important enough to finance. Even startup companies can feel safe when machine financing for bulldozers because these machines can become huge assets to the company.
Luckily, companies like Trust Capital can provide you with ideal payment scenarios that can fit your company’s needs. So, if you need to know more about machine financing for bulldozers, you can contact Trust Capital at (866) 458-4777.