So you’re wondering how to finance a crane -- or perhaps how to lease one.
Well, let’s start by saying crane financing and leasing can help many construction companies. Both of them can help you improve the quality of your operations without too much financial risk.
Crane financing or crane leasing can help you either boost or support operations while balancing your budget. That’s if you get a good deal on your crane financing or crane leasing, of course.
Many equipment finance and crane leasing companies offer flexible payment options now, luckily. You can get reasonable rates if you meet their minimum requirements.
It’s still worthwhile to calculate the possible costs involved, though. That’s why today, we’ll talk about how to finance a crane and the cost of financing and leasing a crane and help to grow your business.
Projected Cost If You Finance a Crane or Lease a Crane
First off, there isn’t an exact cost “everyone” can expect when financing a crane or leasing a crane. The cost will depend on certain variables -- such as your business’s status or the crane lender’s terms.
However, you can project or estimate the cost. You can do that if you inquire with the equipment financing company you’re hoping to work with.
The best way to work out projected costs is to understand crane financing, though. That’s why we’ll go over how to finance a crane first.
Things to Know Before You Finance a Crane
How to finance a crane? Well, the process isn’t exactly typical as far as equipment financing goes.
Learning how to finance a crane is different from learning to finance many other types of heavy equipment. That’s because cranes aren’t cheap.
If you finance a crane, you might borrow anywhere from $200,000 to $1M in low interest rates. That’s not pocket change!
That can make crane financing a little complicated. Equipment lenders will do more than just check your credit history and bank statements.
For example, the lender might ask questions regarding your cash flow, budget, cash on hand, and loan payment history.
They’ll do this to see or check if your crane business is capable of repaying the money you’re borrowing.
Also, there will be more requirements and higher qualifications than for most other types of equipment financing options. Despite that, you shouldn’t worry too much.
You see, many equipment financing companies may still approve your financing online application even if you barely meet their qualifications. That’s because cranes serve as excellent collateral.
New cranes have a lot more value than other types of cranes. Thus, the equipment financing company can still sell the crane you financed for a reasonable amount of money if you do default on your loan.
Prepare Your Business to Finance a Crane
So, the answer to how to finance a crane is largely this -- the crane business owners should learn how to prove your ability to repay crane lenders for crane financing of their construction business.
That can help you get good rates. It’s also important if you want to get approved quickly.
Anyway, one of the best ways to do it is to build your D&B (Dun & Bradstreet) score. A duns number will make or break you in business credit. A Paydex score is 82% of your business credit. Experian credit is the other 28%. It's your business identifier number for your business credit. Apply for your Duns number at https://www.dandb.com/ You can go online and get one for free in thirty days. You don't have to buy credit builder to get your duns number. You can contact D & B at 866-705-5711 and tell them you're applying for federal grants contracts and you need a duns number and they will give you a duns number on the spot with no solicitations. You can purchase credit builder and you will get the number. You can buy credit builder lite for $199 and you can start adding your vendors for them to add to your report to start building a Duns file.
You want to get a high Paydex score with Dun & Bradstreet, you can do this by having more than five years in business, having over 25 employees, paying your net 30 vendors up front and/or on time. Your owners address is the sames as the business address. You can state to them you have 5 to 50 employees. You can state to them your financials. They will go to great lengths to make sure you exist though. It benefits you to tell them you've been operating 4-5 years even if you're a start up. Tell them you were a sole proprietor prior to incorporating.
Dun & Bradstreet is a corporation that offers information on commercial credit and reports on businesses. Having a good D&B credit score proves that you can meet your financial responsibilities.
To improve your D&B score, try to work with vendors that report to D&B. Establish business credit so that you can get higher amounts when you apply for financing.
Here's a list of vendor's that you can start getting credit with that will report your business to the D & B.
- OfficeMax.com for business and office supplies. Automatically reports to D & B
- Officedepot.com for business furniture and office supplies. Automatically reports to D & B
- www.pens.com/ for business promotional items. Reports to D & B when verified by D & B
- Tadaccounting.com for accounting services. Reports to D & B when verified by D & B
- Tigerdirect.com for computers. Automatically reports to D & B
- Staples.com for business furniture and office supplies. Minimum two years in business. Automatically reports to D & B
- UPS.com for shipping services, no personal guarantee required. Automatically reports to D & B.
- Frys.com for electronics, TV's, computers and monitors. No personal guarantee required but will report to D & B when verified by D & B.
- Fedex.com for mail and shipping services, no personal guarantee required. Automatically reports to D & B.
- Dell.com for computers and monitors. No personal guarantee required, automatically reports to D & B.
- Superfleet.net for business and fleet gas card. Automatically reports to D & B.
- Exxon.com for business and fleet gas card. Net 30 terms. Automatically reports to D & B.
- Phillips66.com for business and fleet gas card. Automatically reports to D & B..
- Paychecks.com for payroll services. 800-322-7292. Reports when asked too.
- Pitneybowes.com for shipping services. Reports when asked too.
- Compusa.com for computers net 30. Automatically reports to D & B.
- PREPAIDLEGAL.com for business legal services. Automatically reports to D & B. When verified by D & B 7757
- Radioshack.com, for radios, headphones, etc. Automatically reports to D & B.
- Sears.com for business tools, PG required. Automatically reports to D & B.
- Sinclairoil.com for business and fleet gas card. Automatically reports to D & B. 800-340-3466
- americanexpress.com/ for a business credit card. Automatically reports to D & B.
- Bestbuybusiness.com for appliances and computers. Automatically reports to D & B.
- ADP.com for payroll and HR services. Will report to D & B when verified by D & B
- Capitalone.com for a business credit card. Automatically reports to D & B.
- Chase.com for a business credit card. Automatically reports to D & B.
- Dinersclub.com for a business credit card. Automatically reports to D & B.
Remember, most lenders check applicants' comprehensive business credit histories. They’ll like it if you have a credit history of quickly paying vendors who’ve extended you lines of business credit.
Try to work with vendors/lenders/financing crane leasing companies that give a total of 30-90 days for payment. That can help you build your credit score, provided you repay the amount owed in full and on time.
A successful repayment will then enter your credit history... and be a positive mark on your record.
Expected Payments If You Finance a Crane
Now, as I said earlier, it’s hard to get an exact estimate of the cost when studying how to finance a crane. Interest rates vary from equipment lender to equipment lender -- and of course, from borrower to borrower.
But usually, your credit score is one of the major factors. Generally, it affects the cost of crane leasing and crane financing.
If you have a good credit score (above 750), you’ll get good rates. Your crane financing interest rates and monthly payments will be lower than most other borrowers’.
Let’s take an example to illustrate.
Let’s say you finance a crane worth $250,000 and your repayment term will last for 5 years. Your required monthly payments will depend on your credit score.
Here are some likely monthly payment figures:
- If you have a great credit score (above 750), you will pay $4,850 per month.
- If you have a good credit score (above 650), you will pay $5,675 per month.
- If you have an unimpressive credit score (around 550), you will pay $9,000 per month.
The same thing will happen if you lease a crane. The numbers will be lower but the interest rates and structures are pretty much the same.
But what if you have a bad credit score and don’t have stable profit?
There are still crane equipment financing companies that will lend you money to finance a crane. Just expect a higher interest rate and monthly payment.
How to Finance a Crane
You have different options on how to finance a crane nowadays.
You can get loans from a bank or get lines of credit. However, neither of these options guarantees approval.
Banks are very strict lenders. They won’t risk giving money to failing or unstable companies.
If your business is less than 2 years old, banks may even look into your credit to see if you have the capability to repay the borrowed money.
For businesses over 2 years old, banks will look for prior incidents or records of successfully-paid-off equipment loans.
To avoid the hassle of bank loan applications, learn how to finance a crane with an equipment financing company instead.
Usually, equipment finance companies have fewer requirements and lower borrower qualifications than banks. You just need to provide documents like your credit history or balance sheet.
Most equipment financing companies online even have a simple one-page application. With some, you can expect approval and funding within 24 hours of submitting your application!
Final Thoughts on How to Finance a Crane
In this blog post, we talked about how to finance a crane.
The process of how to finance a crane is different from other equipment financing processes. It requires a larger sum of money than most, so lenders’ requirements will be different.
Usually, lenders will check your credit history, bank statements, cash flow, budget, cash on hand, and loan payment history. That’s why you need to look at all those to see how to finance a crane.
If you meet the requirements, your payments will depend on your agreement with the lender and your credit score.
If you have a good credit score (above 650), you’ll get reasonable rates. The opposite will happen if you have a bad credit score (below 600).
You have different options to finance a crane. You can get funds from a bank but it can be challenging, as banks are very strict lenders.
To avoid a lengthy application process, go to equipment financing companies instead. You can even learn how to finance a crane on bad credit when working with some equipment financing companies.
To know more about how to finance a crane, contact Trust Capital at (866) 458-4777.