Equipment Financing by Industry: What You Need to Know
Industry-Specific Equipment Financing: A Comprehensive Guide
Equipment financing is not one-size-fits-all. Different industries have unique equipment needs, financing structures, and lender considerations. Understanding how lenders view your industry can help you secure better terms and make smarter financing decisions.
In this guide, we explore equipment financing across major industries, sharing insights that Dallas business owners need to know.
Construction Industry
The construction sector remains the heavyweight champion of equipment financing, driven by the massive capital required for yellow iron and machinery.
Common Equipment Financed
- Excavators, backhoes, and skid steers
- Bulldozers and graders
- Cranes and boom lifts
- Concrete mixers and pump trucks
- Dump trucks and haulers
- Scaffolding and temporary structures
What Lenders Look For
Contract backlog: We always ask to see signed contracts because they prove future revenue. Lenders need assurance that you have the projects lined up to pay for the new excavator or crane.
Experience: Established contractors with track records get better terms than new companies.
Equipment utilization: How efficiently do you use existing equipment?
Bonding capacity: Your bonding limits indicate your financial strength.
Industry-Specific Considerations
- Deferred-to-Deploy Structures: We often structure deals where payments don’t start until the machine is delivered and generating revenue. This “deferred to deploy” model protects your cash flow during shipping or setup delays.
- Seasonal Fluctuations: Many construction businesses experience seasonal downturns. Lenders understand this and may offer flexible payment structures.
- Section 179 Tax Limits: The 2025 Section 179 deduction limit has jumped to $2,500,000, allowing you to write off the full purchase price of heavy machinery immediately.
- Project-Based Financing: Some lenders offer financing tied to specific projects.
- Residual Values: Heavy equipment often retains strong resale value, which benefits financing terms.
Typical Terms
| Factor | Typical Range |
|---|---|
| Down payment | 0-20% |
| Term length | 3-7 years |
| Interest rates | 6-14% |
| Approval time | 2-5 days |
Healthcare Industry
Healthcare providers face unique equipment financing challenges due to the specialized nature of medical equipment and regulatory requirements.
Common Equipment Financed
- Diagnostic imaging (MRI, CT, X-ray)
- Laboratory equipment
- Dental chairs and 3D imaging tools
- Physical therapy tables and devices
- Electronic health record (EHR) systems
- Patient monitoring systems
What Lenders Look For
Revenue stability: Healthcare practices with consistent patient volume and insurance reimbursements are favored.
Insurance mix: The balance of private insurance, Medicare, and Medicaid affects cash flow predictability.
Practice type: Established specialties with strong demand get better terms.
Regulatory compliance: Evidence of proper licensing and compliance.
Industry-Specific Considerations
- Soft Cost Coverage: We frequently secure 100% financing that includes “soft costs” like installation, shipping, and staff training. These non-hardware expenses can equal 20-30% of the total project cost but are essential for operation.
- Technology Obsolescence: Medical technology evolves rapidly. Lenders may prefer shorter terms for high-tech equipment.
- Vendor Relationships: Many equipment manufacturers offer captive financing programs.
- Group Practices: Multi-provider practices may access better rates due to diversified revenue.
Typical Terms
| Factor | Typical Range |
|---|---|
| Down payment | 0-10% |
| Term length | 3-7 years |
| Interest rates | 5-9% |
| Approval time | 3-7 days |
Restaurant and Hospitality
Restaurants and hospitality businesses have specific equipment needs and face unique financing challenges related to the industry’s high failure rate.
Common Equipment Financed
- Commercial ovens, ranges, and deep fryers
- Walk-in refrigeration units
- Point-of-sale (POS) systems
- Bar equipment and taps
- Furniture, fixtures, and signage
- HVAC systems
What Lenders Look For
Operating history: We see a massive drop in rates once a restaurant passes the two-year mark. Lenders view this milestone as proof of concept, often unlocking single-digit interest rates that startups cannot access.
Concept viability: Lenders evaluate your concept, location, and competitive positioning.
Owner experience: Restaurant industry experience matters, even if this specific location is new.
Cash flow consistency: Daily sales deposits demonstrate business activity.
Industry-Specific Considerations
- Equipment-as-a-Service (EaaS): New financing models allow you to treat equipment like a subscription rather than a loan. This “pay-for-use” structure includes maintenance and repairs in the monthly fee.
- Higher Rates: The restaurant industry’s failure rate leads to higher interest rates.
- Shorter Terms: Lenders may prefer shorter financing terms.
- Franchise Considerations: Franchisees may access franchisor-arranged financing programs.
Typical Terms
| Factor | Typical Range |
|---|---|
| Down payment | 10-25% |
| Term length | 2-5 years |
| Interest rates | 8-18% |
| Approval time | 24-48 hours |
Manufacturing
Manufacturing businesses often need substantial equipment investments and can access favorable financing due to strong collateral values.
Common Equipment Financed
- CNC machines and lathes
- Industrial robots and automation cells
- Assembly line conveyors
- Quality control scanners
- Material handling equipment
- 3D printers and additive manufacturing
What Lenders Look For
Customer diversification: Reliance on a single customer is a red flag.
Contract length: Long-term supply agreements demonstrate stability.
Equipment specificity: General-purpose equipment is easier to finance than highly specialized machines.
Inventory management: Efficient operations indicate good management.
Industry-Specific Considerations
- The Reshoring Impact: We are currently seeing a surge in financing approvals for automation equipment as companies move production back to the US. Lenders are eager to fund robotics that solve labor shortages and increase domestic output.
- Long Useful Lives: Manufacturing equipment often lasts 10-15 years, supporting longer financing terms.
- Installation Costs: Can often be bundled into financing.
- Export Considerations: Equipment used for export production may qualify for special programs.
Typical Terms
| Factor | Typical Range |
|---|---|
| Down payment | 10-20% |
| Term length | 5-10 years |
| Interest rates | 5-9% |
| Approval time | 5-10 days |
Transportation and Logistics
The transportation industry has established equipment financing practices due to the standardized nature of vehicles and trailers.
Common Equipment Financed
- Class 8 semi-trucks and sleepers
- Trailers (dry van, refrigerated, flatbed)
- Last-mile delivery vans
- Forklifts and warehouse racking
- Fleet management GPS systems
- Fuel storage systems
What Lenders Look For
Authority and compliance: Active operating authority and safety compliance.
Insurance coverage: Adequate commercial auto and cargo insurance.
Driver records: Company safety ratings affect terms.
Revenue per mile: Efficiency metrics matter.
Industry-Specific Considerations
- The 10-Year Rule: We advise clients that most lenders will not finance a truck older than 10 years. If you are looking at older assets to save money, you may need a specialized lender or a larger down payment.
- Emissions Regulations: With stricter EPA standards looming for 2027, many fleets are financing “bridge” equipment now.
- High Residual Values: Trucks and trailers retain value well, supporting favorable terms.
- Owner-Operator Programs: Individual drivers can access financing for their first truck.
Typical Terms
| Factor | Typical Range |
|---|---|
| Down payment | 10-25% |
| Term length | 3-6 years |
| Interest rates | 7-14% |
| Approval time | 1-3 days |
Technology and IT
Technology companies face unique challenges due to rapid equipment obsolescence, but also benefit from the critical nature of their equipment needs.
Common Equipment Financed
- Servers and data center racks
- Network infrastructure and firewalls
- Development workstations
- Testing and QA equipment
- Security and surveillance systems
- Telecommunications hardware
What Lenders Look For
Revenue model: Recurring revenue (SaaS) is preferred over project-based revenue.
Growth trajectory: Lenders evaluate growth potential and burn rate.
Customer contracts: Enterprise contracts demonstrate stability.
Technical leadership: Strong technical teams indicate viability.
Industry-Specific Considerations
- Fair Market Value (FMV) Leases: We typically recommend FMV leases for IT hardware because they offer the lowest monthly payments. At the end of the term, you can simply return the outdated servers and upgrade to the newest generation without selling the old gear.
- Short Useful Lives: Technology equipment may only be useful for 2-4 years.
- Bundled Solutions: Hardware, software, and services often financed together.
- Venture-backed Considerations: VC-backed companies may face different evaluation criteria.
Typical Terms
| Factor | Typical Range |
|---|---|
| Down payment | 0-10% |
| Term length | 2-4 years |
| Interest rates | 6-12% |
| Approval time | 2-5 days |
Agriculture
Agricultural equipment financing has unique seasonal considerations and government program interactions.
Common Equipment Financed
- Tractors and combines
- Irrigation pivot systems
- Grain storage facilities
- Livestock pens and chutes
- Processing equipment
- GPS and precision agriculture technology
What Lenders Look For
Crop history: Documented production history and yields.
Land ownership: Owned vs. leased land affects stability assessment.
Diversification: Multiple crops or revenue sources reduce risk.
Insurance coverage: Crop insurance and livestock coverage.
Industry-Specific Considerations
- Annual Payment Structures: We structure almost all our agricultural deals with annual or semi-annual payments. This aligns your debt service with your harvest income, preventing cash flow strain during the growing season.
- FSA Programs: Farm Service Agency programs may offer favorable rates.
- Equipment Dealer Financing: Major manufacturers offer captive financing.
- Used Equipment Market: Strong secondary market for agricultural equipment.
Typical Terms
| Factor | Typical Range |
|---|---|
| Down payment | 10-20% |
| Term length | 3-7 years |
| Interest rates | 5-9% |
| Approval time | 5-14 days |
Professional Services
Law firms, accounting practices, and consulting firms have equipment needs focused on technology and office infrastructure.
Common Equipment Financed
- Computer systems and specialized software
- High-volume copiers and printers
- VoIP telecommunications systems
- Office furniture and cubicles
- Security and access control systems
- Conference room presentation tech
What Lenders Look For
Partner stability: Low partner turnover indicates practice health.
Client diversification: Broad client base reduces risk.
Billing rates: Strong realization rates demonstrate value.
Receivables: Aging and collection history matter.
Industry-Specific Considerations
- Software-Only Financing: We now finance standalone software subscriptions and licenses for many professional firms. You no longer need to bundle software with hardware to get a loan.
- Lower Equipment Intensity: Equipment needs are generally smaller than other industries.
- Bundled Services: Often prefer equipment-as-a-service models with maintenance included.
Getting the Best Terms for Your Industry
Regardless of your industry, these strategies help secure better financing terms:
- Know your industry’s benchmarks: Understand typical terms so you can negotiate effectively.
- Work with industry specialists: Lenders who understand your business offer better service and terms.
- Prepare industry-specific documentation: Have relevant metrics and records ready.
- Highlight your strengths: Emphasize what makes your business stable and successful.
- Consider timing: Apply when your business metrics are strongest.
Industry Expertise Matters
At Equipment Financing Dallas Pros, we work with businesses across all industries to find the right capital solutions. Our lender network includes specialists who understand the unique aspects of your specific market.
What industry are you in? Contact us to discuss equipment financing options tailored to your specific industry and business situation.