What Are the Typical Heavy Equipment Loan Terms?

August 19, 2022

Large pieces of equipment are critical to support business operations in industries such as construction, manufacturing, machinery, and others. When one piece of equipment breaks down or ages out, you don’t want to wait long to place new equipment into service.

At Texas Gulf Bank, we help our customers acquire new or used equipment through our business financing solutions. We tailor our heavy equipment loans to suit your operational need so that you can obtain the necessary capital for a new equipment purchase.

To help you make a decision about whether to work with our bank, we will provide you with information about the typical heavy equipment loan terms that we offer. We will also discuss how you can benefit from our expedited loan review and approval process.

Our Typical Heavy Equipment Loan Terms for Qualified Borrowers

Our bank offers standard loan terms, typically between 3-5 years to finance the purchase of heavy equipment. We generally look at the lifespan of the asset you intend to purchase when determining the maximum number of years that we will provide financing support.

For example, if the expected lifespan of a new piece of construction equipment is four years, then we would likely offer you a four-year loan with 48 months to repay the loan.

Another important element is the down payment on the loan. For a typical borrower, we follow this lending schedule:

New general purpose equipment/machinery: typically requires a 20% down payment and the bank advances the remaining 80% of the lower of cost or market value.
Used general purpose equipment/machinery: typically requires a 30%-50% down payment and the bank advances 70% of orderly liquidation value or 50% of net book value, respectively.

– For new equipment, we will request a bill of sale or purchase order containing the financial (and other) details of the equipment purchase. This will allow us to determine your upfront obligation and the amount that we can finance.

– For used equipment, we will research the market value of the equipment and/or identify the average sales price of the equipment in its current condition and age. This will help us make a fair decision about your expected down payment and our financing options.

Types of Heavy Equipment We Finance

We will finance the purchase of equipment that includes tractors, dump trucks, backhoes, landscaping equipment, excavating and digging equipment used at the construction site, manufacturing equipment, and machinery.

If you need to obtain a different piece of heavy equipment for construction, manufacturing, machining, or another industrial purpose, then we will certainly consider offering you financing options on a case-by-case basis.

Also, we understand that many different types of advanced equipment are becoming available in the market. Things like super dozers, gigantic dump trucks, and equipment fitted with amazing new technology could be the right fit for your company. We will review your pursuit of newer pieces of equipment to determine the appropriate heavy equipment loan terms we can offer you.

Why Work with Texas Gulf Bank for a Heavy Equipment Loan?

We enjoy creating long-lasting relationships with business owners, managers, and executives from companies across the Texas Gulf Coast. As a community bank, we pursue personal connections with our customers so that we can offer lending options that fit your business.

We don’t subscribe to the idea that lending is one-size-fits-all. For us, banking is personal and local. All of our lenders are local, which means they can take the time to understand your business, review your goals, and provide you with lending options that are tailored to your need.

Also, because we make lending decisions at the local level, we can provide you with a faster decision about your loan request compared to larger banks in the area. Plus, you will benefit from having access to a single point of contact to receive a fast response to any questions you have during the loan application process.

At Texas Gulf Bank, you will be assigned a dedicated loan officer to handle your loan from start to finish. The officer will be able to walk you through every step of the application to expedite the process.

Application Requirements for a Heavy Equipment Loan

To complete the heavy equipment loan application process, we will request the following information about your business and the individuals guaranteeing the loan:

A completed application for a heavy equipment loan.
Most recent 3 years of business financial statements and balance sheets.
Most recent 3 years of tax returns from the business.
Most recent 2 years of financial statements from the individual guarantor(s).

Our goal is to ensure that your company has cash flow available to cover the monthly payments on the loan. We also want to review your history of business operations to protect our bank and your company as a potential borrower.

Because we are a relationship-based bank, we are interested in your company’s long-term success and viability, which is why we will carefully review your application to ensure that the loan fits an important business need and that we are confident in your repayment ability.

Once we receive all of the information that we need, the loan request will be sent to our credit analysts and loan review committee. The loan review for a large piece of equipment will take a few weeks to complete.

Then, if your company is approved, we will present you with the heavy equipment loan terms for your specific loan. You will have the opportunity to review and accept the loan terms before we fund the loan and provide you with the financing you need to complete the equipment purchase.

The entire process is very streamlined. We believe that you will appreciate our personal touch for business customers that you won’t necessarily find at other banks.

Get Started Today on a Heavy Equipment Loan

For more than 100 years, we have supported the business community along the Texas Gulf Coast. When your current equipment is no longer getting the job done, you can turn to Texas Gulf Bank to provide you with exceptional lending options on the path to obtaining new or used equipment.

Get in touch with our bank today to get started on the loan application process. You can also complete our contact form to provide us with some information about your need for heavy equipment. This will help us assign a local loan officer to your request so that we can quickly follow up with you. We look forward to supporting your business.

All Loans Subject to Credit Approval