The Structure
How $560K of Construction Equipment Financing Is Structured
One facility, one application, several manufacturers. That combination is the whole point: an excavator, two skid steers, and a pair of service trucks do not come from the same dealer, and a contractor building capacity does not want five separate approvals on five separate timelines. The equipment secures itself, which is what makes a mixed fleet financeable as a single transaction.
A captive lender finances its own brand. This contractor needed three brands and one closing
Representative structure
Larger fleets fund the same way when revenue, cash flow, and story qualify.
The Transaction
What the Contractor Was Building Toward
Bobby Friel
Founder, Basecamp Funding
Every residential contractor who has looked seriously at commercial work has run into the same wall, and it is not the bidding.
A contractor scaling from residential into commercial work needed the iron to do it — excavators, skid steers, service trucks. Equipment financing funded the fleet in 6 days, no 30%-down barrier.
Underwriting
How Construction Equipment Financing Actually Works
The equipment secures the loan. That single fact is why a contractor with a thin balance sheet and a strong backlog can finance $560K of iron in under a week — and why the structure looks nothing like a business loan.
The Bank
What a bank underwrites.
The contractor's balance sheet: assets on hand, retained earnings, and personal guarantees. A crew scaling out of residential shows little of any of it, because the money has been going into the work.
This Structure
What equipment financing underwrites.
The machines. Each unit is titled, appraisable, resaleable, and worth a known number on a secondary market that never stops moving. The collateral is the transaction.
Why a Captive Lender Cannot Fund a Mixed Fleet
OEM finance arms exist to move their own iron, and they are genuinely good at it — often with rates a broker cannot beat on a single new machine from that brand. The limit is structural. A contractor adding an excavator from one manufacturer, skid steers from another, and service trucks from a third is running three applications, three credit pulls, and three closing timelines. An independent structure finances the fleet the contractor actually needs rather than the fleet one dealer happens to sell.
Financing Used Equipment Alongside New
A scaling contractor rarely buys everything new, and shouldn't. A three-year-old excavator with documented hours can be the better purchase, and it finances cleanly when the lender underwrites against the machine rather than the invoice. What matters is the equipment's condition, hours, and resale market — not whether it came off a dealer lot this quarter. Captive programs typically will not touch another manufacturer's used inventory at all.
Why the Down Payment Is Lower Than a Bank's
A bank looking at heavy equipment sees an asset that moves, depreciates, and can leave the state on a trailer. It responds by asking for 25 to 30 percent down, which is often exactly the cash a contractor needs for mobilization instead. An equipment lender holds the title and knows the resale market, so the same machine supports a far smaller down payment. The difference is not generosity — it is a lender that understands what it is holding.
Speed Is the Product When Work Is Waiting
Six days is not a convenience here. A commercial general contractor qualifying subs wants to see capability before the bid, and the window for getting on that list does not stay open. A funding decision that arrives in five weeks arrives after the project has been awarded. What moves fastest is a clean application, bank statements, and specific equipment identified — make, model, year, hours, and seller.
What the Equipment Actually Buys
The excavator is not the point. Commercial general contractors qualify their subs before the bid, and equipment capability is the gate — a residential crew doesn't get on the list, and the list is where repeat work lives. Once a contractor is qualified, the same fleet bids the next project and the one after that with no further approval. Residential work is priced job to job against everyone else with a truck. Commercial work is priced against a shortlist.
Run the arithmetic your own way: what does one commercial project net you, and how many does this fleet let you bid in a year that you cannot bid now?
For most contractors the real answer is that the financing cost is settled inside the first project or two, and everything after that is capacity the business did not have. That is a different question than whether the payment fits this month's budget.
The Tax Consequence Nobody Mentions at the Dealer
Equipment placed in service before year-end is deductible in that tax year, and financing does not change that. A contractor putting roughly ten percent down on $560K of iron may deduct the full purchase price in year one — a write-off substantially larger than the cash that left the business. The worked numbers are below. Your CPA models the actual figures for your entity and bracket.
The Products
The Products That Funded This Transaction
| Product | Role here |
|---|---|
| Equipment Financing → | Excavator, skid steers, and service trucks — each unit its own collateral |
| Working Capital → | Mobilization and payroll on the first commercial jobs |
Financing this whole sector: Construction Financing →
Tax Strategy
Section 179 + 100% Bonus Depreciation on a $560K Fleet
If last year was strong and you’re about to write a check to the IRS — stop. Acquire qualifying equipment with as little as 10% down, finance the rest, and write off the full purchase price in year one. Section 179 covers it up to the annual cap; 100% bonus depreciation — made permanent in 2025, with no cap and no income limit — carries the rest.
At the top bracket, that first-year deduction can return meaningful tax savings — and for an established business with strong cash flow, it’s the difference between writing a check to the IRS and putting the same money into your own equipment. Your CPA models the exact numbers for your bracket and structure.
Worked scenario · top bracket · illustrative
You financed the machine and put down a fraction of its price — but you deduct the full price in year one. The write-off is bigger than your down payment, and the equipment keeps working the whole time.
Scales with your numbers
Illustrative only. Actual savings depend on your tax bracket, entity type, state conformity, and CPA guidance. Section 179 and bonus depreciation are elections your CPA makes for your situation; above the Section 179 cap, 100% bonus depreciation carries the balance.
Terms reflect credit, revenue, time in business, and each lender. Every file is unique — see what the desk structures for yours in the 60-second qualifier.
Bobby’s Take
“Contractors come off a strong year and hand the difference to the IRS. Put ten percent down on the iron, deduct the whole purchase, and the write-off is bigger than the check you wrote. The machine works the entire time.”
Bobby Friel · Founder · 20+ years in banking and finance
The Result
What Changed After Close
Start Here
See What Your Revenue Supports on Equipment
Sixty seconds, no documents, and a soft-pull review. If you have the work lined up and need the iron to take it, this is where you find out what the structure looks like.
~60-second review · Soft-pull, FICO untouched · No obligation
No obligation. Soft-pull review — your FICO stays untouched.
Related
Similar Structures
Representative scenarios — illustrative, anonymized figures, not specific client transactions.
FAQ
Construction Equipment Financing — Questions, Answered
How does construction equipment financing work?
The equipment secures the loan. Each machine is titled to the lender until the facility is repaid, which means the transaction is underwritten primarily against the asset rather than the contractor's balance sheet. That is why a crew with strong revenue and few pledgeable assets can finance six figures of iron quickly — the collateral is the machine, and its resale value is a known number.
Can you finance equipment from multiple manufacturers in one loan?
Yes, and it is the main reason contractors go outside a dealer's finance arm. A captive lender finances its own brand, so a mixed fleet means separate applications, separate credit pulls, and separate closing dates. An independent structure covers an excavator from one manufacturer, skid steers from another, and service trucks from a third in one facility with one closing.
How much down do you need for heavy equipment?
Roughly ten percent is common through an equipment lender, against the 25 to 30 percent a bank typically asks. The difference is what the lender is holding: an equipment lender takes title and knows the secondary market, so the machine itself supports a smaller down payment. For a contractor, that gap is usually the exact cash needed for mobilization on the job the equipment was bought for.
Can you finance used construction equipment?
Yes. Used iron with documented hours and service history finances cleanly, because the underwriting looks at the machine's condition and resale market rather than whether it came off a dealer lot this quarter. For a scaling contractor that matters — a three-year-old excavator is often the better purchase, and captive programs generally will not finance another manufacturer's used inventory at all.
How fast can a contractor get equipment financed?
Days rather than weeks when the file is ready; this fleet funded in six. What moves fastest is a clean application, bank statements, and the specific equipment identified — make, model, year, hours, and seller. Speed matters more than it sounds: a general contractor qualifying subs wants to see capability before the bid, and that window closes when the project is awarded.
Can you take Section 179 on financed equipment?
Yes — financing does not change the deduction. Equipment placed in service before year-end is deductible in that tax year whether it was bought outright or financed, which means the first-year write-off can substantially exceed the cash actually put down. The worked example on this page shows the math. Your CPA models the exact figures for your entity, bracket, and state conformity.
