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Apr

What’s the Best Way to Finance a Crane?

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Financing a crane is not as complicated as you think. If you are looking to add a crane to your fleet, but don’t have the cash to pay for it upfront, there are some things to consider when you seek financing. There are also some steps you can take to ensure you are in a better position to qualify for financing.

 Best Way to Finance a Crane

Bank Financing

One of the places that most people go for financing is a bank. If you can get approval from a bank, you may get better interest rates. However, banks are not always willing to give you a loan to buy equipment like a crane. So, if you are a new business owner, you are better off looking for financing somewhere else.

Leasing a Crane

Another thing to consider is leasing a crane so that you can have one in your fleet. Many business owners will lease cranes, which gives them the freedom to expand their construction business. Leasing a crane can be a great option, no matter where you are in your business journey. However, it’s important to remember that the crane is not yours, and you are just borrowing it from the leaser.

Whether you have a new company and are just starting or you have years of experience, leasing a crane is a good way to go. When you opt to lease a crane, you will be able to access the equipment right away. The details of the financial arrangement may differ depending on the company you deal with, but usually, you will pay a monthly lease fee for several years. This money accumulates until you have paid the full price for the crane.

After you have paid off the crane, you will have an option to continue to lease it and sign a new agreement, or you can decide to purchase it. If you decide to purchase it, you will likely have to pay some extra money for the crane. It is important to understand the terms of the agreement so you know how much must be paid in order to own the crane.

Another option when your lease has run out is to give the crane back and lease a newer model. This is one of the main reasons that business owners like to lease cranes. It allows them the flexibility to try out new equipment at the end of the lease.

Alternative Financing Options

If you want to buy the crane, financing is your best option. Unlike leasing, when you finance a crane purchase, you own the equipment. Similar to leasing, you will be paying monthly installments to your lender until you have paid back the full cost of the loan. When it comes to securing financing, there are a few steps you will need to take. These include:

  1. Application. You will need to complete an application form for the lender. While most of the information they request is basic, expect to provide a detailed financial picture, so they understand why you need the money.
  2. Speak to a consultant. After your application has been reviewed, a consultant will contact you to learn more about you, your business, and the type of crane you want to purchase. At this point, they will also let you know what your financing options are and answer any questions you have.
  3. Documentation. Before your application can be approved, you will need to provide some documentation that demonstrates your financial position to the lender. This can include business statements, bank details, etc.

After the lender reviews your application and supporting documents, they will decide on the loan. If you are approved, you will be able to sign the final papers and purchase your crane. However, if you are not approved, that doesn’t mean you can’t buy a crane. You will need to find out why your application was rejected and try to improve your position. Perhaps you can look for a co-signer or offer some collateral to secure the loan.

How to Qualify for Financing

When it comes to getting approval for financing to purchase a crane, there are some things to keep in mind. These include:

Age of your business. The longer you have been in business, the more confident lenders will feel about giving you money to buy a crane. Typically, you need to have been operating for more than two years before companies consider you a serious business.

Credit score. Your credit score is one of the biggest considerations for lenders when you apply for financing a crane. This is how they determine the risk of lending you the money and the likelihood you will be able to pay it back. There are different ways for you to know your credit score. You will need to contact one of the national credit bureaus to find out. The higher your credit score, the more likely lenders will do business with you.

Collateral. If you have something of value that you are willing to use as collateral, you can improve your chances of getting financing. This is something you should consider if you are a new business or don’t have a high credit score.

Conclusion

Adding a crane to your equipment fleet can be an exciting business move. For companies that don’t have the cash to pay for the crane upfront, there are other financing options to consider. While applying for a bank loan or leasing a crane are viable alternatives, one of the best ways is to look for alternative lenders like Truck Loan Center that can help you purchase your crane.

For more information about financing options for crane purchases, call Truck Loan Center at 1-866-230-0094 or contact us here.

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