Should a contractor rent or finance equipment?

A common rule of thumb is to own what you use most of the year and rent what you need occasionally. Compare annual rental cost with the loan payment plus maintenance.

Can I include attachments in the financing?

Usually yes, when they are bought with the machine and listed on the invoice.

What does a $200,000 equipment loan cost per month?

At a representative 8%–30% APR, about $4,055–$6,471 a month over 60 months.

WithFunded › Best-of guides › By product

Best equipment financing for construction companies in 2026

The best equipment financing for a construction company is an equipment loan for core machines used on every job, a lease for equipment you replace often, and SBA 504 for a large fleet or yard purchase. Rent, do not finance, equipment needed for a single job. Heavy equipment holds its value, which is why contractors often qualify here before they qualify for unsecured credit.

By the WithFunded team · Published November 11, 2026 · Rates as of November 2026

The short list

Best for core machines: Equipment loan
Best for equipment you replace often: Equipment lease
Best for a major fleet or yard: SBA 504 loan
Best for cash before a large job: Equipment sale-leaseback

The 4 best options, ranked

1. Equipment loan Best for core machines

An excavator or skid steer that works most days of the year should be owned. A loan over five to seven years fits its working life.

Watch for: Older or highly specialized equipment gets shorter terms and higher rates. Equipment financing guide →
2. Equipment lease Best for equipment you replace often

Compact equipment and trucks that take heavy wear are simpler to cycle through on a lease.

Watch for: On a fair-market-value lease you do not own the equipment unless you pay the buyout. Equipment financing guide →
3. SBA 504 loan Best for a major fleet or yard

A large purchase of long-lived machinery, or equipment together with land, gets the lowest fixed rate through the 504 program.

Watch for: Only for fixed assets. It cannot fund payroll, inventory, or other working capital. SBA loan guide →
4. Equipment sale-leaseback Best for cash before a large job

A contractor with paid-off iron can turn it into mobilization money without waiting on a bank line.

Watch for: You turn an asset you own into a monthly payment, so the cash has to earn more than it costs. Equipment financing guide →

Side-by-side comparison

Option	Verdict	Cost basis	Funding speed	Qualifies on
Equipment loan	Best for core machines	Representative 8%–30% APR, with the term matched to the equipment's useful life	Days to weeks	The equipment is the collateral, which can offset a thinner credit profile
Equipment lease	Best for equipment you replace often	A monthly lease payment; total cost depends on the end-of-term buyout	Days to weeks	The equipment is the collateral; often less cash up front than a loan
SBA 504 loan	Best for a major fleet or yard	CDC portion roughly 6.6% on 10 to 25 year terms	Weeks to months	Owner-occupied real estate or major equipment, plus a down payment
Equipment sale-leaseback	Best for cash before a large job	Lease-style pricing on equipment you already own	Days to weeks	The resale value of equipment you own free and clear

What it costs

Monthly payments on a standard fixed-payment loan at the representative 8%–30% APR band. The low end of each range is 8% APR and the high end is 30% APR.

Amount	48 mo	60 mo	84 mo
$75,000	$1,831–$2,700	$1,521–$2,427	$1,169–$2,144
$200,000	$4,883–$7,201	$4,055–$6,471	$3,117–$5,719
$500,000	$12,206–$18,003	$10,138–$16,177	$7,793–$14,296

Financing $200,000 over 60 months costs about $4,055–$6,471 a month, or $43,317 to $188,241 in total interest, depending on the rate you qualify for. WithFunded calculation, representative 8%–30% APR band. Not a quote.

What lenders look at

Machine make, model, year, and hours.
Utilization and the backlog that will keep the machine working.
Other equipment debt already on the books.

Mistakes to avoid

Financing a machine for one project. Rental is cheaper when the need is temporary.
Overlooking the cost of transport, attachments, and maintenance when judging the payment.

Frequently asked questions

Should a contractor rent or finance equipment?: A common rule of thumb is to own what you use most of the year and rent what you need occasionally. Compare annual rental cost with the loan payment plus maintenance.
Can I include attachments in the financing?: Usually yes, when they are bought with the machine and listed on the invoice.
What does a $200,000 equipment loan cost per month?: At a representative 8%–30% APR, about $4,055–$6,471 a month over 60 months.

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WithFunded has a dedicated page for construction companies: construction.withfunded.com.

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How we ranked these options

This guide ranks types of financing, not individual lenders. Each option is ordered by how well it fits the need described on this page, judged on four things in this order: whether the structure matches how the money will be used and repaid, total cost, funding speed, and how hard it is to qualify. Cost figures are WithFunded calculations from published rate inputs as of November 2026: the bank prime loan rate from the Federal Reserve, the SBA maximum-rate schedule, and Federal Reserve survey data. The method follows our 2026 SMB Financing Cost Report, whose own figures use June 2026 rates.

WithFunded is a financing marketplace, not a lender. Our 2-minute form suggests a product type from the families we cover, and a funding partner reviews the request. Not every structure named in this guide is available through WithFunded: options such as SBA microloans, USDA farm loans, bank loans, and seller financing are ones you would pursue directly with the provider. They are listed because leaving out a good fit would make the ranking less useful.

Related guides

The top-ranked option on this page is equipment loan because it fits the most common version of this need. Your own best fit depends on your revenue, time in business, credit, and how fast you need the money.

Disclaimer. WithFunded and Big Think Capital are a financing marketplace; we are not the direct lender and do not guarantee funding, approval, rates, or terms. Everything on this page is a representative example only — not an offer or a commitment to lend, and not financial advice. Actual rates, fees, payments, and terms are set by the funding lender and depend on your business, credit, and the product. Where required by state law, the lender provides cost-of-financing disclosures before any agreement is signed.