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Lease or Loan?

Construction Equipment Financing:
Lease vs. Loan

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Leasing construction equipment or taking out a loan to purchase both have their advantages. Which one is best for you depends on your goals as a contractor at any given time.

Before you acquire new equipment, ask yourself these questions to determine your business needs:

  • How long will you need the equipment?
  • Do you want to own the machine at the end of the term?
  • Are you interested in keeping up with the latest technology?
  • Do you want to buy out early?
  • Are there tax, cash flow, and financial issues you’re trying to satisfy?
  • Are you more concerned about the lease rate or the overall cost?
  • Are you just looking for the lowest possible payment?

When you have a good idea of what your business needs are, compare the advantages of leases and loans to find out which one matches your needs best.


  • Depending on the term, less money may be required upfront.
  • Generally lower payments than installment loans of the same term.
  • Pay for the use of the equipment, return it at lease end, or exercise your purchase option.
  • Schedule equipment replacement at less cost than a cash purchase.
  • Reduce downtime. Keep newer equipment with the latest technology in your fleet.
  • Eliminate the task of disposing of used equipment.
  • Could be less expensive and more efficient than renting equipment multiple times a year.


  • You own the equipment when you’re done paying for it.
  • You can depreciate the equipment.
  • The equipment appears as an asset on your balance sheet.
  • No hour limits for the time you use the machine.
  • Build equity with installment payments.
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When it comes to deciding whether to lease equipment or take out a construction equipment loan, there is no right or wrong answer. There’s a good chance you’ll use a combination of the two to finance your fleet and optimize your cash flow. Learn more about our equipment financing options, or see your local dealer.