In an industry known for being cyclical in nature, owners of construction companies across the United States are enjoying a strong upswing in business these days. With increases in residential, commercial and public sector building and the Commerce Department reporting month after month of increased total construction spending, there is no doubt it's a good time to be in the construction business.

Construction companies aren't the only ones enjoying the current flurry of activity, however. As contractors see an increase in cash-flow and the need to respond to new opportunities, the phones are ringing off the hook at construction equipment dealers, as well.

Many overlook the importance of really getting to know a construction equipment dealer by asking the right questions and researching all of the options available before purchasing equipment. Before you rush out and add to or update your working fleet, it's important to take a close look at your relationship with your dealer.

Shop Around

Like any business decision, it is important to do your research before deciding to obtain new equipment and purchasing it through a local dealer. Choosing a qualified, full-service dealer is perhaps the most important decision made during the equipment procurement process, yet it is often where construction business owners and managers spend the least amount of time.

Keep in mind that you're not just buying a piece of equipment; you're entering into a long-term relationship with a current or new equipment dealer. In addition to offering a complete range of equipment, many dealers are now offering flexible financing, product support, parts and other services to make it easier for contractors to obtain equipment.

Today, smart dealers are doing what they can to make it easier for customers to buy. One option increasing in popularity among construction equipment dealers is to establish a customized finance program that provides no-hassle financing solutions for customers like you.

There are a variety of equipment finance options available to contractors, and many are turning to flexible financing as a way to obtain new equipment without a large outlay of cash. First and foremost, your equipment dealer should take your specific needs into consideration and should make all of your equipment financing options clear from the outset.

By working with a dealership that offers financing options, construction companies are often able to make equipment procurement decisions that make the most of the budget dollars available. Financing can help enhance your buying power and provide greater flexibility, and working with a dealer who provides financing options frees up the time you would otherwise spend seeking out financing to do what you do best-run a construction company.

Selecting a Partner

Because you will be entering into a long-term business relationship with the dealer, it is essential to select the right company to help you meet your business needs, after you've shopped around. During initial meetings, look for a dealer that understands your objectives, is experienced with the equipment needed and is committed to the relationship over the long term.

When searching for an equipment dealer, look for a company that:

  • Is flexible and willing to work with you to develop an agreement that will meet your financial objectives
  • Offers a variety of options including equipment financing, leasing and rental
  • Considers the relationship a partnership and is readily available to answer questions and provide support throughout the life of the agreement
  • Is experienced in construction equipment sales and financing
  • Takes into consideration your service and support needs
  • Offers fast credit approvals and quick, easy processing
  • Is a financially stable, long-term business partner.

Questions to Ask

While the dealer will most likely provide background information about his or her financing products and services, there are specific questions you can ask to ensure that you're getting the information necessary to make a sound decision. The following list of questions to ask before entering a financing agreement take into account the "before, during and after" stages of financing and are designed to help companies in search for a finance partner:

  • How am I planning to use this equipment? Is it part of my core business? Do I have contracts lined up for more than six months? Is it a production or utility machine? All of these factors have an impact on the right financing solution to meet your needs.
  • Does the finance representative understand my business and how this transaction helps me to do business?
  • Is the dealer experienced at working with companies whose needs are similar to mine?


  • What is the total finance payment and are there any other costs that I could incur before the finance agreement ends?
  • What happens if I want to change this agreement or end the financing early?
  • How am I responsible if the equipment is damaged or destroyed?
  • What are my obligations for the equipment (such as insurance, taxes and maintenance) during the finance agreement?
  • Can I upgrade the equipment or add equipment under this financing package?


  • 9. What are my options at the end of the finance agreement?
  • 10. Are there any extra costs at the end of the agreement?


A qualified dealer should be able to address each of these issues with you prior to entering into an agreement. If you are uncomfortable with the information you receive, take the time to shop around for a dealership that is committed to helping you navigate through your equipment finance options.

Additional Resources

Many construction equipment dealers partner with a finance company, making it easier for customers to get information about their financing options, and a variety of resources are available to help answer additional questions.

The Equipment Leasing Association (ELA), a non-profit association representing companies involved in the equipment leasing and finance industry, has developed a tool called Choose Leasing to help answer commonly asked questions about equipment finance. Choose Leasing is available at and discusses important things to note before signing a contract, provides background information on equipment leasing and offers a search engine for finding nearby or specialty lessors.


Construction Business Owner, April 2006