Landscaping Equipment Financing - Take Your Business to the Next Level

If you’re starting a landscaping business, you’ll need some basic equipment such as lawnmowers, trucks for carrying dirt and supplies, and other tools. All that equipment can add up quickly, so some business owners turn to landscape equipment financing to help them buy the tools they need.

Understanding Landscaping Equipment Financing

Landscaping businesses need some basic equipment to operate. Financing is a great way to buy equipment at a lower upfront cost, making it useful if you’re looking to build a company or expand one that already exists.

What Is Landscaping Equipment Financing?

Landscaping equipment financing is a type of loan that lets you borrow money to purchase landscaping tools or equipment.

This means you can reduce the upfront cost of buying new equipment. Instead, you pay the tools off over time. That can offer huge benefits to businesses. However, the drawback is that your loan will accrue interest, meaning that you’ll pay more overall for the same equipment if you use financing.

How Does Landscaping Equipment Financing Work?

Equipment financing in any industry typically functions like a secured loan. You decide on the equipment to buy, apply for a loan to buy it, and wait to see if you get approved.

Like other secured loans, landscaping equipment financing loans use the equipment you purchase as collateral to secure the loan. That means the lender is taking on less risk and can have looser approval requirements. You’ll usually need some cash to offer as a down payment.

Depending on what you’re buying and the amount of the loan, you can expect to have anywhere from a few years to as long as 10 years to pay the loan back in monthly installments.

One alternative to traditional financing is a landscape equipment lease. This lets you rent the equipment from another company for a monthly fee. When you lease, you don’t own the equipment you’re using, but you may be able to negotiate a lease-to-own agreement where you can take ownership of the equipment or buy it at the end of the lease.

Leases let you finance 100% of the equipment’s cost and as much as 25% of soft costs, like taxes or delivery charges.

What Types of Landscaping Equipment Can Be Financed?

You can finance all kinds of landscaping equipment and tools, including:

• Commercial lawn mowers
• Utility trailers
• Vehicles
• Trimmers
• Blowers
• Edgers
• Safety gear
• Compact tractors
• Excavators

Can I Get Financing on Used Landscaping Equipment?

Yes, it is possible to get financing on used landscaping equipment. Used equipment is typically cheaper than new equipment, making this an option for companies looking to save money.

However, used equipment isn’t as good as collateral for a loan, so lenders may charge higher interest rates or limit the length of your loan if you opt to finance used equipment.

How Many Years Can You Finance Landscaping Equipment?

Each lender is free to set its own rules and loan terms, so you’ll want to shop around and compare multiple loan options to find one that fits your needs. You should be able to find loan options with terms ranging from a year or two to as long as ten years. However, terms in the three to five-year range are typical.

What Are the Qualification Requirements for Landscaping Equipment Financing?

If your company wants to get any kind of loan, you’ll want to make sure you have a good chance of qualifying before you apply. Lenders will look at a few key factors when deciding whether to approve your loan.

• Credit score. Lenders will look at both your personal and business credit. You have a good chance if your score is in or above the 600-650 range.
• Time in business. Banks and lenders usually see very new businesses as higher risk. Having a year or two of operating history can help your chances.
• Revenue. The more money your company brings in, the better your chances of qualifying for a loan.

Where Can You Get Landscaping Equipment Financing?

You can get landscaping equipment financing from many sources, including:

• Equipment vendors. Many businesses that sell landscaping equipment will offer financing or leasing options. This can be a good deal if you only work with one vendor.
• Traditional lenders. Many banks and credit unions offer business loans that you can use to buy equipment. Check with your business bank to see if they have good loan deals.
• Online lenders. Online lenders tend to have lower rates and quick approvals but might not be able to lend as much as other lenders. Visit our article about the best equipment financing companies to learn more.
• SBA loans. Loans secured by the SBA have huge borrowing limits and may be easier to qualify for. However, they also come with much longer underwriting processes, making them a poor choice for people who need quick financing.

Can You Finance Landscaping Equipment with Bad Credit?

Yes, it’s possible but more difficult, to finance landscaping equipment with bad credit.

You may have to check with a few lenders to see which one is willing to offer a loan. You should also expect some restrictions, such as lower loan limits and higher down payment requirements. You’ll also wind up with a higher interest rate than borrowers with strong credit.

Is Landscaping Equipment Financing a Good Choice for Your Business?

Landscaping equipment financing can be a great choice for your company.

Landscaping tools can be very expensive and financing lets you spread their cost out over the course of months or years. If you use the equipment effectively, it can help you increase your revenue by enough to pay for the cost of the loan.

That makes financing useful for businesses that want to start or expand, but that don’t have the cash on hand to pay for equipment outright. If used well, financing can accelerate growth.

The danger is that you’ll borrow too much and struggle to repay the loan.

Landscaping Equipment Financing: Loans vs Leasing

As an alternative to borrowing money to buy equipment, you can consider leasing equipment. Leases involve renting tools instead of buying them. Each strategy has pros and cons.

What Is an Equipment Loan?

An equipment loan is a type of loan that you can use to buy equipment or other tools. You make monthly payments to cover the interest and some of the principal until the loan is paid off. When you use a loan, you own the equipment and can use it however you wish or even sell it.

Pros of Landscaping Equipment Loans

• Build equity in the equipment
• Use the equipment as you wish and have the freedom to modify it
• When you pay the loan off, you’ll own the equipment and can use it with no associated monthly payment

Cons of Landscaping Equipment Loans

• Down payment requirements might be large
• If you have poor credit, interest rates can make financing prohibitively expensive
• Less flexibility to replace or upgrade equipment

What Is Equipment Leasing?

Equipment leasing involves renting equipment from another company in exchange for monthly payments. Usually, leasing is cheaper up front. You also may not be fully responsible for maintenance and repairs. However, you’ll never build equity or take ownership of the equipment.

Pros of Leasing Landscaping Equipment

• Lower upfront costs
• More flexibility to replace or upgrade equipment
• Lessor may help with repairs and maintenance

Cons of Leasing Landscaping Equipment 

• The terms of the lease agreement may place restrictions on the use of the equipment
• You won’t build equity and will never pay the lease off

Loans vs Leasing: Which Is Right for You?

Choosing between a loan and a lease can be tricky.

In general, if you plan to keep something for the long term, financing is often a better choice. Once you pay off the loan, you get to keep the equipment and use it without an associated monthly payment. For long-lasting equipment that can be a big savings.

For equipment you won’t keep for a long time or want to flexibility to replace and upgrade frequently, leasing might be a better choice. You have more freedom to cancel the lease and replace the equipment you’re using than with a loan. 

How to Apply for Landscaping Equipment Financing

If you’re considering applying for a landscaping equipment loan, follow these steps.

• Write down your business plan. This will show the lender how you’ll use the equipment to make money to repay the loan.
• Determine your needs. Figure out what equipment you’ll buy and how much it will cost.
• Gather documents. Make sure you have your business organization documents, bank statements, and financial reports available for the lender to review.
• Compare lenders. Look at multiple loan offers from different lenders to find the best deal.
• Apply. Fill out the application and meet with the lender to discuss your loan. After that, just wait for the approval.

Alternative Types of Landscaping Equipment Financing

If you want to buy landscaping equipment, you may want to consider these other types of financing.

• Business term loan. Term loans are flexible and you can use them to buy equipment. However, they may have higher rates and shorter terms than equipment loans.
• Business line of credit. Lines of credit let you borrow multiple times on an as-needed basis. They can be useful for smaller purchases, especially when you aren’t certain what you need to buy yet.
• Business credit card. Some business credit cards have 0% interest introductory periods, making them a cheap way to borrow money. However, they have low limits.

Tips for Getting Financing for Your Landscaping Business

If you want to give yourself the best chance of getting financing, consider these tips.

• Apply early. The more time you give yourself to deal with the application process, the better you’ll be able to handle problems with the loan.
• Boost your credit. If possible, pay down existing loans and make sure you have strong credit before applying.
• Have a plan. If you can show your lender how you’ll use the equipment to turn a profit, that will help encourage the lender to approve the loan.

Final Word

Landscaping equipment financing is an important tool for landscaping companies looking to start or expand. Borrowing money can reduce the upfront cost of the tools you need and help you boost revenues at a relatively low cost. Use these tips to make the most of your equipment loans.