Commercial Equipment Financing
Not everything that earns money hauls freight down the highway. Tow trucks, farm equipment, vocational rigs, and specialty machinery all qualify for commercial equipment financing, just usually from lenders who know the niche. The deal works the same way as any equipment loan: the machine is the collateral, your credit sets the tier, and the rate follows the risk.
What lenders look at on unusual equipment
Everything a truck lender checks, plus one more question: who buys this if we have to sell it? Niche collateral has a thinner resale market, so lenders lean harder on appraisals, comparable auction sales, and photos. Expect more documentation than a semi truck deal: proof of how the equipment earns revenue, insurance records, and sometimes a site visit for big-ticket machinery.
The premium is not punishment, it is math. A lender who can resell a repossessed semi in a week faces months of uncertainty moving a repossessed combine or rotator tow truck. Thin resale markets get priced with higher rates or bigger down payments, sometimes both.
Commercial equipment financing rates by tier
The calculator matrix gives you the honest starting range: 8.9% APR for Tier 1 on equipment up to 3 years old, stepping up through 12.9% as equipment ages, and running 22% to 28% for Tier 4. Standard-ish equipment like a late-model tow truck often prices right inside the matrix. Truly unusual machinery can land above it, or come with a bigger down payment than you hoped.
The default residual here is 25%, same as a semi truck, but treat it as a placeholder. On specialty equipment, the residual a lender will actually write depends on how confident they are in the resale market for that exact machine.
Terms, down payments, and structures for niche gear
Budget 15% to 30% down on unusual collateral, and expect terms of 24 to 60 months rather than the longest options. A $1 buyout lease is worth asking about, since some niche lenders prefer lease paperwork, and a balloon structure can match payments to seasonal revenue for farm and harvest equipment. Whatever the structure, get the payment sized before your busy season, not during it.
Walk into the lender conversation knowing your number. Niche deals reward prepared borrowers.
Financing structures worth a look
- $1 buyout lease: the structure niche lenders often prefer
- balloon payment equipment loan: match payments to harvest or seasonal revenue
Commercial equipment financing FAQ
Can I finance a tow truck?
Yes. Tow trucks are a known niche with dedicated lenders. Late-model wreckers often price inside the standard rate matrix, while older or specialized units may need 20% or more down.
Does farm equipment qualify for commercial equipment financing?
Yes, and many agricultural lenders offer seasonal or annual payment schedules that match harvest income. Bring production history and expect the rate to follow your credit tier.
Why do rates run higher on unusual equipment?
Resale risk. A lender prices the deal on how fast they could recover their money, and a thin used market for your machine means more risk, which shows up as a higher rate or a bigger down payment.
What documents should I prepare before applying?
Photos, serial numbers, any appraisal or comparable sales, proof of the revenue the equipment generates, insurance information, and a year or two of bank statements. More documentation means a faster answer.
Run Your Numbers
See the monthly payment on this equipment type with your credit tier and term before you apply.
Run your equipment payment in the calculator