How to Finance Used Heavy Equipment in 2026: Loans, Leases, and Section 179

Buying used heavy equipment is one of the smartest ways to grow a contracting, demolition, or aggregate business without overextending your cash. But even used machines — crushers, screeners, excavators, grinders — can run well into six figures. That's where equipment financing comes in. Whether you're a seasoned operator adding to your fleet or a startup buying your first crusher, understanding your financing options in 2026 can save you tens of thousands of dollars over the life of a loan or lease.

At RPG Equipment, we help contractors buy and sell used heavy equipment every day. While we're not lenders ourselves, we've seen enough deals come together (and fall apart) to know what works, what doesn't, and what questions you should be asking. This guide covers the major financing options available for used equipment in 2026, including the Section 179 tax deduction that can dramatically reduce your effective cost.

Why Finance Used Equipment Instead of Paying Cash?

Even if you have the cash on hand to buy a $250,000 used crusher outright, financing often makes more sense. Here's why:

• Preserve working capital. Cash in the bank gives you flexibility to handle payroll, fuel, repairs, and unexpected expenses. Tying up $250,000 in a single asset can leave you cash-poor when you need liquidity most.
• Leverage the asset. The equipment itself generates revenue. Financing lets you put a machine to work immediately while paying for it over time with the income it produces.
• Tax advantages. Interest payments on equipment loans are typically tax-deductible, and Section 179 lets you deduct the full purchase price in the year of acquisition — even if you financed it. More on this below.
• Build business credit. Successfully financing and repaying equipment loans builds your business credit profile, making future financing easier and cheaper.

Option 1: Traditional Bank Loans

A traditional equipment loan from a bank or credit union works much like a car loan. You borrow a set amount, the equipment serves as collateral, and you make fixed monthly payments over a defined term until the loan is paid off. You own the equipment from day one.

Typical terms for used equipment in 2026:

• Interest rates: 6.5% – 10% for well-qualified borrowers; 10% – 14% for newer businesses or weaker credit
• Down payment: 10% – 25% of the purchase price
• Loan terms: 36 – 72 months (terms are generally shorter for used equipment than new)
• Collateral: The equipment itself — if you default, the lender takes the machine

Pros: You own the equipment outright, interest rates tend to be lower than other financing options, and there are no end-of-term surprises. Fixed payments make budgeting easy.

Cons: Banks are the slowest to approve and fund — expect 2–6 weeks for the full process. They also tend to have the strictest qualification requirements: strong personal and business credit, two or more years in business, and solid financials. Banks may also cap the loan-to-value ratio at 70–80% for older used equipment.

Best for: Established businesses with strong credit that can plan purchases in advance and want the lowest interest rate.

Option 2: Equipment Financing Companies

Equipment financing companies (also called specialty lenders or equipment finance companies) focus specifically on equipment loans and leases. Names you might encounter include Beacon Funding, Balboa Capital, Crest Capital, Currency Capital, and many others. Many equipment dealers and brokers have relationships with these lenders and can facilitate the process.

Typical terms for used equipment in 2026:

• Interest rates: 7% – 15%, depending on credit profile and equipment age
• Down payment: 0% – 20% (some offer zero-down programs for strong borrowers)
• Loan terms: 24 – 72 months
• Approval speed: Often same-day or next-day approval for amounts under $250,000

Pros: Faster approval and funding than banks — sometimes within 48 hours. More flexible qualification requirements. Many will finance older equipment that banks won't touch. Some offer seasonal payment structures (higher payments in busy months, lower in slow months) that work well for seasonal contractors.

Cons: Higher interest rates than banks. Some charge origination fees or documentation fees. Read the fine print carefully — some contracts include prepayment penalties.

Best for: Businesses that need to move quickly on equipment purchases, newer businesses that may not qualify for bank loans, or anyone buying older equipment that banks won't finance.

Option 3: SBA Loans

The Small Business Administration doesn't lend money directly, but it guarantees a portion of loans made by participating banks and lenders. This guarantee reduces the lender's risk, which can mean better terms for you.

The two most relevant SBA programs for equipment purchases are:

SBA 7(a) Loan: The most flexible SBA program. Can be used for equipment, working capital, and other business purposes. Loan amounts up to $5 million. Interest rates are typically prime + 2–3%, which in 2026 puts them around 7–9%. Terms up to 10 years for equipment.

SBA 504 Loan: Designed for major fixed asset purchases. Involves a three-party structure: you put down 10–15%, a Certified Development Company (CDC) funds 40%, and a bank funds the remaining 45–50%. Interest rates on the CDC portion are often very competitive. Minimum loan amount is typically $125,000.

Pros: Lower interest rates and longer terms than conventional financing. Lower down payment requirements (as low as 10%). Excellent for larger purchases.

Cons: Slow — SBA loans take 30–90 days to close, sometimes longer. Heavy paperwork. Strict qualification requirements including business plans, financial projections, and extensive documentation. Not practical if you need to move quickly on equipment.

Best for: Established businesses making large equipment purchases who can plan well in advance and want the most favorable long-term rates.

Option 4: Equipment Leasing

Leasing is fundamentally different from a loan — you're paying for the use of the equipment over a set period rather than paying to own it (though many leases include purchase options). There are two main types:

Capital Lease (also called a $1 Buyout Lease or Finance Lease):

This is essentially a loan structured as a lease. You make payments over the term, and at the end, you buy the equipment for $1 (or a nominal amount). For tax and accounting purposes, the equipment appears on your balance sheet as if you own it. You can take depreciation and Section 179 deductions.

• Monthly payments: Higher than an operating lease (because you're paying for the full value)
• End of term: You own the equipment for $1
• Section 179 eligible: Yes

Operating Lease (also called a Fair Market Value or FMV Lease):

With an operating lease, your monthly payments are lower because you're not paying for the full value of the equipment. At the end of the lease, you have three options: return the equipment, renew the lease, or buy the equipment at fair market value.

• Monthly payments: 15–30% lower than a capital lease or loan
• End of term: Return, renew, or purchase at FMV
• Section 179 eligible: Generally no (you don't own the asset)

Best for: Capital leases work well for businesses that want to own the equipment but prefer lease structuring. Operating leases are good for businesses that want lower monthly costs, plan to upgrade equipment regularly, or want to keep debt off their balance sheet.

Option 5: Rent-to-Own

Some dealers and brokers offer rent-to-own arrangements where a portion of your rental payments applies toward the purchase price. This is an increasingly popular option for contractors who want to try before they buy or who need equipment immediately but haven't secured traditional financing yet.

Typical structure:

• Monthly rental rate: Higher than market rental rates (because a portion goes toward equity)
• Equity accrual: Typically 50–75% of monthly payments apply toward purchase
• Term: 12 – 36 months before purchase option kicks in
• Purchase price: Agreed upon upfront, minus accumulated equity

Pros: Get the equipment working immediately with minimal upfront cost. Test the machine on your jobs before committing to buy. Easier qualification than traditional financing — many rent-to-own programs focus more on the equipment value than your credit score.

Cons: More expensive overall than buying outright or financing at a good rate. You're paying a premium for flexibility. If you decide not to buy, the equity portion of your payments may not be refundable.

Best for: New businesses, contractors with credit challenges, or anyone who wants to put equipment to work immediately while building toward ownership.

Section 179 Deduction: The Tax Advantage Every Equipment Buyer Should Know

The Section 179 tax deduction is one of the most powerful tax tools available to equipment buyers, and it's fully available in 2026. Here's how it works in plain language.

Normally, when you buy a piece of equipment, you depreciate it over its useful life — typically 5–7 years for heavy equipment. That means you deduct a fraction of the cost each year on your taxes. Section 179 lets you deduct the entire purchase price in the year you buy and place the equipment in service.

Section 179 limits for 2026:

• Maximum deduction: $1,250,000
• Phase-out threshold: $3,130,000 (the deduction begins to phase out dollar-for-dollar above this amount of total equipment purchased)
• Applies to: Both new AND used equipment (as long as it's new to you)
• Must be placed in service: During the 2026 tax year

What this means in practice:

Say you buy a used jaw crusher for $200,000 and finance it. Under Section 179, you can deduct the full $200,000 from your taxable income in 2026 — even though you financed the purchase and haven't actually paid the full amount yet. If your effective tax rate is 30%, that's a $60,000 tax savings in year one.

This is a powerful reason to finance rather than wait and save up. You get the tax deduction now, the equipment generates revenue now, and you pay for it over time. It's one of the smartest financial moves available to equipment buyers.

Important notes on Section 179:

• The equipment must be used for business purposes more than 50% of the time
• Your Section 179 deduction cannot exceed your taxable business income for the year (you can't use it to create a loss)
• Consult your accountant or tax professional for your specific situation — every business is different
• The deduction applies to the year the equipment is placed in service, not necessarily the year you sign the purchase agreement

Bonus Depreciation in 2026

In addition to Section 179, bonus depreciation is another tool for first-year deductions. However, bonus depreciation has been phasing down from its 100% level. In 2026, bonus depreciation allows a 40% first-year deduction on qualifying equipment (down from 60% in 2024 and 80% in 2023). It continues to decrease by 20% per year and will phase out entirely after 2026 unless Congress extends it.

Bonus depreciation can be used in combination with Section 179 and — unlike Section 179 — can create a net operating loss. Talk to your tax professional about the optimal strategy for your situation.

What Lenders Look For When Financing Used Equipment

Whether you're approaching a bank, equipment finance company, or SBA lender, here's what they're evaluating:

Your credit profile: Both personal and business credit scores matter. Most lenders want a personal credit score of 650+ for competitive rates. Under 600, you'll still find options, but expect higher rates and larger down payments.

Time in business: Two or more years is the sweet spot. Under two years, you'll face more scrutiny. Startups can still get financing, but typically through equipment-specific lenders rather than banks, and at higher rates.

Revenue and cash flow: Lenders want to see that your business generates enough cash to comfortably cover the new payment. A common benchmark is a debt service coverage ratio (DSCR) of 1.25 or higher — meaning your cash flow is 25% more than your total debt payments.

The equipment itself: The machine serves as collateral, so its value matters. Lenders consider the brand, age, hours, condition, and resale value. Well-known brands (Metso, Sandvik, Caterpillar, Komatsu, McCloskey) with strong resale values are easier to finance. Lenders may require an appraisal on higher-value used equipment.

Down payment: The more you put down, the easier it is to get approved and the better your rate will be. 15–20% down on used equipment is typical, though some lenders offer lower or zero-down options for strong borrowers.

Tips for Getting the Best Financing Deal

Get pre-approved before you shop. Knowing your budget and rate before you start looking at equipment puts you in a stronger negotiating position. Sellers take pre-approved buyers more seriously, and you can move faster when you find the right machine.

Compare multiple lenders. Rates and terms vary significantly between lenders. Get quotes from at least a bank, an equipment finance company, and a broker to compare. Even a 1% difference in interest rate on a $200,000 loan over 60 months saves you over $5,000.

Negotiate the equipment price separately from financing. Some sellers will steer you toward their preferred lender, which may not offer the best terms. Negotiate the purchase price first, then shop for the best financing independently.

Read the fine print. Watch for prepayment penalties, origination fees, documentation fees, and end-of-lease terms. A loan with a lower rate but a 3% origination fee may not actually be cheaper than one with a slightly higher rate and no fees.

Time your purchase for tax advantage. If you're planning to use Section 179, make sure the equipment will be placed in service before December 31 of the tax year. Buying in November or December still qualifies, as long as the machine is operational before year-end.

Keep your financial documents ready. Lenders will want to see two years of tax returns, recent bank statements, a profit-and-loss statement, and a balance sheet. Having these organized and ready speeds up the approval process dramatically.

Financing Through an Equipment Broker

Many equipment brokers — including RPG Equipment — have relationships with multiple lenders and can help facilitate financing as part of the purchasing process. This doesn't mean the broker is the lender; rather, they can introduce you to financing sources that specialize in the type of equipment you're buying.

The advantage of working through a broker's network is that these lenders understand the equipment. A generalist bank loan officer may not know the difference between a jaw crusher and an impact crusher, which can slow down the underwriting process. Lenders who specialize in heavy equipment know the market values, understand depreciation curves, and can move faster on approvals.

Ready to Buy? RPG Equipment Can Help

At RPG Equipment, we specialize in buying, selling, and brokering used heavy equipment from the US East Coast — crushers, screeners, grinders, shredders, conveyors, trommels, excavators, and more. We can help you find the right machine and connect you with financing resources to make the purchase work for your business.

Browse our current inventory at rpgequipment.com/equipment, or call us at (413) 478-2525 to discuss what you're looking for. We'll give you honest guidance on pricing, condition, and the best way to structure your purchase — whether you're paying cash, financing, or leasing.