Can I Get Financing for Used Heavy Equipment in the Philippines?

Yes, financing options for used heavy equipment are available in the Philippines, making it easier for businesses to acquire the machinery they need without paying the full amount upfront. Many contractors and business owners prefer financing as a way to manage cash flow while still getting the equipment necessary for their operations. Here’s what you need to know about financing used heavy equipment in the Philippines:

1. Bank Loans for Used Equipment

One of the most common ways to finance used heavy equipment is through a bank loan. Several banks in the Philippines offer loans specifically designed for purchasing equipment, including used heavy machinery. Some key points to consider when applying for a bank loan:

• Loan Amount: Banks may finance up to a certain percentage of the total value of the equipment, often around 70-80%. The rest will need to be paid upfront as a down payment.
• Loan Terms: The loan repayment period can vary, but it typically ranges from 1 to 5 years, depending on the cost of the equipment and the bank’s terms.
• Interest Rates: Interest rates for equipment loans can vary depending on the lender and the applicant’s creditworthiness. Rates are typically higher for used equipment than new, due to the increased risk associated with older machinery.

2. In-House Financing from Equipment Dealers

Many heavy equipment dealers, including those selling used trucks, backhoes, excavators, and dump trucks, offer in-house financing to make purchasing easier. In-house financing has the benefit of simplifying the process, as you don’t need to go through the lengthy bank approval process.

• Flexible Terms: In-house financing can sometimes offer more flexible terms and less stringent requirements, making it an attractive option for businesses with less-than-perfect credit histories.
• Down Payment: A down payment of around 20-30% of the equipment’s cost is typically required. Some dealers may also offer 0% interest for a specific period if you qualify.
• Approval Time: Financing through equipment dealers is often faster than going through a bank, which means you can get the equipment you need more quickly.

3. Leasing Options

Leasing is another option for businesses that want to use heavy equipment without committing to full ownership. Leasing companies in the Philippines offer a range of options for both new and used heavy equipment.

• Operating Lease: This is similar to renting, where you pay monthly installments for the use of the equipment but don’t own it at the end of the term. After the lease ends, you can return the equipment or renew the lease.
• Finance Lease: This is a form of leasing where the lessee has the option to purchase the equipment at the end of the lease term. It’s suitable for businesses that plan to keep the equipment long-term.

Leasing can be a good option if you need equipment for a short-term project or prefer not to own the equipment outright.

4. Government Programs for Equipment Financing

The Philippine government also has financing programs aimed at helping businesses access the equipment they need for their operations. The Department of Trade and Industry (DTI) and other government-backed agencies may offer support for purchasing used machinery, especially for small and medium enterprises (SMEs).

• SME Financing: The DTI provides loan programs to help SMEs acquire equipment, including used machinery. These loans often have lower interest rates and longer repayment periods compared to traditional bank loans.
• Other Government Institutions: The Development Bank of the Philippines (DBP) and Land Bank of the Philippines also offer financing for machinery and equipment to local businesses.

5. Online Financing Platforms

With the rise of digital solutions, some online financing platforms now offer loans specifically for purchasing used equipment. These platforms usually work with multiple lenders and offer faster approval processes and more flexible terms.

• Quick Approval: Online platforms can provide quick loan approvals, allowing businesses to get the financing they need within a short period.
• Competitive Rates: These platforms may offer competitive interest rates depending on the lender and your business profile.

6. Considerations When Financing Used Heavy Equipment

When financing used equipment, it’s important to consider the following:

• Credit History: Lenders will assess your creditworthiness, so having a good credit score can help you secure better terms and lower interest rates.
• Down Payment: Expect to pay a down payment, which typically ranges from 20% to 30% of the total cost of the equipment.
• Interest Rates: The interest rate on used equipment loans can vary depending on the age of the equipment and your credit profile. Be sure to compare rates from different lenders.
• Documentation: Be prepared to submit business documents, financial statements, and other information to the lender for approval.
• Equipment Condition: For used equipment, lenders may require an independent inspection to assess the machine’s value and condition. Make sure the equipment you plan to finance is in good working condition to avoid complications during the loan process.

7. What Types of Equipment Can Be Financed?

Financing is available for a wide range of used heavy equipment, including:

• Excavators
• Backhoes
• Dump Trucks
• Bulldozers
• Cranes
• Forklifts
• Concrete Mixers
• Generators

As long as the equipment is in good working condition and has a reasonable resale value, it can typically be financed through various lending options.

Conclusion

Yes, financing is available for used heavy equipment in the Philippines, and businesses have several options to explore, including bank loans, in-house financing, leasing, and government-backed programs. By carefully considering your financing options and the terms offered, you can make an informed decision that will help your business grow while managing cash flow effectively.

If you’re looking to purchase used excavators, dump trucks, or backhoes, TJT Corp can assist with not only helping you find the right equipment but also guiding you through financing options available for your purchase. Contact us today for more information on how we can support your equipment needs.