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NGExpert financial copywriter
Mike maur 
Andrew Frazer 
Leo Tsuo 
Page written by Chris Godfrey. Last reviewed on December 4, 2024. Next review due October 1, 2025.
The US forestry, logging and lumber industries are worth almost 4% of US GDP, generating hundreds of $billions in revenues every year. As you may expect, industries this big require big investments in big machines, some of which can cost hundreds of $thousands to buy. However, purchasing equipment like this out of cash flow rarely makes economic sense – which is why smart foresters, loggers and lumber yards use forestry equipment finance to buy the machines they need. Read on to find out more.
Forestry equipment finance is a specialized form of equipment financing, Designed for businesses in the forestry, logging and lumber industries, this type of financing allows companies to acquire forestry management and production machinery without making a major dent in cash reserves. By spreading the cost of expensive machinery over time, forestry equipment finance helps businesses preserve working capital and better manage their cash flow while ensuring access to essential equipment.
You can finance almost every type of forestry machinery, including:
Forestry equipment finance falls into two general classes – business loans to buy the equipment, and leases that are long-term equipment rental agreements:
Although many types of business loans are suitable for buying forestry equipment, they all work with the same basic format: You borrow a sum of cash and then repay it over time. Interest charges and fees are added to the principal amount you borrow, and the lender retains a lien on the machinery during the term of the loan. At contract end you’ve paid off the loan and you own the equipment outright.
Advantages of business loans to buy forestry machinery
Disadvantages of business loans to buy forestry machinery
Leasing works differently from business loans. With a lease, you’re not buying the equipment, you’re entering into a long-term rental agreement. Depending on the type of lease you choose, (finance lease or operating lease), you may have the option to buy your forestry machinery at contract end for a pre-agreed sum, (which could be as low as $1 but is typically the residual value of the machine – which means what it’s worth in used condition).
Because you’re not repaying the whole cost of the equipment, leasing usually requires lower monthly payments than a business loan. You may also pay a smaller down payment – perhaps equal to one or two month’s repayment instalments.
If you choose not to buy the machinery at the end of the lease, (or you have chosen an operating lease that forbids it), the equipment goes back to the lender. You would then need to take out a new lease and obtain new machinery. (Which could allow you to obtain more modern and up to date equipment).
Some lessors (lenders) may give you the option to extend the lease if you prefer to keep the equipment but do not wish to pay the residual.
Advantages of business loans to buy forestry machinery
Disadvantages of leasing forestry machinery
Forestry equipment finance is suitable for businesses that work in the US forestry, logging and lumber industries. Although every lender will have their own qualifying requirements, borrowers will usually need the following to obtain a forestry equipment loan:
Depending on the type of loan you are seeking, forestry equipment financing can be complicated. The sums you can borrow, the interest rate you’ll pay and other terms and conditions will vary from one lender to another. It therefore makes sense to shop around before settling on a deal. You can do this by approaching banks, credit unions and online lenders one by one, or you can use the services of a loan marketplace that will immediately introduce you to a choice of forestry equipment financing from different lenders. Some marketplace platforms can also give you advice and help you with the application process. This can be especially useful for borrowers who have never taken out an equipment loan before.
Just because you can’t qualify for standard forestry equipment finance, it doesn’t mean you can’t obtain the funding you need. Alternative financing options include:
Available from lenders who are part of the US Small Business Administration lender network, SBA microloans can be obtained up to $50,000 in value. Designed for organizations that have difficulty accessing traditional business finance, SBA microloans typically come with more relaxed qualifying rules and can be obtained with FICO scores as low as 500, or even with no credit score at all.
Business grants are free money, they do not have to be repaid if you spend them properly and in most cases, funders do not consider credit scores when considering applications. The good news is, there are thousands of grants available across the US and they are provided by federal, state and local governments as well as foundations, non-profits and other organizations. The downside to this route is the fact that small business grants are usually highly competitive, slow to fund and often come with strict qualifying rules.
No matter if you’re seeking your first forestry equipment loan or you’re a seasoned borrower, working with business finance experts can make all the difference when applying for funding. Contact Swoop to discuss your borrowing needs, get help with your application and to compare high-quality forestry equipment financing from a choice of lenders. Cut to the chase. Register with Swoop today.
Written by
Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.
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