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Page written by Arabella McAvoy. Last reviewed on December 16, 2024. Next review due March 1, 2026.
You see them on construction sites, in factories, on farms and at the port. High, low, mobile or fixed, industrial cranes are everywhere and anywhere – providing major muscle when big things are on the move. Without a doubt, many industries and businesses could not function without these huge machines. But with price tags often in the Rmillions, buying them out of working capital can often be impossible – which is why savvy business owners use crane finance to take the strain.
Crane finance is a specialized form of equipment financing, Designed for businesses in the construction, manufacturing, agriculture, marine, logistics and other heavy equipment industries, this type of financing allows companies to acquire cranes and related machinery without making a major dent in cash reserves. By spreading the cost of expensive machinery over time, crane finance helps businesses preserve working capital and better manage their cash flow while ensuring access to essential equipment.
Just as there are many types of crane, so there are many ways to finance them. Popular crane finance options include:
The most common way to finance a new or used crane. With lease-to-own, you enter into a long-term rental agreement, making an initial down payment and then paying regular monthly payments over a fixed-term contract. When the agreement comes to an end, you buy the crane for either the projected residual value of the machinery at contract end – also known as a ‘balloon payment’ – or for an agreed final sum – which can be as low as R1. Lease-to-own may deliver significant tax advantages over traditional ‘hire purchase’ agreements, where you buy the crane in equal monthly instalments and no balloon payment at contract end. With lease-to-own, crane maintenance, servicing and insurance costs are typically your responsibility, although some lenders may bundle these extras into the leasing cost.
Buying or leasing a used crane that is in good condition and still has years of life left in it can be a cost-effective way to obtain the lifting machinery you need. However, be aware that some lenders may set strict age limits on used cranes, restricting the types of crane you can buy.
If you’re looking to buy a used crane at auction, your chances of success will be improved by obtaining pre-approval for an auction loan before you head to the auction house. Pre-approval for a loan up to a set limit gives you confidence to make a bid and ensures you can meet the crane’s purchase price without hurting cash flow. Once you buy the crane, the pre-approval converts to a standard term loan that you pay back monthly.
Working capital loans are designed to cover dips in cash flow or fund extraordinary capital expenditures. Buying a crane falls into the latter category. Common working capital loans include:
Organizations with weak credit may find it more challenging to buy or lease crane equipment, but it’s not impossible. Specialized financing programs for businesses with less than stellar credit include:
Does it make sense to finance your next crane purchase? Like all types of financing, crane loans come with advantages and disadvantages:
Pros
Cons
Crane finance can be used to obtain almost any type of crane, including:
Terms and conditions for crane financing are often complex and will vary from one lender to another. Sometimes, the differences between offers could add up to thousands of dollars over the life of the loan. 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 crane financing deals from a range of 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 a crane loan before.
No matter if you’re seeking your first crane 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 crane finance from a choice of lenders. Let us do the heavy lifting for you. Register with Swoop today.
Written by
Arabella is a former BBC business journalist who began her career as a policy analyst at the Bank of England and Financial Conduct Authority, and more recently worked in the communications and policy team at the British Business Bank.
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