Why Construction Is a Top Vertical
Construction companies spend massive amounts on equipment. Excavators, skid steers, cranes, dump trucks, concrete equipment, compactors, pavers -- the list goes on, and none of it is cheap. A single excavator can cost anywhere from $50,000 to over $500,000 depending on size and configuration. Cranes can exceed a million dollars. Even smaller pieces like skid steer loaders run $30,000 to $80,000.
The demand is constant and driven by forces that are not going away. Federal and state infrastructure spending continues to grow. Housing construction fluctuates but never disappears. Commercial development -- warehouses, data centers, retail, medical facilities -- keeps contractors busy year-round in most markets. When one sector slows, another picks up.
For brokers, this translates into a deep, recurring pipeline. Contractors do not buy one piece of equipment and stop. They replace worn-out assets, add capacity for new projects, and upgrade to newer models. A single contractor relationship can produce multiple deals per year across different equipment types.
The commission math works well too. On a $150,000 excavator deal at 4% to 6% commission, you are looking at $6,000 to $9,000 per transaction. Close two or three of those a month and you have a serious business. Construction gives you the deal size and volume to make that realistic.
Common Construction Equipment Types
Knowing the equipment is part of being credible in this space. You do not need to operate a crane, but you need to know what it costs, who buys it, and what lenders think of it as collateral. Here are the most common equipment types you will encounter.
Excavators
$50,000 - $500,000+The backbone of most job sites. High demand, strong resale.
Skid Steer Loaders
$30,000 - $80,000Versatile, compact. Popular with smaller contractors.
Dump Trucks
$80,000 - $200,000Essential for earthmoving, hauling, and site prep.
Cranes
$100,000 - $1,000,000+Large deal sizes. Specialized lenders often required.
Backhoe Loaders
$50,000 - $120,000Dual-purpose machines. Common on utility and residential projects.
Concrete Mixers
$40,000 - $180,000Steady demand from concrete and foundation contractors.
Compactors / Rollers
$30,000 - $150,000Used in road construction, site prep, and paving.
Bulldozers
$75,000 - $400,000Land clearing and grading. Strong collateral value.
Wheel Loaders
$60,000 - $300,000Material handling on construction and mining sites.
Boom Lifts / Aerial Platforms
$30,000 - $150,000Common in commercial construction and maintenance.
Pavers
$80,000 - $500,000Road and parking lot construction. Seasonal demand.
Telehandlers
$40,000 - $120,000Jobsite material placement. Growing demand in commercial projects.
Used equipment makes up a significant portion of construction deals. Many contractors buy two- to five-year-old machines to save on cost while still getting reliable performance. Lenders generally finance used construction equipment as long as it is in reasonable condition and from a recognized manufacturer. Knowing whether your deal involves new or used equipment -- and which lenders prefer which -- is critical for matching.
Typical Borrower Profiles
Construction borrowers are not one-size-fits-all. You will encounter a wide range of profiles, and understanding them helps you match the right deal to the right lender.
Established General Contractors
Ten or more years in business, strong credit, solid financials. These borrowers qualify with most lenders and get the best rates. They tend to buy larger equipment and finance multiple pieces per year. Great clients because they come back repeatedly.
Small to Mid-Size Specialty Contractors
Excavation companies, concrete contractors, paving crews, demolition firms. Many have been in business three to ten years. Credit ranges from strong to mid-tier. Revenue can be seasonal. These are the bread-and-butter deals in construction finance -- consistent, fundable, and always in need of equipment.
Owner-Operators and One-Truck Shops
Individual operators who run a small crew and a few pieces of equipment. Time in business varies. Some have excellent credit; others are rebuilding after a rough patch. These borrowers need a broker who understands their situation and knows which lenders serve their profile.
Newer Contractors (Under Two Years)
Startups in construction are common. An experienced operator leaves a company and starts their own business. They may have strong industry experience but limited time in business and thin financials. Specialized lenders and startup programs exist for this segment, but the rates are higher and the terms are stricter.
Credit-Challenged Borrowers
Contractors who have gone through financial difficulty -- maybe a slow-pay period during a downturn, a tax lien, or a personal credit issue. These deals require lenders who specialize in challenged credit. The commissions can be higher because the rates are higher, but the deal packaging needs to be more detailed to get approvals.
The key takeaway: you do not need perfect borrowers to build a construction book of business. You need to know which lenders serve which profiles and package accordingly. A broker who can place a credit-challenged deal is often more valuable than one who only works with prime borrowers.
Lender Landscape for Construction
Many lenders actively seek construction equipment deals because the collateral is strong. Construction equipment from major manufacturers like Caterpillar, John Deere, Komatsu, and Volvo maintains resale value well. There is an active secondary market, which means if a borrower defaults, the lender can recover meaningful value by remarketing the asset. That collateral strength gives lenders confidence.
That said, lenders differ significantly on the details. Some focus exclusively on prime credit borrowers with strong financials and two or more years in business. Others specialize in near-prime or challenged credit. Some will finance used equipment up to 15 years old; others cap at 7 years. Deal size minimums and maximums vary, as do documentation requirements.
Key Lender Differences to Track
- Credit tier requirements -- prime only, near-prime, or full-spectrum including challenged credit
- Minimum and maximum deal size -- some lenders start at $25K, others at $100K
- New versus used equipment policies -- age limits, condition requirements, acceptable manufacturers
- Seasonal revenue tolerance -- how they evaluate borrowers with uneven monthly cash flow
- Time in business minimums -- two years is common, but some work with startups
- Documentation levels -- app-only up to $150K versus full financials for larger deals
- Advance rates -- how much of the equipment cost they will finance (80%, 90%, 100%)
As a broker, your value is knowing which lender is the best fit for each deal. Sending a credit-challenged borrower to a prime-only lender wastes everyone's time and damages your reputation. Sending a strong borrower to a challenged-credit lender means they pay more than they should and you lose credibility. Lender matching is the core skill, and in construction it matters because the borrower profiles are so varied.
How to Find Construction Leads
Construction leads are everywhere if you know where to look. The industry is large, equipment-dependent, and filled with business owners who finance rather than pay cash. Here are the best sources.
Equipment Dealers
This is the number one source. Caterpillar, John Deere, Kubota, Case, Volvo, and Bobcat dealers sell equipment daily. Their buyers need financing. Walk into the dealership, introduce yourself to the sales manager, and position yourself as a financing partner. When their in-house captive financing declines a buyer or cannot offer competitive terms, you step in. One strong dealer relationship can feed you multiple deals per month.
Contractor Associations
The Associated General Contractors (AGC), National Utility Contractors Association (NUCA), and local builder associations are packed with your target market. Attend chapter meetings, sponsor an event, or simply join and start networking. These organizations exist to support contractors, and financing is always a topic of interest. Being the broker that the association knows and trusts gives you a significant edge.
Job Site Visits
Drive by active construction sites and note the company names on the trucks, equipment, and signage. Look up those companies, find the owner or operations manager, and reach out. You already know they are active and using equipment. The conversation is natural: "I noticed your crew working on the site at [location]. I work with contractors on equipment financing. Are you looking at any new equipment this quarter?" Simple, direct, and relevant.
Commercial Real Estate Developers
Developers hire general contractors, who hire subcontractors, who need equipment. Building a relationship with a developer gives you visibility into upcoming projects and the contractors who will staff them. When a major project breaks ground, a wave of equipment purchases follows. Be positioned before the project starts.
General Contractors
GCs manage projects but rely on subcontractors who own their own equipment. A GC who trusts you will refer their subs to you when those subs need to finance a new piece of equipment to take on a project. One GC relationship can connect you to dozens of subcontractor prospects.
Online and Trade Listings
Contractors searching for equipment on sites like Machinery Trader, Equipment Trader, and IronPlanet are actively in buying mode. While you cannot always reach them directly through these platforms, the listings tell you what is being bought and sold in your market. Use that intelligence to inform your outreach to dealers and contractors in the area.
Deal Packaging Tips for Construction
Construction deals have nuances that matter to lenders. Packaging them well means anticipating what the underwriter needs and presenting it upfront instead of going back and forth on stipulations.
Include Detailed Equipment Specs
Make, model, year, hours (for used equipment), serial number if available, and condition. Lenders underwrite the collateral as much as the borrower. A 2022 Cat 320 excavator with 1,200 hours is a different risk profile than a 2015 unit with 8,000 hours. Be specific.
Describe the Use Case
What project or type of work will the equipment be used for? A lender wants to know this is essential-use equipment, not a speculative purchase. "Borrower is adding a second excavator to support a $2M site development contract" tells a story that makes the deal make sense.
Address Seasonality Upfront
If the borrower has seasonal revenue swings, do not let the lender discover it on their own. Write a cover note explaining the pattern. Show 12 months of bank statements. Point out the strong months and explain the off-season. Lenders who work construction expect this, but you still need to present it clearly.
Prepare for the Credit Story
Many construction borrowers have imperfect credit. Maybe there was a slow period during the last downturn, or a tax lien from a dispute with the IRS. If there is a credit issue, write a brief explanation in your cover note. Lenders are far more receptive to a deal that comes with a clear narrative than one where they have to guess why the credit took a hit.
Include a Vendor Quote or Invoice
Every deal needs documentation of what is being purchased and at what price. Get a formal quote from the dealer or seller that includes the equipment description, pricing, delivery terms, and any trade-in information. A clean quote accelerates the approval process.
Know the Collateral Position
If the borrower has existing equipment that is paid off, mention it. Free-and-clear assets show the lender that the borrower has skin in the game and a track record of paying off equipment. It can also serve as additional collateral if needed to strengthen a marginal deal.
The brokers who consistently fund construction deals are the ones who think like underwriters. Before you submit, ask yourself: if I were the lender reviewing this file, what questions would I have? Then answer them in the package. That level of preparation is what separates a professional broker from someone who is just forwarding applications.
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