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How To Finance Heavy Equipment: The Ultimate Guide to Fixed Asset Purchases

How to Finance Heavy Equipment.

Knowing how to finance heavy equipment is necessary in the manufacturing and construction industry, but it may not come easy to small business owners in South Africa. 

If you’re one of them, you’ll know that affordable equipment financing is hard to come by for the following reasons:

  • Tough application processes from traditional lenders that stop you from borrowing.
  • Steep borrower costs including high interest rates and fees that impact your cash flow.
  • Slow approvals that hinder project timelines and even lead to missed business opportunities.

Access to finance has been a key factor in the high failure rate of South African businesses since the pandemic, with the manufacturing sector being among the hardest hit.

It’s not all negative.

Manufacturing production is up across the country, with a 4.1% year-on-year increase in February 2024 reported by government body Stats SA.


Finance Heavy Equipment statistic.


Manufacturing and construction business owners who want to ride the crest of this wave will need to have several strategies in place, including heavy equipment financing that supports their business’s growth.

Knowing how to finance heavy equipment may not just be that necessary evil, but an important short-term competitive advantage.

There are a few questions you can ask on your quest as a small business owner in the manufacturing sector to finance heavy equipment, here they are:

1. What is equipment finance?

Equipment finance allows manufacturing and construction companies, from start-ups to established firms, to acquire essential equipment through external funding.

The entity behind these financing solutions might be a bank, but alternative equipment financing companies like Lula are becoming more common across South Africa. 

These help to free up working capital and offer financing solutions for businesses with less-than-perfect or even bad credit.

2. How does equipment finance work?

Obtaining a traditional term loan for equipment can be a major hurdle, with hefty deposits and credit score requirements getting in the way.

Some alternative equipment financing options, however, offer a simpler solution. Here’s how they work: 

Financing on your terms

The rigid lending structures of old are giving way to more flexible options with adjustable interest rates and personalised repayment terms.

Revolving finance is a good example of this. It is a dedicated credit line for equipment purchases which allows you to withdraw funds as needed. This allows you to spread the cost of excavators, loaders and other machinery into manageable monthly payments


Finance Heavy Equipment option.


No big deposits 

In contrast to the large upfront costs often associated with traditional small business loans, alternative financing options offer reduced or even no deposits. This frees up working capital for other areas of your business operations.

Fast and easy approval

The streamlined application process of alternative financing gets you the equipment you need quickly. You can avoid the lengthy delays and complex paperwork that come with bank loans, and seize time-sensitive opportunities.

3. How hard is it to get a loan for equipment?

The difficulty you have in accessing a heavy equipment loan will depend on your business’s background and the types of equipment you’re looking to get. 

Many lenders insist on reams of bank statements, balance sheets and a high credit score for equipment financing, blocking many businesses from securing funding

4. What credit score do you need for equipment?

Pinpointing a single credit score to finance heavy equipment is difficult because each lender has different criteria; however, it’s fair to assume that most traditional lenders look for a score of at least 700

Some alternative lending companies focus more on your business viability and project needs. They may be more flexible, working with businesses with lower credit scores, or even those with limited financial history.

5. How do you fund equipment purchases?

Securing manufacturing or construction equipment financing isn’t easy, but there is a process you can follow to improve your chances of accessing the finance you need. 

Assess your business needs

Every project is different so you’ll need to determine the type of equipment you need, be it bulldozers, excavators or forklifts for construction, or heavy machinery for manufacturing. Then you can research the rough cost of the equipment you plan to purchase.

Explore financing options

As mentioned, traditional lending can be restrictive, but looking at alternative business financing like that of Lula could provide you with the solution you’re looking for.

This is where a little time can be beneficial, as finding the right lender is one of the most important steps in the financing process.

Compare their interest rates, repayment terms and eligibility requirements, then see which best fits your annual revenue, credit history (even if not perfect) and project timelines.

Apply for financing

Every financing company requires you to submit personal details and documents, but the amount varies greatly. Some lenders only need basic information and have much quicker application processes

Get approved and purchase equipment

Alternative financing companies often have faster approval times than banks, allowing you to access equipment quickly.

Once approved, you can use the approved loan amount or credit line to finance your chosen equipment (new or used).

Make payments

The final step is, of course, making consistent monthly instalments according to your chosen financing programme‘s terms.

With some heavy equipment leasing options, you can own the equipment at the end of the lease term for a residual payment.

6. How long does it take to fund a heavy equipment purchase?

Many businesses need help with equipment lending because it often takes weeks to carry out the above process. This means they miss out on promotions or suffer from a work backlog. 

The heavy equipment financing model is designed to remove this problem. Indeed, you can use Lula’s Revolving Capital Facility to also finance your heavy equipment when you’re in a pinch. We streamline the approval process so that you can unlock financing in just 24 hours

Fast, flexible and secure, it’s changing the way businesses like yours are scaling their operations.

7. How to finance heavy equipment in 24 hours with Lula

At Lula, we believe that South African small businesses should have the right to secure fast and flexible working capital to finance heavy equipment

Business expansion leads to economic growth, which stimulates the economy and helps all of us. 

If you’re a small business owner looking to buy machinery, you’re moments away from finding out how to finance heavy equipment within 24 hours with our two funding models.

Revolving Capital Facility

Apply in minutes and tap into your own revolving line of credit especially for equipment financing


Finance Heavy Equipment benefits.

Capital Advance

Need a lump sum? No problem. Get a Capital Advance in 24 hours to secure that important piece of equipment.

You don’t need to worry about hidden (or changing) fees or early repayment fees for either product: pay off the balance when you want, at no extra cost.

So, what do you need to do to apply? Follow these three simple steps: 

  1. Go to Lula’s digital application form and apply in two minutes by filling out a few simple details.
  2. Get approved for funding in as quick as 24 hours.
  3. Get a personalised repayment plan with transparent costs that won’t change, no matter how much you borrow.

Set up your personal funding machine with Lula’s fair and flexible equipment financing.

*Your data is safe with us. Your bank shares just your latest read-only transaction data with us: we don’t save or store your username or password and you can unlink your bank account at any time.

Ready to fund the next stage of your business’s growth? Tap into your own pool of funds with Lula, one of South Africa’s quickest finance providers. 

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