Skid Steer Financing for Contractors

Know your credit score, how long you've been in business, and whether you want to own the machine or return it — then pick the state guide below that matches your job site.

What to Know Before You Pick a Path

Skid steers typically run $25,000–$90,000 new and $15,000–$50,000 used, so the financing structure you choose meaningfully affects monthly cash flow. The three levers that determine your options are credit score, time in business, and whether you want ownership at the end of the term.

How rates and terms break down by credit tier

Credit Profile	Typical APR (2026)	Down Payment	Common Term
700+ FICO (prime)	8–11%	0–20%	24–72 months
640–699 FICO (near-prime)	9–14%	10–20%	24–60 months
600–639 FICO (fair credit)	14–22%	20–25%	24–48 months
Below 600 (subprime)	20%+	25%+	24–36 months

Borrowers with a 640–699 score pay roughly 1–3 percentage points more than prime borrowers on the same loan amount. That gap on a $60,000 skid steer over 60 months can mean $3,000–$6,000 in additional interest — worth knowing before you accept the first offer you receive.

Loan vs. lease: the practical split

Equipment loans transfer ownership immediately. You can depreciate the machine or take the Section 179 deduction (up to $1,220,000 in 2026) in the year of purchase, which is a real advantage if you're profitable and owe federal taxes. Terms run 24–72 months; most bank and credit union programs cap at 60 months for used iron.

Equipment leases keep the machine off your balance sheet and typically require less money down. Fair-market-value leases let you return, buy, or upgrade at term end — a fit for contractors who rotate equipment as job types change. If you're in a market like Phoenix where compact track loaders and skid steers turn over quickly with shifting project types, a lease can be the cleaner exit — the financing options available to Phoenix-area contractors cover exactly that tradeoff between lease flexibility and loan ownership.

What trips contractors up

The two most common approval problems are debt-service coverage and business age. Most conventional lenders want to see that your total monthly debt payments don't exceed 25% of gross monthly revenue (a 1.25x DSCR minimum is standard). If you're carrying a heavy subcontractor line of credit or a recent truck note, run the math before you apply.

Business age is the other hard wall. SBA 7(a) loans — which can finance equipment up to $5,000,000 at 8–11% APR over terms up to 10 years — require 24 months of operating history. If you're under that threshold, conventional equipment loans through specialty lenders or manufacturer financing programs are typically your fastest path. Similar state-level constraints apply whether you're looking at bulldozer financing in Colorado or a skid steer note in the Carolinas — the credit and seasoning thresholds travel with the lender, not the machine.

Used equipment adds one more layer: lenders commonly cap loan-to-value at 80–90% of appraised value on machines more than five years old, and some exclude units over 10 years entirely. If you're buying a late-model used skid steer from a dealer with a reconditioning warranty, financing is usually straightforward. Private-party purchases require more documentation and occasionally an independent appraisal.

For SBA borrowers specifically: the guarantee covers up to 85% of the loan, which gives lenders more flexibility on marginal credit files — but the 30–45 day approval timeline means SBA is rarely the right tool if you need equipment on-site next week. Conventional equipment lenders and manufacturer captive finance arms can close in days.