Heavy equipment and fleet financing options: meeting the needs of Alaska businesses.

• Author: Barbour, Tracy
• Position: FINANCIAL SERVICES

Alaska businesses have a variety of financing options to help them procure vehicles, heavy machinery, and other equipment for their operations. Whether they need a single truck or hundreds of items, there's an assortment of institutional, dealership, and manufacturer financing, as well as leasing solutions that can help.

Heavy Equipment Financing Options

Credit-worthy buyers in the market for heavy equipment have numerous financing options available through dealerships throughout Alaska. For example, Yukon Equipment offers a complete line of Case construction and agriculture equipment, as well as equipment trailers, street sweepers, industrial vacuum trucks, and airport and road snow blowers. With locations in Anchorage, Fairbanks, and Wasilla, Yukon carries a total of forty-four product lines.

A subsidiary of Calista Corporation, Yukon offers financing through companies like Case Credit, John Deer Credit, and Cat Finance. Manufacturer-owned lenders often tout longer terms, lower down payments, and other incentives. "If a customer has their own financing, we'll give them a quote on our financing, and they usually take the best deal," says Yukon Equipment President Charles Klever. "About 75 percent of the time, the dealer provides the financing because we can give them a better deal."

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Sometimes buyers can land zero-percent-interest deals on qualifying machinery, which is normally new inventory. These no-interest specials are typically available in lieu of a cash discount for a set number of years. "We get twenty pages of programs every quarter from our manufacturers," says Klever, who has been involved in equipment and dealership financing since 1978. "They're trying to help dealers move products."

Dealers like Yukon also offer funding from other outside sources, as well as internal financing such as rent-to-own and short-term purchase contracts. Rent to own is being used more and more as some equipment users want to "work into" their down payment, Klever says. "They also want to wait until they get the next job or next phase of the job in order to effect the purchase of equipment."

Klever adds, "By using the net rental payments to reduce the amount to finance, the buyer gets the benefit of working into the equipment and having the down payment made by the results of the job."

Whether using internal or external financing, buyers will find that most dealers are willing to be flexible to accommodate their purchase. For instance, although financing program terms like zero percent down are pre-established, some features such as the down payment, length of term, payment skipping, and trade-in are customized for each buyer and each transaction.

When it comes to applying for financing, the...