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Construction Equipment Financing Part 2: Navigating Financing for Startups

Construction Equipment Financing Part 2: Navigating Financing for Startups

Starting a construction business from scratch can be an exciting venture, but it also comes with its own set of challenges, particularly when it comes to securing the necessary equipment financing.

As a new business, it can be more challenging to establish credibility, build relationships with lenders and find financing solutions tailored to your needs. Here are some key challenges and strategies to address them.


Challenge: As a new construction startup, you may lack an extensive financial history, making it difficult for lenders to assess your creditworthiness.


  • Personal Credit: Leverage your personal credit history if it’s strong. A good personal credit score can provide some assurance to lenders.
  • Co-Signer: Consider having a co-signer with a strong credit history to vouch for your startup’s reliability.
  • Start Small: Begin with smaller equipment acquisitions and demonstrate responsible financial management to build a positive credit track record.
  • Banking Relationship: Access to capital, whether cash on hand or an established working capital line of credit, will help prospective lenders understand your creditworthiness.

Volvo SD110C Soil Compactor


Challenge: Lenders often prefer businesses with a proven track record, and your startup may lack the industry experience that inspires confidence.


  • Industry Expertise: Showcase your industry knowledge and experience in your business plan. Highlight any team members’ relevant experience where you can.
  • Mentorship: Seek out mentorship or advisory relationships with experienced professionals in the construction field. Their guidance can add credibility to your startup.


Challenge: Establishing credibility can be a hurdle as lenders may be cautious about working with an unproven business.


  • Strong Business Plan: Develop a comprehensive business plan that outlines your vision, market research, financial projections and how the equipment will contribute to your success. Be prepared to communicate your vision and success on a regular basis.
  • Client References: If you’ve worked on projects as an individual or in a different capacity, gather references from satisfied clients to vouch for your capabilities.
  • Work on Hand: Detaining the jobs you’ve secured with completion percentages will help demonstrate your commercial viability.
  • Certifications and Licensing: Obtain relevant industry certifications and licenses to demonstrate your commitment to professionalism and quality work.

Volvo EW140 Wheeled Excavator


Challenge: As a startup, you may struggle to find financing solutions that align with your unique needs and budget constraints.


  • Bundled Offers: Rates are important but consider the full financing package. Look for offers that bundle services like warranties, fuel guarantees, telematics systems, maintenance programs and more.
  • E-Mobility: Consider purchasing electric equipment for your new business. Volvo dealers can utilize an online tool to help research federal, state and local incentives (like grants) that may be available to help lower your investment costs.
  • Rental Purchase: Consider renting to own. Some dealers will offer an RPO (Rental Purchase Option) and will apply a portion of your rental payment toward the principal amount. You’re effectively building your down payment over time.

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Challenge: Establishing relationships with lenders can be challenging, as you may not have pre-existing connections in the industry.


  • Networking: Attend industry events, conferences and trade shows to connect with potential lenders, industry peers and suppliers. Building a network can open doors to financing opportunities. If you attend shows where Volvo Construction Equipment is an exhibitor, Volvo Financial Services is likely there too — be sure to stop by and introduce yourself.
  • Financial and Industry Experts: Consider working with financial experts like Volvo Financial Services. Our team members have over 150 years combined experience in construction equipment financing. We know the construction and mining business and can help coach you for success.

Implementing these strategies can help pave the way for a successful new business launch in the construction industry. With the right equipment financing and flexibility, you can be on your way to financing even more heavy equipment as you need them down the road.

By Matt Deloglos, Volvo Financial Services

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