Heavy machinery financing and leasing: which option is right for you?

The five ways to pay for a machine

Before asking for a rate, decide the structure. Each one splits ownership, risk and cash flow differently. With a loan the machine is yours and the bank usually takes it as collateral; with a lease the bank buys the equipment and leases it to you, and at the end you exercise the purchase option or not.

• Loan: you own it from the start; you pay a down payment and installments.
• Finance lease: you lease it for most of its useful life and can buy it at the end for the agreed residual value.
• Operating lease: you lease it for a shorter period; at the end you return it, renew or, depending on the contract, buy it.
• Rental: by the day, week or month, with no long commitment (RentaCentro, a group company).
• Installments on a participating card: for light equipment and furniture, not heavy machinery.

Loan or lease: the real difference

The difference isn't the installment, it's who owns the machine while you pay for it. With a loan it's registered in your name, you can sell it or trade it in whenever you want (paying off the balance) and you carry its resale value. With a lease the legal owner is the lender until you exercise the purchase option; you operate it, insure it and, under a finance lease, usually maintain it.

The down payment, the collateral required and the term are set by each lender based on your profile and the equipment. An asset with good resale and parts support in the country — a backhoe loader or a brand-name excavator with a workshop nearby — is usually easier to finance than equipment with no secondary market.

Taxes and balance sheet: check with your accountant

You'll often hear that leasing is “100% deductible and off-balance-sheet.” That isn't a rule: it depends on the accounting standard your company applies and your country's tax law. Under full IFRS (IFRS 16), most leases go on the lessee's balance sheet as a right-of-use asset and a liability; only short-term or low-value leases stay off, as an exception. IFRS for SMEs and local standards may treat it differently, and whether rent, interest or depreciation is deductible is set by each country's law.

Before choosing for tax reasons, ask your accountant to compare both structures with your numbers.

How to compare two financing offers

Get each offer in writing and put them in the same table. The monthly installment is the last thing to look at: a low installment with a long term, fees and a high residual value can cost more than a higher, shorter one. Check these points in every proposal:

• Effective annual rate, not just the nominal one: the effective rate reflects compounding; also ask for the total cost with fees and insurance.
• Fees: origination, administration, appraisal or structuring.
• Equipment insurance (and credit insurance, if any): whether it's included in the installment or paid separately.
• Down payment or first rent, and whether they accept your used equipment toward it.
• Term: a longer term lowers the installment but raises total interest.
• Prepayment or early-termination penalty.
• Purchase option and residual value: what you pay at the end to keep the machine.
• Who pays for maintenance, repairs and road taxes.
• Currency: if you're financed in dollars and invoice in quetzales or córdobas, you carry exchange-rate risk.

Which option fits? Decide by usage

The right structure comes from how many hours and for how long you'll use the machine. If you'll use it little, no way of financing the purchase beats renting it; if you'll use it every day for years, rental ends up costing more than the installment.

The site doesn't publish a payment simulator with rates, because the bank sets the terms based on your profile and they vary by country. What you can calculate today is whether renting or buying makes sense, in the rent-vs-buy calculator, and what each operating hour costs, in the cost-per-hour one (both at /calculadoras).

What to prepare before you apply

Each bank asks for its own list, but in general it reviews the company's financial and legal information: recent financial statements, tax returns, incorporation documents and the legal representative's, and credit references. If you're an individual, they'll ask for proof of income.

Add two things that help: the formal quote for the equipment and the contracts or jobs it will work on. A bank finances a machine that already has work lined up with more confidence.

How to request financing with ConstruMarket

Loan or lease financing applies to heavy machinery, backhoe loaders and Bobcat equipment; inspected used equipment can also be financed in the group's countries, subject to approval. Request it together with the equipment: in the quote form choose “Financing” as the payment method, or fill out the credit application at /financiamiento. A credit advisor contacts you during business hours and gives you the terms in writing so you can compare them.

If you have a used machine, the trade-in plan (/trade-in) lets you put it toward the new unit; ask whether the bank accepts it as part of the down payment. For light equipment and furniture the path is different: installments on a participating credit card.

Where to apply: countries and branches

Grupo ConstruMarket is an authorized Komatsu dealer in El Salvador, Guatemala (CMARKET), Nicaragua and Panama, and an authorized Doosan Bobcat dealer in El Salvador and Panama. You can request financing at any branch or online: in El Salvador, Zaragoza, Antiguo Cuscatlán and San Miguel; in Guatemala, Mixco, Río Hondo and Xela; in Nicaragua, Managua; and in Panama, Panama City.

If you only need the equipment for one job, RentaCentro, the group's rental company, operates in all four countries; its fleet includes, among others, the Komatsu PC200 excavator and the WB93R backhoe loader. Availability varies by country.