Take your construction asset financing to new heights with the right partner: A guide for dealers and manufacturers

In the construction industry, securing and offering the appropriate asset financing for construction equipment plays a pivotal role in the success of a business. Whether you are an equipment manufacturer or a dealership, keeping your stock moving down the supply chain is best secured through the right asset financing. With several options in construction equipment leasing, and loans available today, the right partner to enable this choice for you and your customers is what can offer you an edge in the market.

The global Europe heavy construction equipment market is expected to rise at a CAGR of 6.78%, with a value of EUR €184.26 billion over the estimated forecast year of 2022-2030. With so much promise in the coming years, every business in this space must prepare to ride the high.

But what are some of the determining factors in choosing one partner over the other? Should it be innovative asset financing solutions or experience and reputation? Or something else?

We believe it is all that and more! The secret lies in looking for a partner that can offer a ‘total solution’ for construction asset financing.

Discover the perfect partner for construction equipment financing – dive into a world of possibilities with DLL by your side. Let’s connect!

A ‘total’ asset financing solution for construction businesses

Construction machinery typically moves from manufacturers to dealers to end users, with each touchpoint needing specific asset financing solutions.

Amidst all the evolving opportunities within the space, it is ideal for businesses to partner with a financing solutions provider that can offer ONE solution that addresses every scenario at every touchpoint.

Total financing is your end-to-end solution to meet the financing needs of manufacturers, dealers, and end-users. It offers tailored solutions to each stakeholder making the distribution, sourcing, and purchase airtight for each segment.

Manufacturers, for example, can leverage inventory finance to ensure their products move from storage facilities to dealerships without long wait times to enter the market, while dealerships using the same asset financing solution can avoid paying exorbitant upfront costs. Similarly, end-users can leverage several loan and lease options to purchase their construction equipment.

In fact, total solutions can also include financing for special cases such as equipment refurbishment financing or used and second-hand vehicle financing.

Let’s look at some of the key offerings under a total asset financing solution.

Floorplan finance

Floorplan finance streamlines the purchasing process for dealers by establishing a line of credit to acquire construction inventory from manufacturers without upfront payment. It usually manifests through a Pay-as-Sold (PAS) model where dealers pay the finance provider when the equipment leaves their facilities. For dealers, this solution allows for smoother cash flow operations and increased purchasing power, while manufacturers benefit from shorter days sales outstanding.

Discover the power of inventory finance with DLL and unlock new opportunities for your business. Visit our webpage for more information.

Construction equipment leases and loans

While inventory financing addresses the needs of manufacturers and dealers, construction equipment leases and loans provide a financial solution for end users to acquire machinery without upfront payments.

Lease options such as Fair Market Value (FMV) leases enable customers to pay in installments and choose between returning, upgrading, or purchasing at fair market value. Other leases like Operating Lease enable in-term upgrades to ensure your customers have access to the latest machinery in the market. Similarly, an innovative solution like the pay-per-use (PPU) model allows users to pay based on machinery usage, and not on the entire duration of the ownership.

Loans on the other hand, offer a straightforward credit extension with monthly installments and ownership certainty at the term's end. However, it limits coverage for maintenance and upgrade flexibility. opportunities for your business.

Offering the right lease and loan options to your customers means higher customer retention and increased loyalty. Explore options.

A total financing solution can also offer special financing for trade-ins and used equipment, supporting dealers in expanding their used-equipment inventory and managing cash flow. This not only extends the life of equipment, but it also contributes to sustainability by reducing steel and iron consumption and lowering carbon emissions.

Equipment refurbishment

Equipment refurbishment involves upgrading existing machinery or renovating used machinery to meet environmental guidelines, performance efficiencies and workforce safety standards. While many financing options are available for new or secondhand equipment purchases, the options become limited when businesses want to overhaul or refurbish their current stock of equipment. Partners that offer a total financing solution can make available opportunities for businesses to refurbish equipment and enhance their operational capabilities.

Sustainability is at the heart of everything we do. Explore how you can take your construction business green in 2024 in our blog.

5 attributes of the right asset finance partner

1. A global presence: Choose a partner that helps you leverage a global presence with local expertise and insights tailored to your market.
2. Dedicated support: Benefit from a dedicated support team ready to address service inquiries, facilitate responsive sales, and provide account managers to address your business needs.
3. Tailored solutions: Power your business with a versatile bouquet of offerings aligned with your business requirements, providing flexible financing options to support your growth trajectory.
4. Industry expertise: Opt for a partner that brings valuable market insights to the table, guiding you through a partnership filled with decades worth of expertise, wisdom, and success.
5. Strong financial stability: Feel confident with a partner that is financially stable though the rising and falling markets globally, much like DLL, a wholly owned subsidiary of Rabobank.

Conclusion

Elevating your construction asset financing is essential for success, yet many dealers and manufacturers miss out on an innovative total solution for financing. In a market with a 6.78% CAGR, finding the right ally is crucial, not only right now but in the future too. So, what you are looking for is to build a ‘Partnership of Tomorrow’.

A total solution covers not only the interests of manufacturers, and dealerships, but also your end customers, streamlining processes and offering various financing options tailored to the requirements of each group.

Delivering such unique solutions is not easy and not for every provider. The time is now to make a choice to work with a strong global ally that understands your business and knows how to steer it to success in the future.

As a player in this space, DLL ticks all these boxes and more. Explore the power of a total financing solution with us to propel your construction business forward.