Financing the construction equipment of the future

Oct 3, 2022


Trade shows can be an opportunity for the construction industry to view the exciting new technologies and equipment that will influence the future of their industry. However, with innovation comes new financing challenges. DLL’s experts share their insights on what the future of the construction industry might hold, and how asset finance will play a part.

Traditionally, the construction industry has been slower to adopt technological advancements than other industries. However, the potential benefits of adopting such advancements and the growing amount of legislation introduced in efforts to reach the carbon emission reduction targets set by the Paris Agreement, have made it clear that changes are ahead for construction.

Electrification: lower emissions construction
We are already seeing a shift towards businesses exploring electric construction equipment. This demand is being driven not just by legislation, but also by an increased appreciation of the benefits of using electric equipment compared to equipment with internal combustion (IC) engines. These benefits include reduced service and maintenance requirements, safety improvements, and the lower carbon footprint of such equipment as businesses strive to increase their sustainability efforts and reduce the impact of their operations on the environment.

DLL monitors local country regulations and available subsidies that could help companies finance the electrification of their equipment as part of their efforts to operate more sustainably.

Electrification has increased in pace in sectors, such as material handling and the construction industry can expect to follow a similar path. Although a limited range of electric equipment is currently available, this shift will be a key trend in the move to a more technologically advanced construction industry.

Automation: human-free construction
The material handling and manufacturing industries have been among the pioneers of equipment automation, with automated equipment being especially well suited to the repetitive tasks of material handling, and we anticipate the equally successful introduction of automation in construction applications in the future. The movement of materials around a construction site using off-road robotic vehicles is one such likely application.

Companies are also exploring how to utilize automation in the act of construction itself, such as brick laying robots. Meanwhile, advancements in telematics and sensor technologies mean that certain construction equipment could require increasingly less operator intervention in the future. Could machines eventually become operator-free? If so, this could assist companies not only with managing increasing labor shortages but also with improving site safety.

Digitalization: A new way to acquire equipment
The way we acquire equipment is also changing. The COVID-19 pandemic saw businesses and consumers turn to eCommerce, and they continue to do so. This trend will likely influence how manufacturers sell construction equipment in the years ahead.

From its close relationships in the construction equipment industry, DLL has seen that customers are increasingly willing to purchase or lease even high value assets online. This indicates a shift away from traditional dealer showrooms and one-on-one sales interactions to a more digital experience. For leading manufacturers, small dealership locations may be replaced by a sophisticated international online presence, which is then supported by a small number of in-country facilities, which customers making particularly large investments can utilize.

Financing the future of construction
With new technological advancements will come new financing hurdles. Some financial institutions may shy away from financing new technologies with no track record of residual or resale values. For the end user, this could drive up monthly instalments and increase overall costs.

DLL maps trends and developments across the construction industry. Together with our advanced knowledge of the design and development of new products and close relationships with our equipment manufacturing partners and customers, this allows us to co-create customizable finance solutions ready for our customers when new products are released to market.

Owning vs. Leasing
Currently, users in the construction industry treat their equipment as capital, so DLL provides competitive and flexible financing packages for these users and will continue to do so. However, DLL’s experts foresee a shift in how construction equipment is financed and how companies treat their equipment.

In the future, it is possible there will be less appetite for owning capital equipment with more customers moving towards operating leases, where monthly payments can be more achievable within budgets.

Thanks to its experience with the introduction of new technologies across other industries, DLL is uniquely positioned to offer customized, flexible financing solutions with fair market residual values at the end of the lease term.

Finance for more than just equipment
Though the electrification of construction sites is still in its early stages, DLL has experience in the transition to these technologies in other industries and can apply this expertise to businesses in the construction industry in the future. Adapting and learning with the market as it changes enables DLL to provide the right financing solutions, while helping businesses manage costs.

A tailored finance package from DLL can also extend beyond the equipment asset. DLL is open to supporting investment in any infrastructure required to support new technologies in construction. Funding for elements such as repair, maintenance, and insurance can be considered as part of a modular solution.

Partner with DLL for customized construction finance
DLL is ready to support future developments in the construction industry. Get in touch to discuss your construction equipment acquisition strategy and how DLL can help you invest in the growth of your business.