So you need a skid steer but don't have $30,000 to $80,000 sitting around? You're not alone. Most contractors, farmers, and small business owners face the same challenge — the equipment they need costs more than they can pay upfront.
The good news? Financing a skid steer is easier than most people think. Whether you're a sole proprietor just starting out or a growing construction company, there are real options available to you right now.
In this guide, you'll learn exactly how to get a loan for a skid steer, what lenders look for, where to apply, and how to boost your chances of approval — even if your credit isn't perfect. Let's break it all down in plain English.
What Is a Skid Steer Loan?
Before diving in, it helps to understand what kind of financing we're actually talking about here.
A skid steer loan is a type of equipment financing — a loan specifically designed to help you purchase heavy machinery for business use. The skid steer itself typically acts as the collateral, which means lenders are more willing to approve these loans than they might be for unsecured personal loans.
You'll find two main options when financing a skid steer:
- Equipment loans — You own the machine outright once it's paid off. The equipment secures the loan.
- Equipment leases — You use the machine for a set period and may have the option to buy it at the end.
Both have their place depending on your cash flow, tax situation, and long-term needs. For most buyers who want to build equity in the equipment, a loan is the better route.
How to Get a Loan for a Skid Steer: 7 Proven Steps
Step 1: Know What You Can Afford
The first step is figuring out your budget before you fall in love with a machine that's out of reach.
Start with these questions:
- What's the purchase price of the skid steer you want?
- How much can you put down (usually 10–20%)?
- What monthly payment can your business cash flow comfortably handle?
A typical skid steer loan might look like this: a $50,000 machine with 10% down means financing $45,000. At a 7% interest rate over 60 months, your monthly payment would be roughly $891.
Use an online equipment loan calculator to test different scenarios before you approach a lender.
Step 2: Check Your Credit Score
Your credit score is one of the biggest factors in whether you get approved — and at what rate.
Here's a general breakdown:
- 720+ — Excellent. You'll qualify for the best rates and terms.
- 660–719 — Good. You'll get approved with competitive rates.
- 600–659 — Fair. Approval is possible, but rates will be higher.
- Below 600 — Challenging. You may need a co-signer, larger down payment, or a specialized lender.
If your score is lower than you'd like, don't panic. Pull your free report at AnnualCreditReport.com, dispute any errors, and pay down revolving balances if possible. Even a 20-point improvement can make a meaningful difference in your rate.
Also keep in mind: business credit matters too. If your business has been operating for a few years and has solid payment history with vendors, that can help your application even if your personal credit is just okay.
Step 3: Gather Your Financial Documents
Lenders want to see that your business can actually afford the loan payments. Being prepared with paperwork will speed up the process significantly.
Here's what most lenders will ask for:
- Last 2–3 years of business tax returns
- Recent bank statements (usually 3–6 months)
- Profit and loss statement
- Business license and formation documents
- Personal tax returns (especially for small businesses or sole proprietors)
- A quote or invoice for the skid steer you want to purchase
Some lenders — especially online equipment financing companies — have simplified this process with "stated income" options for loans under $150,000. You may only need bank statements and a credit check.
Step 4: Choose the Right Type of Lender
Not all lenders are created equal when it comes to equipment financing. Here are your main options:
Banks and Credit Unions
Traditional banks often offer the lowest interest rates for borrowers with strong credit and established business history. If you have a solid relationship with your bank and good financials, this is a great place to start.
Credit unions can be even more flexible — especially local ones familiar with agricultural or construction businesses in your area.
Best for: Established businesses with good credit and at least 2 years of history.
Online Equipment Lenders
Companies like Crest Capital, Balboa Capital, Currency, and Beacon Funding specialize in equipment financing and can often approve applications in 24–48 hours.
The tradeoff? Rates may be slightly higher than a traditional bank, but the speed and flexibility are often worth it — especially for newer businesses.
Best for: Business owners who need fast funding or don't meet traditional bank requirements.
Manufacturer and Dealer Financing
Brands like Bobcat, John Deere, Caterpillar, and Case offer their own financing programs — often with attractive promotional rates like 0% for 12 months or deferred payment options.
The catch is that these deals are usually reserved for buyers with strong credit. You'll also want to read the fine print on deferred interest offers, as the terms can get expensive if the balance isn't paid off in time.
Best for: Buyers with good credit who want a one-stop-shop experience.
SBA Loans
The Small Business Administration (SBA) offers loan programs — particularly the SBA 7(a) loan — that can be used for equipment purchases. These loans come with low rates and long repayment terms, but the application process is more detailed and takes longer (often 4–8 weeks).
Best for: Business owners willing to go through a longer process for the best possible terms.
Step 5: Compare Loan Offers
Don't accept the first offer you receive. Shopping around with multiple lenders takes a little more time but can save you thousands of dollars over the life of the loan.
When comparing offers, look at:
- Interest rate (APR) — The annual percentage rate includes fees, making it the most accurate cost comparison.
- Loan term — Longer terms mean lower monthly payments but more interest paid overall.
- Down payment requirements — Lower down payments preserve cash flow but increase the amount financed.
- Prepayment penalties — Some lenders charge a fee if you pay off the loan early.
- Origination fees — Upfront fees that can add to your total cost.
A loan with a slightly higher rate but no origination fee might actually cost less than a lower-rate loan with a 3% origination charge. Run the full math.
Step 6: Submit Your Application
Once you've chosen a lender, it's time to apply. Most lenders today have online applications that take 15–30 minutes to complete.
Here's what the process typically looks like:
- Fill out the application (business info, loan amount, purpose)
- Upload your financial documents
- Wait for a credit decision (anywhere from same-day to a few weeks, depending on the lender)
- Review and sign the loan agreement
- Funds are disbursed — often directly to the dealer or seller
For dealer financing, much of this happens right on the lot. For bank or online lender financing, you'll coordinate separately and may need to provide the dealer's invoice.
Step 7: Close the Deal and Take Ownership
Once your loan is approved and funded, you're ready to take ownership of your skid steer.
Keep the following in mind post-purchase:
- Set up automatic payments to avoid late fees that could hurt your credit
- Keep detailed records of the machine for tax purposes (Section 179 deductions can be significant)
- Make sure the skid steer is properly insured — lenders typically require this
- Review your loan statements regularly to ensure payments are applied correctly
Can You Get a Skid Steer Loan with Bad Credit?
Yes — but it takes some extra planning.
If your personal credit score is below 600, your options narrow but don't disappear. Here are realistic paths forward:
Offer a larger down payment. Putting 20–30% down reduces the lender's risk and often unlocks approvals that wouldn't otherwise happen.
Find a co-signer. A business partner, family member, or investor with strong credit can co-sign the loan, improving your approval odds significantly.
Work with specialized lenders. Some equipment finance companies specifically serve borrowers with challenged credit. Expect higher rates — often 15–25% APR — but these loans can help you get the equipment now while you rebuild your credit.
Look into lease-to-own options. Some dealers offer rent-to-own or lease-to-own arrangements with more flexible credit requirements than traditional financing.
Build business credit first. If your purchase isn't urgent, spending 6–12 months building business credit (through vendor accounts, secured business cards, and on-time payments) can dramatically improve your options.
How Much Does It Cost to Finance a Skid Steer?
The cost of financing depends on the loan amount, interest rate, and term length. Here are some real-world examples to give you a sense of what to expect:
| Machine Price | Down Payment | Amount Financed | Rate | Term | Monthly Payment |
|---|---|---|---|---|---|
| $35,000 | $3,500 | $31,500 | 6.5% | 48 months | ~$747 |
| $50,000 | $5,000 | $45,000 | 7.0% | 60 months | ~$891 |
| $70,000 | $10,000 | $60,000 | 8.5% | 72 months | ~$1,070 |
These are estimates. Your actual rate will depend on your creditworthiness, the lender, and current market rates.
Tax Benefits of Financing a Skid Steer
One often-overlooked advantage of buying rather than leasing: the tax benefits can be significant.
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment in the year it's placed in service — rather than depreciating it over several years. For 2024, the deduction limit is $1,160,000.
This means if you finance a $60,000 skid steer and use it for business, you may be able to deduct the full $60,000 from your taxable income in year one — potentially saving tens of thousands in taxes.
Bonus depreciation may also apply, allowing additional first-year write-offs.
Talk to your accountant before finalizing any purchase. The combination of equipment financing and tax deductions can make buying a skid steer far more affordable than the sticker price suggests.
New vs. Used Skid Steer: Which Is Easier to Finance?
Both new and used skid steers are financeable, but there are some differences to know.
New skid steers are generally easier to finance because lenders view them as lower risk. They're also more likely to qualify for manufacturer promotional financing deals.
Used skid steers can be financed through banks, online lenders, and credit unions. However, some lenders have restrictions — for example, they may not finance machines older than 10–15 years or with very high hours. Private-party purchases can also be trickier to finance than buying from a dealer.
If you're buying used, check with your lender beforehand about any age or condition restrictions.
Visual Content Guide
Suggested Images:
- Image 1: A skid steer on a construction site (ALT text: "skid steer loader on job site — how to get a loan for a skid steer")
- Image 2: A person reviewing loan documents at a desk (ALT text: "reviewing equipment loan application for skid steer financing")
- Image 3: Side-by-side chart comparing lender types (see below)
Suggested Infographic: A step-by-step graphic titled "How to Finance a Skid Steer in 7 Steps" — visualizing the process from budgeting to closing, with icons for each step.
Suggested Chart: A bar chart comparing average interest rates by lender type (banks, online lenders, dealer financing, SBA loans).
FAQ: How to Get a Loan for a Skid Steer
1. What credit score do I need to get a skid steer loan?
Most traditional lenders prefer a credit score of 660 or higher. However, specialized equipment lenders may approve borrowers with scores as low as 575–600 — often with a larger down payment or higher interest rate. Strong business financials can sometimes offset a lower personal credit score.
2. How long does it take to get approved for a skid steer loan?
It depends on the lender. Online equipment lenders can approve and fund loans in as little as 24–48 hours. Traditional banks may take 1–3 weeks. SBA loans can take 4–8 weeks due to more detailed underwriting requirements.
3. Can I get a skid steer loan as a startup or new business?
Yes, but it's harder. Startups with less than 2 years of history may need to rely more heavily on personal credit, a larger down payment, or financing through the dealer. Some lenders specifically serve newer businesses — look for "startup equipment financing" options.
4. Is it better to finance a skid steer or lease it?
It depends on your situation. If you want to own the equipment and build equity, financing is the better choice. If you prefer lower monthly payments, want to upgrade frequently, or need the machine only for a specific project period, leasing might make more sense. Buying also gives you access to tax deductions like Section 179.
5. Can I use an SBA loan to buy a skid steer?
Yes. The SBA 7(a) loan program can be used to purchase equipment, including skid steers. These loans offer favorable rates and terms but require a more detailed application and longer processing time. You'll apply through an SBA-approved lender, not directly through the SBA.
Conclusion
Getting a loan for a skid steer doesn't have to be stressful. Once you understand the process, it comes down to a few key moves: know your budget, check your credit, gather your documents, and compare lenders before you commit.
The right financing can make a powerful piece of equipment accessible now — rather than waiting years to save up the full purchase price. And with tax benefits like Section 179, your net cost might be lower than you expect.
Start by getting pre-qualified with two or three lenders. It doesn't hurt your credit to shop around, and you'll quickly see what you qualify for. From there, it's just a matter of picking the best deal and getting your skid steer to work.
If you found this guide helpful, consider sharing it with a fellow contractor or small business owner who's looking for the same answers.
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