Used construction equipment financing in Jerome, ID works much like financing a new machine: a funding partner may pay the seller, and the crew pays the amount back on a fixed schedule while the machine works. On a used unit, the partner may also ask about its age and condition and may set a shorter term. Below, a finishing contractor sets an auction bid from the payment it can carry, and a framing crew counts rental months against a used material lift.
An invented drywall finisher works back from a $585 monthly payment to a $19,900 bid ceiling on a used texture sprayer rig. An invented framing crew finds that 24 payments on a used material lift cost less than renting once it needs a lift six or more months a year.
From a Monthly Payment Back to a Bid Ceiling on a Used Texture Sprayer Rig
Building finishing contractors (NAICS 2383) in Jerome County, ID reported $5,778,000 in annual payroll for 2023, according to County Business Patterns. Drywall, paint and flooring crews sit in that group.
In an invented case, a drywall finisher wants a used texture sprayer rig coming up at an equipment auction. Payment after an auction falls due on the auction house's schedule, so the invented owner settles the financing question before bidding day and works backward from the payment:
- Monthly payment the business can carry beside what it already owes: $585 (invented)
- Rate and term in this invented case: a 13.24% annual rate over 36 months
- Largest amount those invented payments pay off: $17,302.74
- Cash the owner adds from the bank account: $2,650 (invented)
- Bid ceiling, rounded down to the nearest $100: $19,900 (invented)
If the invented bid wins at the ceiling, $17,250 is financed and the payment works out to $583.22 a month, just inside the limit, with $20,995.92 paid over the 36 invented months. Hauling the rig back to the shop comes out of cash in this invented case, so it stays outside the ceiling.
The term moves the ceiling more than the rate does. If the partner in this invented case offered 24 months instead of 36, the same $585 would pay off only $12,275.82, and the bid ceiling would fall to $14,900, $5,000 lower. That is why the invented owner asks for the term, not only the rate, before the auction starts.
Rent or Own: How Many Months a Year Make a Used Material Lift Worth Its Payments
Framing contractors with a ZIP 83338 address numbered 5 in 2023 (ZIP Code Business Patterns, NAICS 238130).
An invented framing crew rents a material lift to set headers and beams at $870 a month. A used lift is offered to the crew at $8,740, and at a 14.12% annual rate over 24 months the invented loan runs $420.13 a month, $10,083.12 across all 24 payments.
| Months of rental each year | Rent over two years | 24 loan payments | Difference |
|---|---|---|---|
| 3 | $5,220 | $10,083.12 | $4,863.12 more for the loan |
| 4 | $6,960 | $10,083.12 | $3,123.12 more for the loan |
| 5 | $8,700 | $10,083.12 | $1,383.12 more for the loan |
| 6 | $10,440 | $10,083.12 | $356.88 more for renting |
| 7 | $12,180 | $10,083.12 | $2,096.88 more for renting |
In this invented case the break-even sits at 5.79 rental months a year. A crew that needs the lift five months a year or fewer spends less renting it over the two invented years; from six months up, the loan costs less, and the crew owns the lift after the 24th payment.
The invented crew counts its own months from last year's rental invoices: four months, $3,480 in rent. With more framing booked for the coming year, the owner expects six or seven, which is where the invented table turns in favor of the loan. The payment still falls due in the months the lift sits in the yard.
Costs Around a Used Machine That Stay Off the Equipment Loan
A used purchase brings costs that a machine loan may not cover:
- Hoses, a pump rebuild or other repairs the rig needs before its first job: a short working capital amount
- Joint compound, tape and corner bead for the jobs the rig starts on: a line of credit draw paid back when those jobs pay
- Hauling and any auction fee: cash, in the invented cases above
Payments on other prices and terms can be run in the calculator on the equipment financing page. More contractor cases, from a pipe fusion machine to a loader repair, are on the construction page.
By Cobblegrove Business Funding · Updated
