Construction Equipment Finance Market Size - By Financing Type (Loans, Mortgage), By Equipment (Earthmoving, Material Handling, Concrete & Road Construction, Transportation), By Application (Enterprise, Municipal, Personal) & Global Forecast 2023 - 2032

Construction Equipment Finance Market Size - By Financing Type (Loans, Mortgage), By Equipment (Earthmoving, Material Handling, Concrete & Road Construction, Transportation), By Application (Enterprise, Municipal, Personal) & Global Forecast 2023 - 2032

Construction Equipment Finance Market Size

Construction Equipment Finance Market size valued at USD 80.4 billion in 2022 and is anticipated to observe more than 7.1% CAGR between 2023 and 2032. The increasing emphasis on building & upgrading critical physical assets, such as roads, bridges, airports, and utilities, to support economic growth and societal needs is complementing the market growth. As governments and private entities invest in large-scale infrastructure projects, there is a growing demand for construction equipment to carry out the development efficiently. Construction equipment finance plays a vital role in enabling businesses to acquire the necessary machinery & tools, allowing them to participate in such projects without facing the burden of significant upfront costs.

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Flexible financing options in the market drive business growth by making diverse & customizable financial solutions available. These options include hire purchase arrangements, equipment loans, and deferred payment plans. By providing flexibility in payment structures, interest rates, and down payment requirements, businesses can choose financing options that best align with their cash flow and budget constraints. This makes it easier for them to acquire construction equipment without straining their financial resources.

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Equipment maintenance & repair is a significant concern in the construction equipment finance market. Inadequate maintenance practices by borrowers can lead to equipment breakdowns, reduced operational efficiency, and decreased resale value. Lenders face the risk of financing equipment that is poorly maintained or damaged, affecting their ability to recover the investments in case of default. To mitigate this concern, lenders should implement stringent monitoring & inspection processes to ensure borrowers adhere to proper maintenance protocols, safeguarding the equipment value and minimizing potential losses.

COVID-19 Impact

The COVID-19 pandemic posed a challenge for the construction equipment finance market as it disrupted construction projects and led to economic uncertainties. With project delays and cash flow issues, businesses faced difficulties in making equipment finance payments, increasing the risks of default. Lenders encountered heightened credit risks and decreased demand for construction equipment financing due to market uncertainties. The pandemic highlighted the importance of risk management and flexibility in adapting to the changing market conditions.

There is a growing trend toward digitalization in the construction equipment finance market with the adoption of online application processes, digital documentation, and automated underwriting. This streamlines the financing process, enhances customer experience, and enables lenders to make quicker & more informed decisions. Also, there is a growing emphasis on sustainable finance in the construction equipment market, with lenders offering financing solutions for eco-friendly & energy-efficient equipment. This trend aligns with the construction industry's increasing focus on environmental responsibility and supports the adoption of greener technologies & practices in construction projects.

Construction Equipment Finance Market Analysis

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Based on financing type, the construction equipment finance market is divided into loans and mortgage. The loans segment accounted for around 72% of the market share in 2022. The loan segment is growing as loans offer businesses the flexibility to own the equipment outright, allowing them to build equity over time. Low-interest rates and attractive financing terms encourage borrowers to opt for loans. The growing demand for construction equipment due to infrastructure development projects and increasing construction activities further boosts the demand for financing options. Favorable government policies & incentives for equipment financing contribute to the expansion of the loan segment in the market.

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Based on equipment, the construction equipment finance market is categorized into earthmoving, material handling, concrete & road construction, and transportation. The earthmoving equipment segment held around 62% of the market share in 2022. The earthmoving equipment segment is expected to grow due to several factors including growing urbanization and infrastructure development projects globally that are creating a higher demand for earthmoving machinery. Technological advancements, such as improved fuel efficiency and telematics integration, are garnering the interest of businesses to invest in newer & more efficient equipment. Additionally, the availability of flexible & customized financing options is encouraging construction companies to upgrade their fleet without significant upfront costs.

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Asia Pacific led the global construction equipment finance market with a share of over 43% in 2022. Rapid urbanization, infrastructure development initiatives, and growing industrialization are increasing the demand for construction equipment in the region. The availability of flexible financing options and supportive government policies are encouraging businesses to invest in modern & advanced machinery. As the construction sector continues to expand, Asia Pacific presents vast opportunities for construction equipment finance providers to cater to the growing needs of businesses.

Construction Equipment Finance Market Share

Major players operating in the construction equipment finance market are

• CNH Industrial
• Caterpillar Inc.
• JP Morgan Chase
• Deere & Company
• Komatsu
• Well Fargo
• Volvo AB.

These companies focus on offering efficient financing options to customers. Financial institutions emphasize forming strategic partnerships with construction equipment manufacturers to offer best financing options to buyers.

Construction Equipment Finance Industry News

• In March 2023, Gibraltar Business Capital (GBC) announced its new equipment financing business, Gibraltar Equipment Finance (GEF). GEF offers term financing options that complement its asset-based lending products.

This market research report on construction equipment finance includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032 for the following segments

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By Financing Type

• Loans
• Mortgage

By Equipment

• Earthmoving
• Material Handling
• Concrete & Road Construction
• Transportation

By Application

• Enterprise
• Municipal
• Personal

The above information is provided for the following regions and countries

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ 
• Latin America
  • Brazil
  • Mexico
• MEA
  • South Africa
  • UAE
  • Saudi Arabia

Frequently Asked Questions (FAQ)

How big is the construction equipment finance market?

The market of construction equipment finance reached USD 80.4 billion in 2022 and will witness over 7.1% CAGR from 2023 to 2032.

How will loans segment bolster the demand for construction equipment finance?

The loans segment of construction equipment finance market captured around 72% of the revenue share in 2022 due to the growing demand for construction equipment along with infrastructure development projects and increasing construction activities.

Why is the demand for construction equipment finance rising in Asia Pacific market?

Asia Pacific held approximately 43% of the construction equipment finance market share in 2022 owing to the rapid urbanization, infrastructure development initiatives, and growing industrialization.

Which are the leading construction equipment finance companies?

CNH Industrial, Caterpillar Inc., JP Morgan Chase, Deere & Company, Komatsu, Well Fargo, and Volvo AB.