How Equipment Dealers Can Offer Financing to Their Customers

Every equipment dealer has lost deals because a buyer wanted the equipment, was ready to buy, but could not come up with the cash. The buyer walks — maybe to a competitor who offers financing, maybe just away. A dealer finance program eliminates that scenario. Instead of telling your customer to go figure out financing on their own, you have a solution ready at the moment they are most motivated to buy.

How Dealer Finance Programs Work

A dealer or vendor finance program is an arrangement between an equipment seller and an equipment finance company (or broker). When a customer is ready to buy and wants financing, the dealer submits the customer's information to the finance partner, who runs credit, structures the deal, and funds the vendor directly when the transaction closes. The customer gets their equipment; the dealer gets paid in full at funding.

The dealer does not lend money, does not carry the paper, and does not take credit risk. The finance company does. The dealer's role is to introduce the transaction and facilitate the application — the rest is handled by the lender or broker.

What a Dealer Finance Program Does for Your Business

It closes deals that would otherwise walk

The most immediate benefit. Buyers who want equipment but do not have liquid capital are extremely common in the contractor and small business world. Offering financing converts those would-be lost sales into closed transactions. Studies in the equipment industry consistently show that dealers with financing programs close 20–40% more deals than comparable dealers without them.

It increases average transaction size

Buyers paying cash have a hard budget ceiling. Buyers with financing think in monthly payments. A contractor who has $40,000 in available cash might limit themselves to a $40,000 machine — but the same contractor might finance a $95,000 machine without hesitation if the payment is $2,200/month and the machine generates $8,000/month in billable work. Financing expands the universe of what your customers will buy from you.

It differentiates you from competitors

Most smaller dealers and independent sellers do not have a financing program. If your competitor does not offer financing and you do, you win deals by default from buyers who are motivated but need structure. It is a genuine competitive advantage that requires minimal operational investment.

What the Process Looks Like

1. Customer identifies equipment they want to buy from you.
2. You introduce the financing option and either hand them an application link or collect basic information on their behalf.
3. Application is submitted to the finance partner.
4. Credit decision comes back, typically within 24 hours, with approval amount and term options.
5. Customer accepts the terms. Documents are sent electronically.
6. Lender funds the dealer directly. You receive the purchase price minus any applicable dealer participation or funding fees.
7. Customer takes delivery. The lender holds the lien on the equipment; the customer makes payments directly to the lender.

What About Dealer Participation?

Many finance companies offer dealers a participation in the financing — a small percentage of the financed amount paid to the dealer at closing as compensation for originating the transaction. This is common in the auto finance world and exists in equipment finance as well. It functions as a small additional revenue stream on transactions you would have completed anyway.

Participation rates and structures vary by lender and deal type. Some lenders allow dealers to mark up the interest rate within prescribed limits (similar to F&I in auto), while others pay a flat referral fee. This is worth discussing when you establish a lender relationship.

Setting Up a Program with LAT Capital Group

LAT Capital Group works with equipment dealers and vendors to establish preferred financing relationships. There is no cost to set up the program. We handle the credit underwriting, documentation, and funding. You provide the application referral and the equipment.

Dealers who work with us consistently have access to:

• A broad lender network covering A through D credit tiers
• New and used equipment financing across all asset classes
• Responses within 24 hours on most transactions
• A single point of contact rather than managing multiple lender relationships