Construction Equipment Finance Market Size - By Financing Type (Loans, Leases, Mortgage), By Equipment (Earthmoving & Road Building Equipment, Material Handling & Cranes, Concrete Equipment), By End User & Forecast, 2024 - 2032

Construction Equipment Finance Market Size

Construction Equipment Finance Market size was valued at USD 91.5 billion in 2023 and is anticipated to grow at a CAGR of 6.5% between 2024 and 2032. The rising government and private funding for building & upgrading infrastructure including roads, bridges, airports and utilities to support the economic growth is expected to drive the growth of the market.
 

According to India Brand Equity Foundation (IBEF), under interim budget 2024-25, the capital investment for infrastructure increased by 11.1% from annual year 2023-24 to reach around USD 130 billion, which is nearly 3.4% of the country’s GDP. This surge in infrastructure projects and investment is driving the demand for this equipment and contributes to the growth of the construction equipment finance market.
 

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 upfront costs. Also, flexible financing options in the market drive the growth by making diverse & customizable financial solutions available. These options include hire purchase arrangements, equipment loans, and deferred payment plans. By providing flexibility, 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.
 

Equipment maintenance & repair is a significant concern in the construction equipment finance market. Inadequate maintenance by borrowers can lead to equipment breakdowns, reduced operational efficiency, and decreased resale value. Lenders face the risk of financing poorly maintained or damaged equipment, 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.
 

Construction Equipment Finance Market Trends

The construction equipment finance industry is increasingly moving towards digitalization. This trend is seen in the growing use of online applications, digital documents, and automated underwriting. These digital tools make the financing process smoother and improve customer experiences and help lenders make faster and better decisions. Additionally, there is a rising focus on sustainable finance in the construction equipment sector. Lenders are offering financial solutions for eco-friendly and energy-efficient equipment. This approach is in line with the construction industry's growing commitment to environmental responsibility and supports the use of greener technologies and practices in construction projects.
 

Construction equipment manufacturers are forming strategic partnerships with financial institutions such as banks to provide financing solutions for construction equipment businesses. For instance, in June 2024, Action Construction Equipment Ltd. (ACE), a construction equipment manufacturer, entered a MoU with Bank of Baroda to provide financing solutions for businesses in the construction equipment sector. Under this partnership, ACE customers across the country got access to financing options offered by Bank of Baroda. This agreement supports construction equipment businesses, entrepreneurs and startups in the country.  
 

Construction Equipment Finance Market Analysis

Based on financing type, the market is divided into loans, leases and mortgage. The loans segment accounted for around 62% of the market share in 2023 and is expected to reach USD 85 billion by 2032. The loan segment is growing as businesses prefer to own equipment outright, allowing them to build equity over time. Low-interest rates and attractive financing terms make loans appealing to borrowers. The increasing demand for construction equipment, driven by infrastructure projects and rising construction activities, further boosts the need for financing options. Additionally, favorable government policies and incentives support the expansion of the loan segment in the market.
 

Based on equipment, the construction equipment finance market is categorized into earthmoving & road building equipment, material handling & cranes, and concrete equipment. The earthmoving & road building equipment segment held around 55% share in 2023. The segment is set to grow due to global urbanization and infrastructure projects, which are increasing the demand for earthmoving and road building machinery.
 

Technological advancements, such as better fuel efficiency and telematics integration, are attracting businesses to invest in newer, more efficient equipment. Additionally, flexible and customized financing options are enabling construction companies to upgrade their fleets without large upfront costs. These factors together are contributing to the growth and development of the earthmoving & road building equipment sector.
 

Asia Pacific led the global construction equipment finance market with a share of over 41% in 2023. The market in the region is growing rapidly owing to the growing urbanization, infrastructure projects, and industrial expansion. Flexible financing options and supportive government policies are encouraging businesses to invest in advanced machinery. As the construction sector expands, Asia Pacific offers significant opportunities for finance providers to meet the rising needs of businesses.
 

In the U.S., the construction sector is quickly adopting advanced technologies including telematics, GPS, automation, and electric machinery. These innovations enhance efficiency, safety, and environmental performance but also increase equipment costs. This has increased the demand for financing options among companies looking to integrate these technologies without affecting their cash flow.
 

The Chinese government offers various subsidies and incentives to promote the adoption of advanced construction equipment, including environmentally friendly machinery in the country. These incentives reduce the cost of equipment but often require initial capital, which can be supported through flexible financing solutions including loans and leases. 
 

Countries in the MEA, such as Saudi Arabia, the UAE, and Qatar, are investing heavily in infrastructure to reduce their dependence on oil industry. Projects like Saudi Arabia's Vision 2030, which includes building NEOM city, and the UAE's development of smart cities are driving significant demand for construction equipment. This has increased demand for financing solutions among construction companies to acquire the necessary equipment for these large projects.
 

Construction Equipment Finance Market Share

Caterpillar Inc. and Deere & Company hold a market share of around 4% in 2023 in the construction equipment finance industry. Caterpillar Inc. focuses on offering integrated financing solutions to cater to the diverse needs of their customers, which helps the company to enhance its value proposition and in establishing long-term relationships with customers.
 

Deere & Company has improved its customer financing by investing heavily in digital platforms. These platforms allow customers to explore financing options, apply for credit, and manage their accounts online. These digital tools enhance customer satisfaction and accelerate the approval process, making it easier for customers to finance their equipment purchases.
 

Construction Equipment Finance Market Companies

Major players operating in the construction equipment finance industry are:

• AB Volvo
• Bank of America
• Caterpillar Inc.
• CNH Industrial
• Deere & Company
• GE Capital
• John Deere
• JP Morgan Chase
• Komatsu
• Well Fargo
   

Construction Equipment Finance Industry News

• In February 2024, Mahindra’s Construction Equipment Division (MEC) partnered with Bank of Maharashtra to offer specialized financing solutions for its range of construction equipment. This effort helps to offer customers tailored financial assistance for the purchase of the company’s construction equipment.
   
• 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.
   

The construction equipment finance market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD million) from 2021 to 2032 for the following segments:

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Market, By Financing Type

• Loans
• Leases
• Mortgage

Market, By Equipment

• Earthmoving & roadbuilding equipment
  • Backhoe
  • Excavator
  • Loader
  • Compaction equipment
  • Others
• Material handling and cranes
  • Storage and handling equipment
  • Engineered systems
  • Industrial trucks
  • Bulk material handling equipment
• Concrete equipment
  • Concrete pumps
  • Crusher
  • Transit mixers
  • Asphalt pavers
  • Batching plants

Market, By Industry Vertical

• Construction
• Mining
• Government & public
• Rental
• Others

The above information is provided for the following regions and countries:

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