Construction Equipment Finance Market Size

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.