Excavator and digger finance from micro diggers to full-size 360s

How does excavator finance work?

Excavator finance spreads the cost of a digger, from a 1-tonne micro to a large tracked 360, over fixed payments, typically two to six years, while the machine works for you. Excavators tend to hold their value well, so lenders are often comfortable using the machine itself as the main security.

For a groundworker, the question is usually simple: is it cheaper to keep hiring a digger in, or to own one? Once a machine is on site most weeks, the monthly finance payment can compare well with ongoing hire charges, and at the end of a hire purchase agreement you own an asset with resale value. For plant hire firms, the sums are about utilisation: each machine needs to earn more on hire than it costs in repayments, servicing and transport.

Lenders look at the machine as much as the business. Well-known makes with strong second-hand demand are generally easier to fund, and a used excavator with full service history and sensible hours is often well received by lenders. Buckets, breakers, quick hitches and tiltrotators can usually be included in the same agreement when bought with the machine.

We are a broker, so we compare lenders across our panel rather than offering one bank's terms. If you are funding a mixed yard of plant, see our wider plant and machinery finance page, and for the construction sector as a whole, see our construction finance page.

Key features

What businesses use it for

• Mini diggers for landscapers and utility contractors
• Tracked 360s for groundworks and civils
• Wheeled excavators for road and urban work
• Expanding a plant hire fleet
• Swapping hired-in machines for owned kit
• Breakers, buckets and tiltrotator attachments

Owning on finance vs hiring in

Used and nearly new excavators

The used excavator market is busy, and many lenders on our panel will fund second-hand machines from dealers, auctions and private sellers. They will usually ask for the make, model, year, hours and serial number, and may want photographs, an inspection or a valuation on older or higher-value machines. Many lenders set a maximum age for the machine at the end of the agreement, which can limit the term on older kit. Our used equipment finance page explains what lenders look for in more detail.

Tax and lifting rules

GOV.UK lists excavators among the construction equipment that may qualify for full expensing, which is available to companies on new and unused plant. Sole traders and partnerships may be able to use the Annual Investment Allowance of £1 million, and second-hand machines can still qualify for AIA. Speak to your accountant to confirm what you can claim.

If an excavator is used for lifting, for example as a material handler fitted with forks, grabs or a lifting point, it falls under the Lifting Operations and Lifting Equipment Regulations. HSE guidance gives a maximum of 12 months between thorough examinations for such machines, and six months for detachable lifting accessories, unless a written examination scheme says otherwise. Build those costs into your sums.

What lenders typically look at

• Machine details: quote or invoice, make, model, year, hours and serial number
• Business bank statements, typically the last three to six months
• Latest filed accounts or tax returns, plus management accounts if available
• Evidence of work, contracts or hire demand for the machine
• Director or owner details for identity and credit checks
• A list of any existing finance agreements