Yes. Freight, delivery, rigging, installation, and certain related costs may be included in equipment financing. Whether they can be financed depends on the lender, the equipment, the transaction structure, and the supporting documentation.
It is worth raising these costs before the equipment is ordered. Financing based only on the equipment quote can leave an owner covering part of the project in cash or require changes to the financing structure after the purchase is underway.
How the 20% guideline fits
Freight, shipping, rigging, and installation can often be included, but financing sources may set limits on these costs. For smaller equipment transactions, generally under $500,000, many sources use a guideline of approximately 20% of the equipment cost for installation. Some also count freight and shipping toward that same cap.
That 20% figure is a common guideline we encounter, not an industry-wide rule or a guarantee. Lender policies vary, including which costs count toward a limit and how the limit is calculated.
For larger, well-qualified transactions, it may be possible to explore exceptions that allow a higher percentage. Whether that is an option depends on the lender, the borrower’s qualifications, the equipment, and the overall structure. An exception is not assured, so it is best to share the complete project costs early.
Hypothetical example
Suppose a business receives a $90,000 quote for a piece of equipment. Freight, rigging, and installation add another $15,000 to $25,000, bringing the installed cost to $105,000 to $115,000. At $25,000, those related costs are about 28% of the equipment price.
Whether those costs exceed a lender's limit depends on which expenses are subject to the cap and how that cap is calculated. Some lenders apply the limit primarily to installation, while others include freight, shipping, and related costs in the same allowance. The owner should understand the full installed cost before structuring the financing and plan for any costs that may not be eligible for inclusion. This is a hypothetical example, not a financing offer or a description of an actual transaction.
What to prepare
Gather the equipment quote, freight or delivery quote, rigging and installation estimate, any site work or connection costs, and the intended in-service date. Itemized quotes help clarify which costs relate directly to acquiring and installing the equipment. Site work and connection costs may be treated differently from equipment-related freight or rigging, so identify them separately.
Simplified Capital works with financing sources to evaluate equipment acquisitions, including associated costs where they may be included. We are a commercial financing and structuring resource, not a direct lender. Each financing source underwrites the request and makes its own credit decision.
If you are planning an equipment purchase and want to understand how freight, rigging, and installation costs may fit into the financing, contact Simplified Capital at (866) 810-1305, info@simplifiedcapital.com, or https://www.simplifiedcapital.com.
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