Frac Tanks Financing

Where the financed amount comes from on frac tanks

The funding statement on a frac tanks deal looks different from the dealer quote. The dealer quote highlights the equipment and configuration. The funding statement breaks out every dollar the lender is financing, in the order the lender lists them. Reading both side by side at signing is the discipline that prevents post-funding surprise.

Base equipment. The unit itself, in the configuration the seller is offering. For frac tanks, base pricing typically runs $22K to $31K depending on configuration, year, hours, and condition.

Attachments, options, and add-ons. Buyer-selected items show up on the invoice as separate lines. These are financeable in nearly every case. The decision is whether to roll them into the loan principal or pay them out of pocket at delivery.

Delivery, setup, and training. For equipment that ships from a distant dealer to a remote job site, delivery and rigging can add 2 to 5 percent of base price. On frac tanks specifically, mobilization to the work site after delivery is the buyer responsibility unless negotiated otherwise.

Sales tax and use tax. Sales or use tax is owed in most states and typically rolls into the financed amount; the lender remits it at closing. State conformity rules vary, and a few states offer manufacturing or production exemptions that change the math. Confirm the tax line with the seller before signing rather than discovering it at funding.

Extended warranty, service contract, and consumables. Optional but common. Pricing typically runs $1,000 to $10,000 depending on equipment cost and coverage. Financeable. Decide whether to roll the warranty in before you sign the funding documents, not after.

Who actually finances frac tanks

Our partner lenders see a wide range of buyer profiles on frac tanks applications. The four below are the ones we route most often. Pricing, term, and down payment differ across them, but each profile has a viable path to financing if the application is structured correctly.

Inside the underwriter view of a frac tanks deal

If you want to understand why two frac tanks deals at identical price land at different rates, the answer is in the five borrower factors below. Lender pricing on the equipment side is reasonably standardized. Lender pricing on the borrower side has real spread.

• Existing debt service. Lenders look at total monthly debt obligations against cash flow. Adding a new payment that pushes the debt service coverage ratio below 1.20 typically requires additional support or a larger down payment.
• Geographic operating territory. Where the equipment will operate matters. Some lenders prefer single-state operation; others price interstate or cross-border use differently. The lender match changes if the equipment will operate outside the home state regularly.
• Documented backlog or pipeline. Signed contracts, outstanding purchase orders, or a documented work backlog support the application story. For service businesses in particular, a pipeline that justifies the new equipment closes deals faster than projections alone.
• Bank statement analysis. Three to twelve months of business bank statements. Lenders look at average daily balance, monthly deposit count, NSF activity, and overall cash flow stability. This is where seasonal businesses get fairly priced if they have the records.
• Time in business. The single most weighted factor for most equipment lenders. Two years in business opens up the full program menu. Under one year narrows the lender pool and often requires larger down payment.

Diligence on frac tanks: the items that matter

Equipment financing on frac tanks closes cleanly when the pre-purchase walk catches the items below. When it does not, the issues surface post-funding, and the lender owns nothing of the resolution. Read the seller representation against the items below before signing.

• Service history complete. Maintenance records back to first owner where possible. Gaps in service history reduce both lender comfort and resale value.
• Hours-meter or odometer history. Beyond the current reading, confirm the historical pattern of use. A unit with 4,000 hours from regular daily use is different from a unit with 4,000 hours from intermittent project work. Service records, when available, document the use pattern.
• Hydraulics and ancillary systems. Full range of motion on every hydraulic function, no leaks, smooth operation, no chatter or pump whine. Hydraulic repairs on heavy equipment run into five figures fast.
• Inspection by independent third party. For used equipment over $50,000, an independent mechanical inspection runs $300 to $800 and surfaces issues a walk-around will not catch. Lenders often require this for used equipment above a threshold.
• Wear items documented. Tires, tracks, undercarriage, cutting edges, brakes. Photograph and note remaining life. These are the items that will need replacement first and that buyers under-budget for.
• Operator manuals and documentation. Get the operator manual, service manual, and any parts catalog at the time of purchase. Replacements are sometimes available from the manufacturer but slow and expensive. Documentation is part of the asset value.

Where frac tanks deals go sideways post-funding

Every one of the issues below is documented on the funding paperwork. The buyer signed off on each. The buyer surprise comes from the gap between what the dealer said in conversation and what the documents actually say. Read the documents at signing rather than after.