# Oil and Gas Equipment Financing Fundamentals

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Last modified: 2026-05-29T19:39:17+00:00
Type: efin_guide

## Summary

Oil and Gas Equipment Financing Fundamentals. Comprehensive guide.

## Content

Oil and gas equipment financing covers drilling rigs, pumping equipment, completion services, and supporting equipment used by oilfield service companies, drilling contractors, and energy operators.

Equipment categories and typical financing

EquipmentTypical priceUseful life
Drilling rig (smaller)$1M-$10M+15-25 years
Workover rig$500K-$3M15-20 years
Pumping equipment (frac, cementing)$1M-$5M per spread10-15 years
Wireline equipment$300K-$1.5M10-15 years
Coiled tubing unit$1M-$5M10-15 years
Service trucks (oilfield)$200K-$800K10-12 years
Tank trucks / water haulers$150K-$400K10-15 years


Industry-specific considerations

Commodity price volatility. Oil and gas pricing affects activity levels dramatically. Lenders typically prefer service operators with long-term contracts over spot-market operators.
Industry cyclicality. Boom-bust cycles affect equipment values and lender appetite.
Regulatory and environmental compliance. EPA, OSHA, state and federal regulations add operating cost.
Geographic concentration. Most oilfield equipment financing centers on specific basins (Permian, Eagle Ford, Bakken, Marcellus).

Typical financing terms


Rate range: 10% to 18% APR depending on credit tier and equipment age
Term: 36 to 60 months
Down payment: 0% to 25% depending on credit and equipment
SBA eligibility: Yes; SBA 7(a) and 504 programs are well-suited


Lender pool


Energy-specialty lenders: Mercantile Capital, Trinity Capital, energy private credit funds
Bank energy lending divisions
Equipment finance with oilfield experience
Limited SBA availability due to industry risk


What can go wrong


Industry-specific regulatory changes (emissions, licensing, safety) affecting equipment value
Customer or contract concentration affecting cash flow
Equipment age limits in lender underwriting boxes
Seasonal revenue mismatched with monthly payments
Inadequate maintenance reserves leading to deferred-service buildup


Action steps


Identify specific equipment with model and configuration
Get quotes from at least one dealer and any captive financer
Pull last 6 months of bank statements and 2 years of tax returns
Run payment scenarios at different down payments
Consider soft-pull prequalification before committing to a specific lender
Apply with oil and gas equipment specifics in the notes


See also our insurance requirements guide and Section 179 strategy for tax planning.