A forklift moves the pallet. Everything else in the building moves the pallet to the forklift or away from it. Rack systems determine aisle count and building efficiency. Conveyors and sorters determine throughput at the pick and pack stations. Dock levelers and restraint systems determine how fast the truck gets loaded and gone. Stretch wrap equipment, labelers, and conveyors close the carton and get it to the dock. None of those assets move themselves into the capital budget unless someone finances them as capital equipment, which most operations do not do systematically.
We finance material handling equipment as a category, not just the lift trucks. Racking, conveyors, dock equipment, automated storage and retrieval systems, automated guided vehicles, stretch wrap equipment, and the forklifts that tie all of it together. From $50,000, as one deal or as separate facilities for different project components. B and C credit considered. We underwrite the operation.
What Falls Under Material Handling Equipment
Material handling is a broad category, and the capital requirements across it are enormous. A modern 300,000 square foot distribution center might represent $5 million to $15 million in material handling infrastructure beyond the building itself. Here is how we categorize the major asset classes:
- Storage systems:selective pallet rack, drive-in rack, push-back rack, pallet flow rack, and high-density mobile rack. New rack for a 100,000 square foot building runs $500,000 to $2 million depending on height and configuration.
- Lift trucks and powered industrial trucks:sit-down forklifts,reach trucks, order pickers, pallet jacks, and turret trucks.
- Conveyors and sortation:belt conveyors, roller conveyors, live skate lines, tilt-tray sorters, and cross-belt sorters. A modest put-to-light sortation system runs $200,000 to $500,000; a high-speed shipping sorter is a $1 million-plus project.
- Automated systems:automated storage and retrieval systems (AS/RS), vertical lift modules (VLMs), horizontal carousels, andautomated guided forkliftsfor internal transport.
- Dock equipment:levelers, vehicle restraints, dock seals and shelters, high-speed dock doors.
- End-of-line equipment:stretch wrappers, banders, case sealers, label applicators.
Any of these, individually or as a combined project, can be financed as capital equipment.
Why Material Handling Projects Need a Dedicated Capital Strategy
The problem most DCs run into is that material handling projects get funded from too many buckets. The rack goes on the equipment loan. The conveyors go on the line of credit. The dock levelers are expensed as facility maintenance. The forklifts are leased through the dealer. The result is four different lenders, four different payment structures, four different maturity dates, and nobody who understands the whole project.
A consolidated capital approach funds the whole DC project from one or two facilities that cover all the asset classes. One approval. One relationship. Payment structures that are aligned to the project's go-live date so you are not making payments on rack before the conveyors are installed and the building is operational.
Operations inwarehousing and distributionande-commerce fulfillmentare where this matters most, because the scale of material handling investment is largest and the interdependency between asset classes is highest. You cannot run the sorter without the conveyors. You cannot run the conveyors without the dock equipment receiving the inbound. You cannot run the dock without the forklifts. It is one system, and it should be financed like one system.
How Material Handling Project Financing Works
Material handling project financing typically uses a master facility with draw schedules that correspond to vendor delivery and installation milestones. For a DC buildout with four or five major system vendors, each vendor's equipment generates a draw when it is delivered and accepted. You are not paying for rack before it is installed, and you are not waiting for every vendor to finish before you start the facility.
The underwriting process for large material handling projects requires more documentation than a single forklift purchase. Typical package includes:
- Business financials for the past two years (tax returns or CPA-prepared statements)
- Total project budget broken out by asset type and vendor
- Lease or ownership documentation for the building if lenders are financing leasehold improvements
- Letters of intent or purchase agreements from major equipment vendors
For smaller projects under $400,000 covering just one or two asset classes (forklifts plus dock equipment, for example), application-only financing is available. Recent operating statements and an application get you to credit decision in one to two business days.
Structures we use on material handling projects includeequipment loanswith fixed monthly payments and a buyout at term, operating leases for technology-intensive assets like sorters and VLMs where you want end-of-term flexibility, andsale-leasebackon assets already in place to recycle capital into the next phase of investment.
What to Finance Alongside Material Handling
The lift truck fleet and the material handling infrastructure go together. An operation expanding its conveyor capacity without upgrading the forklift fleet that feeds it is creating a new bottleneck at the dock interface. And a fleet refresh without addressing dock and rack limitations means the trucks are working harder against the same throughput ceiling.
Operations running full DC projects should look atforklift fleet financingalongside the broader material handling capital plan. If the DC is adding electric trucks as part of the project,forklift battery and charger financingfor the charging infrastructure belongs in the same capital facility.
For industries with specialized material handling needs, including paper and packaging operations running roll clamps and specialized conveyors,paper and packagingindustry-specific structures may apply. Steel service centers running coil cars, C-hooks, and specialized floor equipment are another area where industry-specific underwriting makes a difference.
Common Questions
Fund the Whole Building, Not Just the Trucks
Send us the project scope: the asset types, the approximate budget by category, and the go-live timeline. We will build a capital structure that covers the full project with a single approval and draw schedules that match your vendor delivery sequence. $50,000 floor, B and C credit evaluated on the operation. One facility for the whole DC.