The equity requirement is where most tribal equipment applications end, and usually for the wrong reason. Operations conclude they cannot raise 20 percent in cash and stop, without discovering that the figure differs between programs, that equipment they already own frequently counts, and that an established business faces a lower bar than a startup. This page sets out what each program actually requires, what qualifies as equity, and how operations with assets but little cash clear the threshold. Verified 8 October 2026.
Get Free Quotes 👑The BIA Indian Loan Guarantee and Insurance Program requires the borrower to have at least 20 percent equity in the project. The USDA Business and Industry program requires a minimum of 10 percent tangible balance sheet equity at loan closing for an existing business, equivalent to a maximum debt to tangible net worth ratio of 9 to 1, rising to 20 percent for a new business. Energy projects under B&I run between 25 and 40 percent depending on business history and credit rating. If you are an established operation with a trading record, that 10 percent figure is the most important number on this page, because it halves the bar that stops most applicants.
A used forklift averaging around 21,000 dollars needs roughly 4,200 dollars at 20 percent, or 2,100 at 10 percent. A rough terrain machine suited to a log yard at 70,000 dollars needs 14,000 or 7,000 respectively. A larger capacity machine at 120,000 needs 24,000 or 12,000. These are not abstract percentages once you attach them to a specific purchase, and the exercise of working them out against a real quote frequently changes an operation assessment of what is reachable. The difference between the two programs on a 70,000 dollar machine is 7,000 dollars, which is often the whole question.
This is the point that rescues most applications. Equity means your stake in the project, not money in a bank account. Equipment owned free and clear can frequently be counted toward the requirement rather than requiring a cash contribution, and a forestry operation with a yard full of paid-off machines is often much closer to the threshold than it believes. Land and buildings may count. In some structures a tribal contribution qualifies. The specific treatment varies by lender and by how the project is structured, which is exactly why the question to ask is what will you accept toward equity rather than can I borrow without a down payment.
Worth knowing because it tempers expectations. USDA discounts machinery, equipment and furniture to a maximum of 70 percent of cost or fair market value when assessing collateral. A machine worth 100,000 dollars contributes 70,000 of collateral value in the analysis. That discount reflects what used equipment realises in a forced sale rather than any judgement about your business, and it applies to equipment you already own as well as to the machine being financed. Factor it in when estimating what your existing fleet contributes, because the headline value and the lending value are different numbers.
The USDA requirement is stated as tangible balance sheet equity, and the word tangible is doing work. Intangible assets such as goodwill, certain capitalised costs and some intercompany items are excluded from the calculation. For most forestry operations this is academic because the balance sheet is dominated by physical assets, but for an enterprise that has acquired another business or carries significant intangibles it can mean the equity position on the accounts is stronger than the position USDA will credit. If your balance sheet has that shape, work the calculation before you apply rather than discovering it in underwriting.
If you are genuinely short, there are legitimate routes other than waiting. Paying down existing equipment debt converts leveraged assets into equity. A tribal contribution or capital injection changes the position directly. Taking a smaller machine or a used one rather than new reduces the project size and therefore the absolute equity required, which is frequently the most practical adjustment and rarely the first one considered. Structuring the purchase as part of a larger project with other qualifying contributions can also work. What does not work is borrowing the down payment, since that defeats the definition.
The single most productive thing you can do is ask a participating lender, early and specifically, what they will accept toward equity on your project. Not whether you qualify in the abstract. Lenders vary in how they treat owned equipment, how they value it, and how they structure projects to recognise contributions. A Native CDFI that regularly does these deals will often see a path that a general commercial lender does not, because they have structured around the same constraint many times. That conversation costs nothing and frequently resolves in ten minutes a question that has stalled an operation for months.
Every one of these calculations starts from a real number. Twenty percent of an estimate is an estimate. We provide written quotes with the configuration specified, which gives you the figure to work the equity question against and gives the lender the document the credit file needs. The forklift price guide covers current costs by type and capacity if you are still deciding what the operation requires.
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At least 20 percent equity in the project. This applies to all borrowers under the program regardless of business history. The USDA Business and Industry program requires only 10 percent tangible balance sheet equity from an established business, which is why it is worth putting both programs in front of your lender.
Frequently yes. Equipment held free and clear can often be counted toward the equity requirement rather than requiring cash. This is how operations with assets but limited liquidity meet the threshold. Treatment varies by lender and project structure, so ask the specific lender what they will accept rather than assuming.
BIA requires 20 percent for all borrowers. USDA B&I requires 10 percent tangible balance sheet equity for an existing business and 20 percent for a new one, with energy projects running 25 to 40 percent. On a 70,000 dollar machine that difference is 7,000 dollars, which is often decisive.
Equity calculated excluding intangible assets such as goodwill and certain capitalised costs. For most forestry operations the balance sheet is dominated by physical assets so the distinction is academic, but an enterprise carrying significant intangibles may find its accounting equity stronger than the figure USDA will credit.
No. Equity means your own stake in the project, and borrowed funds defeat the definition. Legitimate routes to improving your position include paying down existing equipment debt, a tribal capital contribution, or reducing the project size by choosing a used or smaller machine, which lowers the absolute amount of equity required.
USDA discounts machinery and equipment to a maximum of 70 percent of cost or fair market value for collateral purposes. A 100,000 dollar machine contributes 70,000 of collateral value. The discount reflects forced sale realisation rather than any assessment of your business, and applies to equipment you own as well as the machine being purchased.