Last updated: November 10, 2026
Directional Drill Financing for Utility and Fiber Contractors
Pay for a new or used HDD rig and the mud system, locator and tooling it works with.
Directional drill financing pays for a horizontal directional drilling rig over a set term, together with the mud system, locator and tooling bought alongside it, and the equipment typically secures the deal.
This page is written for utility, telecom and fiber contractors, and for small boring crews buying a first rig. It’s rarely just one machine. Used rigs get equal weight.
Comparing it with other machines? Start with Paramount Financial’s heavy equipment financing overview. This page stays on drills.
What directional drill financing covers beyond the rig
A drill alone bores nothing. Fluid has to be mixed and pumped, the bit has to be tracked underground, and rod has to be fed down the hole.
Some makers sell the bundle. Ditch Witch’s 2019 JT20XP product profile, republished from Trenchless Technology, describes a package of “the JT20XP HDD and the XP44 mixing system,” optimized around a 500-gallon fluid tank, which is a good picture of what one quote can hold. A used rig might come with all of that or none of it. Either way, an itemized bill of sale shows a lender exactly what the money is buying.
What goes into one HDD purchase
Horizontal directional drilling, or HDD, installs conduit and pipe underground along a steered path without opening a trench. The rig pushes rod into the ground, a locator tracks the bit, and drilling fluid cuts and carries away the soil. So expect several line items.
| Item | What it does | What a lender looks for |
|---|---|---|
| Drill rig | Pushes and pulls rod along the bore path | Make, model, serial number and hour meter reading |
| Mixing system | Mixes and pumps the drilling fluid | Tank size, pump and power unit, listed with the rig or on a line of their own |
| Locator | Tracks the bit so the bore stays on its path | Model and serial number of the receiver and transmitter |
| Rod, bits and reamers | Cut, steer and enlarge the hole | Rod count and length, plus wear condition on a used set |
| Support equipment | Exposes existing lines and moves the crew and the rig | A separate quote or invoice line for each vacuum excavator, trailer or truck |
Used directional drills: hours, wear parts and records
Used brings its own questions. Hours matter, “especially in a smaller-sized drill,” according to Vermeer’s 2024 guide to buying a used drill. A small unit with high hours can look worse than a larger drill with high hours of its own.
Vermeer’s 2016 guide adds cautions. Used drills usually don’t come with a warranty, and wear items or even major components could be due for replacement. And, in Vermeer’s words, “some lenders don’t offer financing for a drill older than seven years.” Auctions add one more risk, which is not knowing the machine’s work history.
How utility and fiber work sizes the rig
Before any rod goes in the ground, somebody calls 811. Vermeer’s 2022 guide to installing fiber by HDD says locates are required before any digging, and that existing lines get potholed, exposed with care so their exact position and depth can be confirmed, ideally by vacuum excavation.
Picture a crew pulling conduit down a street where gas, water and old telecom lines all run underground. Each one gets exposed first, so a vacuum excavator rides along with the drill, and a compact machine (see mini excavator financing) or a loader (see backhoe loader financing) might too. Vermeer matches its D23x30 S3 and D20x22 S3 to contractors who average about 300 feet per drill shot, a different job from a crew boring short runs under driveways.
Three numbers behind HDD work
$42.45B
The federal BEAD broadband grant program, as NTIA describes it
Source: NTIA, BEAD program page
300
Average feet per shot Vermeer cites for its D23x30 S3 and D20x22 S3 drills
Source: Vermeer Pro Tips, June 2022
Ways to structure directional drill financing
Other equipment on a bore crew’s list
What HDD contractors ask before financing a rig
Can a used directional drill be financed?
A used rig can be financed, and a lender’s first questions are its age, its hours and who serviced it. Vermeer’s 2016 buying guide warns that some lenders don’t finance a drill older than seven years, so the model year on a listing can end a deal before it starts. The used equipment financing guide covers how that plays out across equipment types.
What comes in a typical directional drill package?
Short answer: it varies, but a new package can pair the drill with a drilling fluid mixing system. Ditch Witch’s JT20XP profile lists the drill and an XP44 mixing system with a 500-gallon tank. Locators, rod and tooling may be quoted separately. Itemize every piece.
Does the hour meter reading matter on a used HDD rig?
It matters, and Vermeer says it matters most on smaller drills, where high hours weigh more heavily than they do on a larger machine. Hours aren’t everything. Detailed maintenance records show how well earlier owners looked after the drill. The carriage slides, rods and subsavers show the rest.
Is a directional drill financed with a loan or a lease?
The better question is who should own the rig when the term ends. With a loan, or an equipment finance agreement, the business owns the drill from day one and the lender holds a security interest, while with an equipment lease the lessor owns it during the term, and a fair market value lease usually ends with a choice to return, renew or buy. A UCC-1 filing typically records the lender’s interest in the collateral. Ownership is the real split.
Can the mud system, locator and drill rod be financed with the drill?
Three items are worth getting on the same quote as the drill: the mixing system, the locator, and the rod and tooling. A lender can only review what’s itemized, so ask the seller for serial numbers, tank and pump details and a rod count. Whether a given lender includes the extras is that lender’s call. Ask early.
How does broadband funding affect a directional drill purchase?
BEAD is a $42.45 billion federal grant program meant to connect every American to high-speed internet, and NTIA announced allocations for all 56 states and territories in June 2023. Whether that becomes bore footage for one contractor depends on the state’s subgrants and the bids that follow. See NTIA’s BEAD page. A rig payment shouldn’t rest on a contract nobody’s awarded yet.
Does a directional drill purchase qualify for Section 179?
Equipment bought and placed in service during the 2026 tax year can be eligible for the Section 179 election, but whether a given drill qualifies depends on the business’s own tax situation. The IRS explains the mechanics in Publication 946 and the Form 4562 instructions. Paramount Financial’s Section 179 deduction guide covers the current-year figures. Consult your tax advisor.
Ready to finance your next HDD rig?
Tell us about the drill and what comes with it, new or used, and a member of our team will follow up.