Equipment Financing
Finance the machines, vehicles, and tools your business runs on. Up to 100% financing, terms matched to the equipment's useful life, and approval driven by the asset itself.
What is equipment financing?
Equipment financing is a loan or lease used to purchase business equipment — anything from a service van to a CNC machine, restaurant hood system, dental chair, or commercial truck. The equipment itself acts as collateral, which makes equipment financing one of the easiest types of business credit to qualify for.
Two structures are common: equipment loans (you own the equipment, financed over a fixed term) and equipment leases (you use the equipment for a fixed term, with options at the end including purchase, return, or upgrade). Both can be structured to match the asset's useful life — typically 2 to 7 years.
Because the loan is secured by the equipment, lenders can extend financing to businesses that wouldn't qualify for unsecured working capital. Most lenders fund 80–100% of the equipment's invoiced value.
How it works
- 1
Identify the equipment and get a quote
Vendor provides an invoice or quote — most lenders fund directly off the vendor invoice.
- 2
Apply with basic financials
1-page application, 3 months of bank statements, and ID for most deals under $250K. Larger deals may require tax returns.
- 3
Approval and term sheet
Approval often within 24–48 hours. Term sheet outlines rate, term, down payment (typically $0–10%), and any documentation fees.
- 4
Lender pays vendor and equipment ships
Once docs are signed, the lender pays the vendor directly and you take delivery. Payments begin per the agreed schedule.
Key details
Qualifications
- 6+ months in business (some lenders fund startups with strong personal credit)
- Vendor invoice or detailed equipment quote
- Personal credit pull (soft initial, hard on approval)
- Bank statements showing revenue sufficient to support payments
Pros and cons
Pros
- Up to 100% financing — preserves cash for operations
- Equipment acts as collateral, easing qualification
- Fast approval (often 24–48 hours)
- Tax benefits (Section 179 deductions on qualifying equipment)
- Can finance new or used equipment in most cases
Cons
- Equipment is the security — default can mean repossession
- Used equipment may have shorter terms or higher rates
- Soft costs (delivery, install, software) sometimes financed separately
- Pre-paying may not reduce total interest in lease structures
How it compares
Side-by-side comparison of small business funding options.
| Product | Speed | Cost | Term | Best for |
|---|---|---|---|---|
| SBA 7(a) | 30–90 days | Prime + 2.25–4.75% | Up to 25 yrs | Largest, lowest-cost capital |
| Business Line of Credit | 1–3 weeks | 8–25% APR | Revolving 1–3 yrs | Ongoing flexibility |
| Term Loan | 1–2 weeks | 10–30% APR | 1–10 yrs | One-time investments |
| Working Capital | 1–3 days | 1.10–1.40 factor | 3–18 mo | Speed and minimal docs |
| MCA | Same day–48 hrs | 1.15–1.50 factor | 3–12 mo | Lowest credit / fastest funding |
| Equipment Financing | 1–7 days | 7–25% APR | Useful life of asset | Equipment-secured purchases |