Funding Products
Equipment Financing: How to Fund Machinery, Vehicles and Technology
When the thing you are buying holds value, the financing gets easier. Equipment financing is secured by the asset, which reduces the lender's risk and typically produces longer terms and lower payments than unsecured working capital.
What counts as equipment
- Commercial vehicles, trucks and trailers
- Construction and heavy machinery
- Manufacturing and production lines
- Restaurant and commercial kitchen equipment
- Medical, dental and diagnostic devices
- Servers, point-of-sale systems and business technology
Financing versus leasing
Financing means you own the asset and build equity while paying it off. Leasing means you pay for the use of the asset, often with a lower monthly payment and an option to buy at the end.
Own it when the equipment has a long useful life and retains value. Lease it when the technology turns over quickly or you want to keep the option to upgrade.
Typical terms
Terms usually run 24 to 72 months and are matched to the expected life of the asset. Down payments range from zero to 20 percent depending on credit strength, the age of the equipment, and whether it is purchased new or used.
The key discipline is not to finance a five-year machine on a nine-month schedule. When the payment outlasts the productive value, the deal was structured backwards.
What to prepare
- A written vendor quote or invoice with the exact model and price
- Three to six months of business bank statements
- Business formation documents and EIN
- A short note on how the equipment increases revenue or reduces cost
Frequently asked questions
- Can I finance used equipment?
- Yes. Used equipment is commonly financed, though terms may be shorter and a down payment more likely depending on age and condition.
- Do I need perfect credit?
- No. Because the asset serves as collateral, equipment financing is often available to businesses that would not qualify for an unsecured term loan.
- How fast can equipment financing close?
- Straightforward transactions with a vendor quote in hand frequently close in one to three business days.