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What Is Equipment Financing?

Equipment financing is a loan or lease used to purchase business equipment—machinery, vehicles, technology, or tools. The equipment itself serves as collateral, making qualification easier than unsecured loans. Terms typically align with the equipment's useful life (3–7 years), and you own the equipment once paid off. This approach is ideal for businesses needing equipment while preserving cash.

  • Equipment serves as its own collateral — easier to qualify than unsecured loans
  • Terms of 3–7 years typically aligned with equipment's useful life
  • 600+ credit score, 6+ months in business, $10k+/month revenue required
  • Potential Section 179 tax deductions up to $1.16M (2026)
  • Loan amounts from $25k to $2M+

How Equipment Financing Works

1. Select Equipment: Identify the vehicles, machinery, computers, restaurant equipment, medical tools, or construction machinery you need.

2. Apply & Get Approved: Receive approval within 24–72 hours with minimal documentation.

3. Lender Pays Vendor: The lender pays the equipment vendor directly on your behalf.

4. Make Fixed Payments: Repay with fixed monthly payments over 3–7 years.

Types of Equipment Financing

Equipment Loans: You own the equipment after payoff. Fixed rates, 3–7 year terms, tax benefits through depreciation and interest deductions.

Equipment Leases: Lower monthly payments with upgrade flexibility. You return the equipment after the term ends.

What Equipment Qualifies

Common eligible items include: vehicles, construction machinery, manufacturing equipment, restaurant equipment, medical/dental equipment, technology/computers, office furniture, agricultural equipment, landscaping tools, printing equipment, fitness equipment, and point-of-sale systems.

Benefits of Equipment Financing

  • Preserve operational cash while acquiring needed equipment
  • Easier qualification (600+ credit score)
  • Potential Section 179 deductions up to $1.16M in 2026
  • Predictable fixed monthly payments
  • Immediate equipment access without large upfront cost

Qualification Requirements

Minimum Requirements: 6+ months in business, $10,000+ monthly revenue, 600+ credit score, equipment quote.

Typical Terms: $25k–$2M+, 3–7 year terms, 6–25% APR, 0–20% down payment.

Frequently asked questions

What's better: equipment loan or lease?
Loans are better if you'll keep equipment long-term and want to own it. Leases are better if equipment becomes outdated quickly or you want lower payments.
Can I finance used equipment?
Yes, though rates may be higher and terms shorter, provided the equipment is in good condition with clear value.
Do I need a down payment?
Down payments range from 0–20%, depending on credit, equipment type, and lender. Strong credit and new equipment often qualify for no down payment.
What happens if I can't make payments?
The lender can repossess the equipment since it serves as collateral. However, many lenders work with borrowers to restructure payments before repossession.

Ready to get funded?

Apply once and get a clear funding offer in 24–72 hours — no hard credit pull to pre-qualify.

Apply Now — It's Free →