Understanding equipment financing helps you make smart decisions about acquiring the tools and machinery your business needs.
Equipment financing is a loan or lease used to purchase business equipment—machinery, vehicles, technology, or tools. The equipment itself serves as collateral, making it easier to qualify than unsecured loans. Terms typically match the equipment's useful life (3-7 years), and you own the equipment once paid off. It's ideal for businesses that need equipment to operate but want to preserve cash flow.
Equipment financing allows you to acquire equipment without paying the full cost upfront. Here's the process:
Select the equipment you need—vehicles, machinery, computers, restaurant equipment, medical devices, or construction tools. The lender may require quotes or invoices from vendors.
Submit your application with equipment details and financial documents. Approval is typically faster than unsecured loans because the equipment secures the loan. Many lenders approve within 24-72 hours.
Once approved, the lender pays the equipment vendor directly. You receive the equipment and start using it immediately for your business operations.
Repay the loan through fixed monthly payments over 3-7 years. Once paid off, you own the equipment outright. The equipment serves as collateral, so if you default, the lender can repossess it.
Traditional loan where you own the equipment after paying it off. Fixed monthly payments, predictable terms. Best if you plan to keep the equipment long-term.
Rent equipment for a set period, then return it, buy it, or upgrade. Lower monthly payments, flexibility to upgrade. Best if equipment becomes outdated quickly (technology, vehicles).
Compare equipment financing vs leasing to choose the right option.
Most business equipment can be financed, including:
Equipment financing is often easier to qualify for than unsecured loans:
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 Leases are better if equipment becomes outdated quickly or you want lower payments. Compare equipment financing vs leasing to decide.
Yes, many lenders finance used equipment, though rates may be higher and terms shorter. The equipment must be in good condition and have clear value.
Down payments range from 0-20%, depending on your credit, the equipment type, and lender. Strong credit and new equipment often qualify for 0% down.
The lender can repossess the equipment since it serves as collateral. However, many lenders work with borrowers to restructure payments before repossession. Communicate early if you're having trouble.
Explore our equipment financing options and terms.
Compare loans and leases to choose the right option.
Industry-specific equipment financing for construction businesses.
Compare all financing options for your business needs.
Get fast approval and flexible terms to acquire the equipment your business needs.
24-72 hour decisions • Equipment as collateral • Clear terms