Finance the equipment your business actually runs on.
From construction machinery to medical devices to commercial vehicles — the equipment itself acts as collateral, so approval is fast and rates stay competitive.
What equipment financing is
Equipment financing is a loan (or lease) where the equipment you're buying acts as collateral. Because the lender has a tangible asset to repossess if you default, equipment loans are easier to qualify for and carry lower rates than unsecured business loans of similar size.
Both equipment loans (you own the equipment outright at the end of the term) and equipment leases (you can purchase, upgrade, or return at end of term) are available. Which one is right depends on how long you plan to use the equipment and how the tax treatment matches your business.
Common use cases: heavy construction equipment, food service kitchens, dental and medical devices, commercial vehicles and trailers, manufacturing machinery, IT hardware, and specialty industry equipment.
How equipment financing works
You identify the equipment you want, get a quote from the dealer or vendor, and submit that quote along with a short application. The lender underwrites your business and approves financing for the equipment cost (sometimes including soft costs like installation and shipping).
At closing, the lender pays the vendor directly — you don't handle the lump sum. You then make fixed monthly payments on the equipment loan or lease for the agreed term.
In most cases, the equipment itself secures the loan, so additional collateral is not required. For larger amounts or weaker credit profiles, a personal guarantee may be added.
What to weigh before you apply.
Pros
- Easier to qualify than unsecured business financing of similar size
- Competitive rates because the equipment secures the loan
- Preserves working capital for other uses
- Tax treatment can be favorable (Section 179 deduction often applies — consult your CPA)
Cons
- Equipment can be repossessed in default
- Down payment of 10–20% is often required
- Specialty or used equipment can be harder to finance
- Variable-rate options exist but most equipment financing is fixed-rate
How it stacks up against other funding products.
Questions before you apply.
Can I finance used equipment?
Yes, though terms typically depend on the age and condition. Equipment under 10 years old generally finances on standard terms; older equipment may require a larger down payment or shorter term.
Do I need a down payment?
Many programs require 10–20% down. Zero-down options exist for businesses with strong credit and 2+ years of history.
Should I lease or finance?
Lease if you upgrade frequently or want lower monthly payments and tax-deductible lease expense. Finance if you plan to keep the equipment for its full useful life.