Equipment financing can help a business purchase machinery, vehicles, computers, or other essential assets. The equipment often serves as collateral, which means the provider may repossess it if the agreement is not repaid.
Loan and lease structures differ
An equipment loan is designed to build ownership as the balance is repaid. A lease provides use of the asset for a period and may include purchase, renewal, or return options at the end.
Prepare details about the asset
Providers may request an invoice or quote, the equipment’s age and condition, expected useful life, and information about the seller. Business revenue, time in operation, and owner credit may also be reviewed.
Compare more than the payment
- Down payment and financed amount
- Interest rate, fees, and total repayment
- Ownership and end-of-term options
- Maintenance, insurance, and tax responsibilities
- Personal guarantee or additional collateral
Visit our small business loans page to compare equipment financing with other business funding concepts.