Equipment Financing  

Equipment financing works like a loan, except it’s tied to a specific purchase. You finance the cost of a new or pre-owned piece of equipment and make regular payments toward its purchase price. Equipment financing can be used on practically any business equipment – typically you’ll need a price quote from a vendor to qualify. Most lenders typically offer up to $150,000 for equipment financing. 

Equipment financing offers a hassle-free solution to upgrading important equipment without sacrificing your cash flow or impacting business. Like a business loan, your equipment financing will require an application for a set amount based on a price quote for the equipment you need. You may be approved for any amount of funds up to the full amount. Equipment loan terms can last anywhere from one to ten years. Like an auto loan, the lender will hold the equipment title as a form of collateral while you make regular payments. But whether you own your equipment at the end of your loan depends on if you choose equipment financing or leasing. 

Equipment financing vs. Equipment leasing  

There are two types of equipment loans you can consider: equipment financing and equipment leasing.  

• Equipment financing means you finance the cost of the equipment and at the end of the loan term, you own the equipment outright. This option works best for equipment that will be used for several years and maintains its value.  

• Equipment leasing offers more flexibility for equipment with high depreciation, or which requires regular maintenance. At the end of your lease, you’ll either renew or return the equipment to the lessor, who is also generally responsible for any maintenance or repairs the equipment incurs during your term. 

Section 179 is a popular small business tax benefit for a reason – it allows business owners to deduct the entire purchase price of a piece of equipment upfront rather than incrementally over several years. It gives a bigger tax savings upfront and improves overall cash flow for the next year.  

What’s even more appealing about this significant tax break is that it can be used with financed equipment. Any equipment purchased before the end of the calendar year qualifies for Section 179 – meaning you can set up your business for success by saving cash and giving yourself a bigger tax break.  

Your lender can help ensure you have the right paperwork for Section 179 when securing your equipment loan. 

Qualifying for an equipment loan is fairly simple.  

• At least six months in business 

• Fair to excellent credit 

• Equipment quote from a vendor 

Fill out an application from one of our preferred lenders – all applications are quick and only take a few minutes. Then, the lender will contact you to learn more about your equipment needs to help you determine if a small business loan or equipment financing would better suit your needs.