Guide
Equipment Financing Explained
The asset secures the deal, which is why equipment financing is usually the cheapest capital a growing business can get.
April 16, 2025 · 6 min read
Why pricing is better
The financed equipment serves as collateral, so recovery in default is straightforward and pricing reflects that. Approval leans on the asset's value and resale market as much as on the borrower's credit.
Terms typically run 24 to 72 months, matched to the equipment's useful life.
Loan versus lease
A finance agreement builds ownership and depreciation benefits. A lease lowers monthly cost and shifts obsolescence risk to the lessor, with purchase, renewal, or return at the end.
Choose ownership for long-lived assets you will run into the ground; choose leasing for technology that dates quickly.
What to prepare
A vendor quote or invoice, the equipment's age and condition if used, and a short statement of the revenue or cost saving the asset produces.
Also confirm soft-cost coverage — delivery, installation, and training are often financeable, and paying them from operating cash defeats the purpose.