Equipment Financing

Loans up to $5 Million

Per Piece of Equipment

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Intro to Equipment Financing Loans

If you are a small-business owner, and want to purchase expensive equipment without a large down payment or high interest rates, then business equipment financing & equipment leasing can help. You do not need to have a lot of cash or endless financial statements. Business equipment financing and equipment leasing can help you. When it comes to funding equipment for small businesses, they have more options than just their local bank.

You can make small monthly payments with business equipment loans. It’s almost like leasing equipment. The owner of the business owns all the equipment once the debt is cleared.

Equipment costs are a common concern for many small business owners. Equipment costs money to purchase and maintain, and this can affect your cash flow.

It is one of the highest approval rates for small business equipment funding with online lending or even local banks such as Wells Fargo, and Bank of America. It’s usually hovering around 80%. Application and payment options are simple. Equipment financing requires minimal paperwork. Small business owners are able to get funding in just a few days with no or low down payments, and at rates as low as 5%. This allows them to qualify for tax deductions in many cases.

What is Equipment Financing? Who Can Benefit from It?

Business equipment financing is similar to business loans. The only difference is that it’s for equipment purchases. Equipment financing offers small businesses the opportunity to purchase equipment with low or no down payments, flexible repayment terms and competitive rates.

In general, alternative equipment lenders, and most equipment finance lenders, will allow the borrower to use the asset to protect them. This lowers the interest rate and can increase the loan amount. These points will help you to maintain cash flow if you need to fund equipment.

How much money can you borrow for business equipment loans?

In most cases, a small business will be able to get 100% of the amount they need to buy equipment or lease equipment. Some financing may require a minimum credit score and a downpayment. Equipment financing is a good option because it offers lower interest rates than other options such as unsecured business credit cards, invoice factors or merchant advances.

How Does Equipment Financing Work?

In terms of payment options, equipment financing is similar to term business loans. You make fixed monthly payments (principal and interest included) until the principal is paid off. You own the equipment outright at the end.

The business equipment loans are perfect for financing heavy equipment. Equipment finance companies offer interest rates as low as 5%. To qualify for equipment financing, you don’t need excellent credit. You only need to have a minimum score of 600 or higher.

Equipment financing is available for businesses to buy:

The rate is low because the asset is collateral. You don’t need to wait for weeks, as quick approval is common.

The equipment loan financing company will ask for details about the equipment purchased, such as the price, age, manufacturer, seller and other information. This information is needed by the equipment financing provider to make sure they can recover their investment if there’s a default.

Business Equipment Financing Example:

The equipment financing system works by providing you with the ability to grow your company without having to save up for long periods of time. This gives businesses an edge over their competitors.

Say you are a baker. You need a $75,000 industrial oven to increase your cupcake production by 3x.

Applying for an equipment-loan can help you negotiate a five year term at a low 5% rate of interest. You’ll also save money because the oven is collateral. This will allow you to get a lower interest rate and a higher loan amount. You will also most likely not need a guarantee when using equipment financing.

You own your equipment after five years of making regular payments on the equipment financing loan. Equipment financing can be the most cost-effective way to purchase expensive machinery.

Equipment Financing is the "Go-To" Source for Growth

  • According to Monitor Daily the industry of equipment financing reached a high of $1.16 trillion in 2021 . Around 80% of companies that purchased equipment or software used different financing options.
  • 60 percent of U.S. small business owners turn to equipment leasing and financing options to keep their business running smoothly. The Equipment Leasing and Financing Association provided this information.
  • According to ELFA’s Monthly Leasing & Finance Index, in January 2020 the approval rate for equipment financing was 76.3%. The data shows that three out of every four applicants were approved for an equipment financing by equipment lenders.

According to the Equipment Leasing and Financing Association, as of December 20, 2022,  new financing volume had increased by 9% year over year and 6% at the end of the calendar year

What are the Advantages of Equipment Financing?

Small businesses need collateral to receive larger loans with lower interest rates and longer terms. It is not surprising that equipment loan financing companies are concerned about their risk in the event of a default. , an equipment financing lender, will offer favorable terms on equipment loans if the collateral is used. Even if the company’s credit score is not as high as a blue-chip or its annual revenue isn’t seven figures, they can still qualify for favorable terms.

a traditional bank or alternative lender might overlook the age of the business if collateral is present. Secure financing equipment loans use the asset as collateral. This means that even small businesses who have a poor credit rating, a flawed balance sheet, erratic cash flow or less than 2 years of banking experience can apply for financing.

You can also own equipment instead of leasing it by financing. Although leasing equipment has its advantages, it is likely to cost more in the end than buying. We’ll talk more about it in a moment.

You can also avoid paying for the whole cost up front by using equipment financing. You can make monthly payments to improve your cash flow.

Did you know interest payments are generally tax-deductibles? This is a major selling point for most businesses, and it’s one of the main equipment financing pros to consider. Although lease payments might qualify as a tax deduction , why not buy it instead?

What are the Disadvantages of Equipment Financing?

First, there is the concern that new equipment will become outdated with time. This is a legitimate concern. No one can predict the future or their revenue. The industries are changing at a rapid pace. By the time the equipment loan is paid back, the asset could be worthless. In the worst case scenario, the asset could lose most of its worth while paying off the equipment loans. In these situations, equipment leasing could have saved you more money.

Fixing equipment that breaks down is another drawback of equipment financing. You have to repair it if you own it. If you are leasing equipment, then the financing company will handle the maintenance and repair.

Equipment financing is a great option for some companies who are comfortable with the terms of their loan. It’s not a good idea for other businesses.

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How to Apply for Equipment Financing

Our 1450+ 5-star rated customer service makes the equipment financing application process simple. The process takes between 3-10 days with online lenders, depending on loan terms, amount and whether the vehicle/equipment needs to be registered at the local government.

You can apply for financing by following these simple steps:

Your Business Equipment Financing Gets Set Up – Now What?

A term loan can be used to finance equipment. This is a great way to build (or improve) your credit.

What is the best way to get the best terms and interest rates on your next equipment loan?

It’s pretty straightforward. It is important to pay all your small businesses on time. Keep your credit card balance below the limit if you have a business credit or a revolving line of credit. This will improve your personal and business credit scores. You will then be able to get better rates and terms when you next need financing for your small business.

What if I am Declined for Equipment Loans?

We may suggest other financing and small business loan options if your request for equipment financing is denied. This secondary option allows business owners to buy equipment. The terms may not be as favorable compared to an equipment loan. This will result in a higher rate of interest and a shorter term. Term loans and other small business loans are examples of possible examples.

It is possible that your equipment financing application was declined because of poor credit or cash flow. In this situation, a credit card for business or a loan would be the best option to obtain equipment financing. Credit cards and personal loans have a much easier qualification process than small business loans. Before applying for equipment financing, it is best to use credit repair services in order to improve your business and personal credit scores. These services will help you improve your credit score by improving the factors that keep it low. Try your local credit union for their options.

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Current monthly sales deposit average to your business bank account?
How much Working Capital would you like for your business?