We specialize in providing financing solutions for business equipment.

Business equipment financing operates similarly to traditional term loans in terms of payment structure. You make fixed periodic payments (including principal and interest) each month until the principal balance is fully paid off, at which point you own the equipment outright.

Equipment financing options allow businesses to borrow up to $5 million per piece of equipment, making it ideal for heavy equipment purchases. Interest rates with equipment finance companies start as low as 5%. Qualifying for equipment financing typically requires a minimum credit score of 600 or above.

Examples of equipment that businesses can purchase using equipment financing include computers, printers, office furniture, farm equipment, industrial machinery, vehicles, medical and dental equipment, restaurant appliances, and more specialized items like cannabis equipment or gym equipment.

With equipment financing, the equipment itself serves as collateral, which contributes to the lower interest rates and faster approval times. To assess the equipment’s value, finance companies may request details such as purchase price, age, seller, manufacturer information, and other relevant details.

Equipment financing also offers potential tax benefits through Section 179 Tax Deductions, which can reduce a business’s tax liability for most types of equipment purchases. This deduction can be significant for businesses looking to lower their overall tax burden, but it’s advisable to consult with an accountant or tax professional to understand specific implications for your business.

To secure larger loan offers with lower interest rates and longer terms, small businesses typically need to provide collateral. Equipment financing companies prefer collateral to minimize their risk in case of default. By using the equipment itself as collateral, these lenders can offer favorable terms, even to businesses with lower credit scores or modest annual revenues.

Traditional banks or alternative lenders may also overlook the age of a new business if collateral is involved. With equipment financing, the purchased asset serves as security, allowing businesses with imperfect financial profiles or shorter operating histories to apply for loans.

In contrast, obtaining a standard term loan without collateral would likely result in higher interest rates and less favorable terms.

Equipment financing also enables businesses to own the asset outright rather than leasing it. While leasing offers advantages, owning typically proves more cost-effective over the long term. Additionally, monthly payments with equipment financing help manage cash flow by spreading out the cost over time.

Moreover, interest payments on equipment financing are often tax-deductible, which is a significant benefit for businesses. Unlike lease payments, which may also be deductible, owning the equipment outright provides additional financial advantages.

Despite its advantages, equipment financing comes with some drawbacks worth considering.

One concern is the risk of new equipment becoming outdated over time. Industries evolve rapidly, and there’s no guarantee that the equipment will retain its value by the time the loan is paid off. In such cases, opting for equipment leasing might be more cost-effective, as it allows for upgrading to newer models without being stuck with outdated technology.

Another drawback is maintenance and repair costs. When you own the equipment, you’re responsible for its upkeep. In contrast, leasing often includes maintenance services provided by the financing company, relieving you of this financial burden.

Lastly, financing equipment involves paying interest on a term loan, which increases the overall cost compared to purchasing the equipment outright. This can impact your financial planning and budgeting over the loan term.

In conclusion, while equipment financing offers numerous benefits, including quick access to funds and using the asset as collateral, it may not be suitable for businesses concerned about equipment depreciation or those preferring to avoid ongoing maintenance costs.

PROS

• Quick access to funds
• Easy approval process
• Accepts less than perfect credit scores
• Asset used as collateral
• Borrow up to 100% of market value

CONS

• Risk of equipment obsolescence
• Maintenance costs when owning
• Interest payments increase overall cost

Approved businesses typically meet the following criteria:

• ANNUAL REVENUE: $250,000 or more
• CREDIT SCORE: 600 or higher
• TIME IN BUSINESS: At least 1 year

The equipment financing application process is efficient, supported by our highly rated customer service with over 1450 5-star reviews. Typically, with most online lenders, the process can take between 3 to 10 business days, contingent on factors like loan terms, amount, and any local government registration requirements for the equipment or vehicle.

Here’s a straightforward guide to applying:

Step 1: Assess Your Decision to Purchase Before proceeding with the application, consider whether purchasing the equipment is the right choice for your business:

• Is the equipment likely to become outdated soon?
• Will you need this equipment in the future?
• Is the purchase critical enough to justify the interest payments?
• Do you plan to use the equipment long-term?

This evaluation helps determine whether equipment financing or leasing might be more suitable for your needs. It’s also essential to know the current market value and the final invoice price to request the appropriate funding amount.

Step 2: Gather Required Documents Applicants for equipment financing will need to gather the following documents and information:

• Valid United States driver’s license
• Voided check
• Bank statements from the past three months
• Invoice for the equipment
• Financial statements (if required)

Step 3: Complete the Application The application process is streamlined and can be completed in just a few minutes. You can choose to fill out our one-page online equipment financing application or contact us directly for personalized assistance from a dedicated account manager.

Step 4: Consult with a Representative After submitting your application, a senior account executive will reach out to you. During this consultation, we will discuss your best equipment financing options and provide clear details on fixed-term business loan offers. You will receive full transparency regarding loan options, rates, and terms applicable to your chosen equipment financing option.

Step 5: Approval and Funding Once your application passes underwriting and receives credit approval, your equipment financing loan will be set up. The funds will then be disbursed directly to the equipment vendor. You can opt for convenient automatic payment setup or arrange payments via check or electronic transfer.

If your application for business equipment financing is not approved, we may suggest exploring alternative small business loans and financing options tailored to your specific needs. While these secondary options enable business owners to acquire equipment, they may come with less favorable terms compared to equipment loans, such as slightly higher interest rates and shorter repayment terms. Examples include term loans or other types of small business loans, depending on the lender and loan product.

If your equipment financing application was declined due to factors like poor credit scores or cash flow issues, alternative routes to consider include obtaining a business credit card or a personal loan. Both options typically have more lenient qualification criteria compared to small business loans. Before reapplying with an equipment financing company, it could be beneficial to explore credit repair services aimed at improving both personal and business credit scores. These services focus on addressing the specific credit issues affecting your score, potentially enhancing your eligibility for future financing opportunities. Additionally, exploring options at your local credit union may provide additional avenues for securing financing tailored to your needs.