How Does Equipment Financing Work?

Equipment Financing
To cover up to 100% of the costs for tow trucks, trailers, embroidery machines, boom trucks, and more, equipment financing or equipment leasing can be a fast, streamlined solution.

What Is Equipment Financing?

When you are looking for new equipment for your business, seeking out equipment financing is definitely a smart financial decision. You can use equipment financing loans to purchase almost any type of business equipment. The amount that you can borrow will depend both on the type of equipment that you’re purchasing and whether the equipment is pre-owned or brand new.

Most businesses qualify for equipment leasing or equipment financing in some form or another; however, the amount and the interest rate depend on the value of the equipment being financed, your business history, and your credit rating.

Flexible Business Financing for all Business Owners

Equipment financing solutions give you the opportunity to acquire new equipment or to upgrade, repair, or replace existing equipment, all while minimizing the negative impacts on cash flow that are typically associated with such large capital expenditures. Equipment financing also offers enhanced flexibility and greater tax advantages, helping to preserve existing credit availability and retain other working capital.

Leasing and Equipment Financing – Advantages

Most modern businesses will find that maintaining up-to-date, well-maintained equipment is both important and challenging. One way to do this while still achieving your profit goals and without impacting productivity is to use equipment financing.

Businesses will finance equipment for a number of different reasons. These include:

  • 100% financing, allowing you to retain working capital
  • Fixed-rate or floating-rate
  • Capital budget concerns
  • Longer terms and lower monthly payments
  • Unused transfers or underutilized tax benefits
  • Provision of off-balance sheet structure

Equipment financing can be found for almost any business equipment necessities, including but not limited to:

  • Vans, trucks, and cars
  • Computers and computing technology
  • Heavy machinery, construction equipment
  • Tools and industrial machinery
  • Medical equipment
  • Office supplies, furniture, and fixtures

Which Option is Right For You?

If you’re deciding between a lease or a loan, consider what sort of equipment you need to acquire. Equipment that will become obsolete after a few years or which requires updating makes a great option for equipment leasing.

However, if you’re looking at a piece of equipment that you plan to use and keep for a long time, then equipment financing is likely going to be the easiest and most cost-effective route to take. This also gives your business one extra asset, which can be very helpful if you will ever be considering another loan or line of credit in the future.

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