Financing options
Equipment Financing Options, Compared
In short: Equipment financing options fall into a few practical families: a term loan you repay to ownership, a lease for use of an asset, and structured variations of both. The right choice depends on how long you keep the equipment, how fast it dates, and how the payment fits your cash flow. Approval and terms depend on the lender and your qualifications.
The options, and who each one suits
| Option | How it works | Suits | Watch for |
|---|---|---|---|
| Equipment loan | You borrow and repay over a set term; you own the equipment subject to the lender’s security interest | Equipment you will keep and rely on for years | Higher monthly payment than a comparable lease |
| Equipment lease | You pay for use of the asset for a term; the lessor owns it | Equipment that changes, dates quickly, or is needed short-term | End-of-term obligations: return conditions, mileage or hour limits, buyout terms |
| Sale-leaseback | You sell equipment you already own and lease it back, releasing capital | A business with equity tied up in machinery | You give up ownership of an asset you already had |
| Dealer or manufacturer program | The dealer arranges financing on its own terms | A purchase already being made through that dealer | Terms vary; we cannot promise a program applies to you |
We describe categories, not products. Which structures a provider actually offers, and on what terms, is decided by that provider.
What changes the monthly payment
Two levers move the payment more than anything else: how much you put down, and how long the term runs. A third, the rate, is set by the provider.
- •A larger down payment lowers the amount financed, so both the monthly payment and the total finance cost fall.
- •A longer term lowers the monthly payment but raises the total finance cost, because interest accrues for longer.
- •A shorter term raises the monthly payment and lowers the total finance cost.
- •The rate is the provider’s decision and reflects the file. We do not publish available rates.
How to choose
- 1.Decide how long you expect to keep the equipment. If the answer is “several years,” a loan usually fits better. If it is “one or two years,” a lease is worth comparing.
- 2.Work out the highest monthly payment the business can carry comfortably in a slow month, not a good one.
- 3.Compare the total cost of capital over the full term, not just the monthly figure.
- 4.Ask what happens at the end of the term, and what happens on early payoff.
- 5.Ask about insurance, maintenance and any return conditions before you sign.
Frequently asked questions
- Which structure is best for my business?
- It depends on how long you will keep the equipment, how fast it becomes obsolete and how your business handles depreciation. Discuss the specific structure with the financing provider and your accountant before you sign.
- Can soft costs like freight and installation be included?
- Sometimes. Describe those costs in your request so the amount reflects your real funding need. Whether they can be included is determined by the financing provider.
- Do you publish rates or terms?
- No. Rates, terms and eligibility come from the financing provider after review. We do not publish rate ranges we cannot substantiate.
- Is a down payment always required?
- Down payment expectations vary by provider, equipment type, condition and business profile. Telling us what you can contribute helps set accurate expectations early.
Submitting a pre-qualification request is not an application decision and is not an approval, offer or commitment to lend. All financing is subject to review and approval by the applicable financing provider.
Related pages
Not sure which structure fits?
Submit one request and describe what you need. We will explain the options in plain language.
Phone: 888-629-3416 · Submitting a pre-qualification request is not an application decision and is not an approval, offer or commitment to lend. All financing is subject to review and approval by the applicable financing provider.
Last updated · Reviewed and published by Ai Loan Brokerage LLC, operating as EquipmentLoan.com (Loan Broker).