Equipment Financing

Equipment financing is a loan option for purchasing, repairing, or replacing machinery and equipment that is essential to your business. Use cases include everything from office furniture and medical equipment to farm machinery or commercial appliances. Equipment loans are easier to qualify for, don’t require additional collateral, and are quick to fund.

There is a broad range of equipment types that can be financed. Startups, new, and existing businesses may finance any of the following for example:

• Computers, Printers, and Other Hardware
• Office, Restaurant, or Retail Furniture
• Commercial Kitchen Appliances
• HVAC Units
• Commercial Vehicles
• Construction Equipment
• Farm Equipment
• Fitness Equipment
• Industrial Equipment
• Medical Equipment and More

An equipment loan is one of the easiest forms of business financing to qualify for since lenders typically use the equipment as collateral.

Yes, you can apply a Section 179 tax deduction for equipment financing. This write-off allows you to deduct the entire purchase price of the equipment you purchased in the applicable year.

This comparison is akin to a car loan versus a car lease. The biggest difference between equipment financing and equipment leasing is ownership. Equipment financing is a loan option that assigns ownership to the borrower. When you pay off an equipment loan, you own the equipment free and clear. Financed equipment can also be paid off early, sparing you additional interest.

On the other hand, equipment leasing is not owned by the lessee. Leased equipment also cannot be paid off early without penalties. It is not uncommon for an equipment lease to be structured as lease to own or have a purchase option at fair market value after a set term or upon termination.