What it’s for
May fit an identified eligible asset with a known cost, condition, seller, useful life, and business purpose. The funder reviews both the business and the asset.
- A work van or eligible commercial vehicle
- HVAC testing, recovery, or installation equipment
- Plumbing or electrical service tools and machinery
- Landscaping, irrigation, or pool-service equipment
How it works
A loan can finance the purchase; a lease can provide use for an agreed period. Financing may cover up to the equipment cost, depending on the asset and provider. Ownership, purchase-option, and end-of-term terms vary by structure.
The business makes scheduled payments under the loan or lease. Terms may run up to about 5–7 years, depending on the equipment and provider. Confirm payment frequency, maintenance responsibilities, buyout, and end-of-lease terms.
What funders look at
- Equipment type, age, condition, and expected value
- The asset's cost, seller, and expected business use
- Time in business and business or owner credit
- Business bank statements or financial statements for larger amounts
How repayment or collection works
The business makes scheduled payments under the loan or lease. Terms may run up to about 5–7 years, depending on the equipment and provider. Confirm payment frequency, maintenance responsibilities, buyout, and end-of-lease terms.
What it typically costs
Compare the down payment, proposed loan rate or lease charge, total payments, fees, maintenance obligations, taxes, insurance, buyout amount, and end-of-lease costs.
What you'll need
The exact request depends on the business and transaction. These are common items to have ready for a provider conversation.
- Equipment quote, invoice, or purchase order
- Equipment specifications and condition details
- Recent business bank statements or financial information, particularly for larger amounts
- Business and ownership information
Providers also commonly review: Equipment type, age, cost, condition, and expected value; Seller or supplier information and the asset's business use; Time in business and business or owner credit; Bank statements or financial statements for larger amounts, plus existing obligations.
Watch-outs
Financing a rapidly depreciating or specialized asset can leave payments outstanding after the equipment's usefulness or resale value changes. For a lease, confirm the end-of-term return, renewal, or purchase obligations before signing.
The equipment commonly serves as collateral. Providers may also consider guarantees, liens, down payment, condition, age, and resale value.
Another path to compare: For a broader defined investment that includes more than equipment, compare a business term loan. For recurring materials and operating needs, compare a line of credit.