Funding types

Equipment financing: how to buy trucks, machines and tools and pay over time

Equipment financing lets the equipment secure the deal, so it can be easier to qualify for than an unsecured loan. Here is how it works and what to prepare.

Best for: Vehicles, machinery, kitchen and medical equipment
Speed: Days to a couple of weeks
Credit: Fair credit and up
Repayment: Fixed monthly payments
Collateral: The equipment itself

With equipment financing, a funder pays for the equipment and you repay in installments over a set term. The equipment is the collateral, and when the loan is repaid, it's yours. Terms are usually matched to how long the equipment will be useful.

What you can finance

Trucks, vans, trailers and work vehicles
Restaurant and commercial kitchen equipment
Construction and landscaping machinery
Medical, dental, salon and fitness equipment
Manufacturing machines, computers and point-of-sale systems

Financing vs. leasing

Financing means you're buying it over time. Leasing means you're renting it, which can lower payments and make upgrades easy but may leave you without ownership at the end.

Tax note

Businesses can often deduct the cost of qualifying equipment in the year it's put into service under Section 179 of the U.S. tax code, even when financed. Ask your accountant how it applies.

What to prepare

A quote or invoice from the seller
Recent business bank statements
Business details and an owner's ID

More: equipment financing explained.

Questions owners ask

Can I finance used equipment?

Many funders finance both new and used equipment. Older equipment may come with shorter terms.

Do I need a down payment?

It depends on the funder and your profile. Some deals finance most or all of the price.

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General information, not financial or legal advice. Terms vary by lender and business.

Industries that use this most

Each page below covers what that industry borrows for, how many independent businesses of that kind are operating, and what an underwriter looks at in that sector.

Equipment financing is secured by the equipment itself, which is why it prices better than most other options. Merchant Fund Express finances vehicles, machinery and kitchen and medical equipment for independent businesses.

Funding subject to approval.