What kinds of equipment can be financed?
Almost any business equipment with a clear value and useful life can be financed, new or used. That includes work trucks and vans, construction machinery, manufacturing and CNC equipment, restaurant-grade appliances, medical and diagnostic devices, farm implements, shop lifts and computer systems. Funders look closely at the age, type and resale value of the equipment.
- A manufacturer adds a second CNC machine to take on a larger order.
- An auto shop installs a new lift and alignment system.
- A landscaping company adds two mowers and a trailer before spring.
- A farm replaces an aging tractor ahead of planting.
See how this plays out in manufacturing, auto services and agriculture.
How does equipment financing work?
You choose the equipment and get a quote from the seller, a funder reviews the business and the asset, and then pays the seller directly. You make fixed payments over the term, commonly a few years, and the funder holds a lien on the equipment until the balance is repaid. A down payment may be requested.
Because the equipment secures the deal, terms are often longer and payments lower than unsecured working capital. The flip side is that if payments stop, the funder can recover the equipment. Match the term to the asset: a laptop and an excavator should not have the same repayment schedule.
Should you lease or finance?
Financing, where you own the equipment at the end, fits assets you will use for many years. Leasing fits equipment that becomes outdated quickly or that you want to upgrade on a schedule. Leases can have lower payments but may cost more over time, and end-of-lease terms vary widely, so read them before signing.
Some leases include a purchase option at the end of the lease; others require you to return the equipment. Our guide to equipment lease vs. equipment loan compares cost, ownership and flexibility. Tax treatment differs between the two, so ask your tax professional which fits your situation.
What does equipment financing cost?
Cost depends on your business's financial profile, the equipment's age and resale value, the term and any down payment. Secured equipment financing is often less expensive than unsecured short-term funding, but older or specialized equipment can carry higher pricing. Always compare the total repaid, not only the monthly payment.
Watch for documentation fees, required insurance and any charge for repaying early. A lower monthly payment spread over a longer term can cost more in total. If you need cash for installation, training or materials alongside the purchase, ask whether those soft costs can be included or whether working capital should cover them separately.
When is equipment financing the wrong choice?
It is a poor fit when the equipment will not produce revenue or savings soon enough to cover the payment, when you only need it for a short project, or when a cheaper rental would do. It also adds risk if the payment only works in your busiest months. Run the numbers on a slow month first.
If you operate in several states, confirm where the equipment will be based. Lien filings are generally made in the state where the business is organized, and some states require written cost disclosures for commercial financing. Our UCC lien explainer covers the basics.
What you’ll typically need
- Equipment quote or invoice from the seller
- Recent business bank statements
- Owner ID and basic business details
- For larger purchases, financial statements or tax returns
Frequently asked questions
Can I finance used equipment?
Often, yes. Many funders finance used equipment, though they look closely at its age, condition, hours and resale value. Older equipment may come with shorter terms or a larger down payment. A detailed quote with the serial number and specifications helps the review move faster.
Do I need a down payment?
Some deals require one and some do not. It depends on the equipment type, your business's financial profile and the funder. Requirements vary by product and funder; many look at time in business, monthly revenue and credit. A down payment can lower the payment and total cost, so compare both versions if you have a choice.
Can I buy equipment from a private seller?
Some funders allow private-party purchases, but they usually need more documentation, such as proof of ownership, an inspection or photos, and a bill of sale. Dealer purchases are generally simpler. Ask before you commit to a private sale so you know what the funder will require.
What happens if I want to sell the equipment early?
Because the funder typically holds a lien, the balance usually has to be settled before the title transfers cleanly to a buyer. Ask how early repayment is calculated and whether any fee applies. Get the answer in writing before you sign the agreement.
Get the equipment working for you
Share your equipment quote and funders will review financing options.
Updated September 14, 2026 · 50 States Funding Team