Equipment Financing

Business Equipment Financing: The Right Tool to Help Your Business Grow

Anything you need to run your business is essential to your success — from commercial ovens, tractors and construction vehicles to computers, desks and office supplies.

So when a critical piece of equipment fails, becomes outdated or you simply need more resources to support your growing team, the costs can add up — and quickly.

Through business equipment financing, you can secure the tools you need without depleting your cash reserves.

How Equipment Financing Works

Business equipment financing works by allowing you to buy or lease the equipment you need to scale your operations and grow. With a commercial equipment loan, you’re able to finance the purchase of a piece of machinery, furniture, vehicle or other resource for your business. 

Receive Up to 100% of the Equipment’s Value

You can receive up to 100% of the equipment’s value through business equipment financing. For risky investments, such as items with a high rate of depreciation, lenders may require a 10- to 20-percent down payment.

The amount of funding you receive is determined by what your business qualifies for, as well as the price of the equipment you’re planning to purchase.

With most equipment financing programs, the equipment itself secures the funds. As a result, it’s easier to get equipment loans or leases even if you have bad credit.

Flexible Rates and Terms

Typical equipment financing rates start around 8% with terms that can range from 1-5 years. The length of your agreement will depend largely on the useful life of the item financed. 

For instance, you can expect a longer term on a commercial equipment loan or lease if you’re financing a truck or piece of construction equipment versus computer equipment that will become obsolete within a few years.

Payments are made monthly or weekly, depending on the specifics of your agreement.

Is Equipment Financing Right for Your Business?

Equipment financing is right for businesses that have an opportunity to grow through the acquisition of a certain resource or tool.  

But the question remains: Should you lease or buy your business equipment? The route you choose will determine how you finance the purchase.

Business equipment loans are used to procure equipment you desire to own. This makes sense when you require materials you plan to use for 3 years or more. Durable machines like cash registers, refrigerators or commercial manufacturing tools are great examples of items worthy of an equipment loan.

You should consider leasing business equipment if the item you plan to finance will become outdated quickly, or you’re not in a position to provide a down payment.

Loan vs. Lease: How to Know Which Equipment Financing Program Is Right for You

When deciding if new business equipment should be purchased or leased, consider the following:

How to Get Equipment Financing

Based on previously approved borrowers, you’re likely to get equipment financing if:

• You’ve been in business 2 years or more
• Your annual revenue is $160K or more
• You have a credit score of 620 or better

Generally, there are less strict qualification requirements for equipment financing than you’d find with unsecured loans. As a result, equipment financing may be an option if you’re a business owner with less than perfect credit. 

But you must meet certain requirements specific to your time in business, annual revenue and personal credit score.

For example, a construction company’s applying to get equipment financing for a new bulldozer. The company will likely qualify because it’s been in business for more than 2 years and has an annual revenue just under $200K. And as long as the owner of the construction business has a credit score above 600, qualifying for an equipment loan should be very straightforward.

How to Apply for Equipment Financing

To apply for equipment financing with Fast Capital 360, just tell us about yourself, your business and your funding needs. Then connect your bank account through our secured connection (or provide 4 months of bank statements). 

Whether you’re financing an expensive piece of equipment that falls outside of your price range or the majority of your capital is invested elsewhere, a business equipment loan is an invaluable tool. Let us connect you with some of the best equipment financing companies to find the right funding option for you. 

What Will an Equipment Business Loan Cost?

To give you a better idea of what equipment financing might cost, let’s use an example. In this scenario, your company is looking for restaurant equipment financing to buy a new oven.

The oven you want to purchase is $10,000. Your equipment finance lender is willing to offer 100% of the equipment value at a 15% equipment financing rate.

If you’re paying this amount monthly over 3 years, you’ll make 36 payments of $347. By the end of your loan, you’ll have paid an additional $2,480.

While equipment financing interest rates vary from lender to lender, this example gives you an idea of interest costs and monthly payments. You can also use our loan calculator to crunch the numbers specific to your financing needs and get an estimate of repayment terms.

How Will Your Business Use Equipment Financing?

Use your equipment financing for machinery or technology specific to your industry. Our partners have provided equipment financing to a diverse group of businesses including professional DJs, construction companies, gyms, restaurants and farms.

Here are just a few examples of how you can run and grow your business with equipment financing split into two categories.

Heavy Equipment Financing

Commercial Equipment Financing