Equipment financing
Equipment financing covers machinery, vehicles and technology, usually secured by the equipment itself. It lets you put assets to work now and pay for them as they earn.
Key points
- Equipment financing pays for machinery, vehicles or technology, with the equipment itself as security.
- You can take a loan and own the equipment, or lease it for a set time.
- Because the equipment secures the financing, approvals can be easier than for unsecured loans.
- Ask your accountant how a loan or lease affects your taxes.
What is equipment financing?
Equipment financing is a loan or lease tied to a specific piece of equipment. The lender usually pays the seller directly, and you make regular payments. If payments stop, the lender can take the equipment back. That lower risk is why equipment financing is often easier to get than other business credit, and why it can cover up to the full price.
Loan or lease?
| Equipment loan | Equipment lease | |
|---|---|---|
| Ownership | You own it from the start | The lessor owns it during the lease |
| End of term | It’s yours, fully paid | Return it, renew, or buy it |
| Best for | Equipment you’ll use for many years | Equipment that goes out of date quickly |
| Tax treatment | You claim depreciation | Payments may be deductible |
Tax treatment depends on the lease type. Confirm with your accountant.
How NorthMerit can help
Apply once and we’ll connect you with one financing partner who works with businesses like yours. It’s free, and there’s no obligation.
What you can finance
Almost anything with a resale value: construction and farm machinery, trucks and trailers, manufacturing lines, restaurant kitchens, medical and dental equipment, and technology. New and used equipment both qualify, from dealers or private sellers, though older used equipment may come with shorter terms.
An example
A contractor finances a $180,000 excavator over five years at 8.5%. The excavator secures the loan, so the contractor’s line of credit stays free for payroll and materials.
| Amount | |
|---|---|
| Equipment price | $180,000 |
| Term | 60 months |
| Monthly payment | About $3,690 |
What lenders look at
The equipment matters as much as the business. Lenders look at its type, age and resale value, along with your cash flow, credit and time in business. A quote or invoice from the seller is usually the first thing they’ll ask for.
Common questions
Should I lease or finance?
Can I finance used equipment?
Industries that use it.
Construction and trades
Contractors carry equipment costs and wait on progress payments. Financing that matches project timing keeps crews working.
Learn moreTransportation and logistics
Carriers and logistics firms run on trucks, fuel and receivables that pay in 30 to 90 days.
Learn moreManufacturing
Manufacturers balance machinery, inventory and customer terms. Financing can match each to the right structure.
Learn moreRestaurants and hospitality
Restaurants and hotels invest in fit-outs and equipment and manage seasonal traffic.
Learn moreHealth care and clinics
Clinics and practices finance specialized equipment, fit-outs and practice acquisitions.
Learn moreAgriculture
Farms and agribusinesses finance equipment and manage revenue that arrives at harvest.
Learn moreThe right financing, from the right partner.
Apply once. One financing partner who knows businesses like yours. Free, with no obligation.
