Equipment financing and leasing with the asset as collateral
Buy or lease vehicles, machinery and technology with the equipment as the collateral.
Financing is provided by third-party lenders. Capital Ally is not a lender. Terms and eligibility vary.
At a glance
- Typical amount
- $10K to $5M
- Typical term
- 2 to 7 years
Ranges are typical for this type of financing. Your amount, term and pricing depend on the lender and your business profile.
How this financing works
Equipment financing uses the equipment you are buying as the collateral, which is why approval is easier and rates are lower than an unsecured loan of the same size. Terms track the useful life of the asset, so a truck, a CNC machine or a dental chair is paid off over the years it produces revenue.
Both loans and leases are available. A loan builds equity and ends in ownership. A lease keeps payments lower and lets you upgrade at the end of the term. Lenders finance construction, transportation, medical, manufacturing and restaurant equipment, and some cover up to the full invoice including soft costs.
Common business uses
Fleet expansion
Add trucks or vans as contracts grow, with each vehicle financed on its own schedule.
Production capacity
Finance the machine that lets you take the larger order.
Technology refresh
Lease equipment that dates quickly so you can upgrade rather than own something obsolete.
What lenders typically look for
General guidelines for this type of financing. Each lender sets its own requirements, and meeting them does not guarantee an offer.
- A vendor quote or invoice for the equipment
- Twelve or more months in business for most lenders, with startup programs available
- Owner credit around 600 or better
- Down payment of 0 to 20 percent depending on the file
Compare with other options
Equipment financing vs
Term loans
Equipment financing is usually cheaper for a specific asset because the asset secures it. A term loan is more flexible about what the money buys.
Equipment financing vs
SBA loans
SBA can go longer on heavy equipment but asks for more documentation. Equipment financing is secured by the asset itself.
Questions about equipment financing
All questionsLoan or lease?
A loan ends in ownership and suits equipment with a long life. A lease has lower payments and suits equipment you will replace in a few years.
Can I finance used equipment?
Yes. Most lenders finance used equipment with a limit on age and hours, and titled assets like vehicles are the simplest.
Is a down payment required?
It depends on the file. Strong credit and history can qualify for 100 percent financing; newer businesses typically put down 10 to 20 percent.
Capital Ally
Considering equipment financing?
Check eligibility in a few minutes, then compare the offers you receive by their full cost before you decide. Checking does not affect your credit score.