Equipment financing, explained plainly.
Equipment financing pays for the machine, vehicle or tool your business needs, and the equipment itself usually serves as collateral. It is often easier to qualify for than an unsecured loan, because the lender has the asset behind it.
Full Port Financial is not a lender. Financing is provided by third-party funding partners.
What equipment financing is
An equipment lender pays the seller for the equipment, and you repay the lender over a set term. Because the equipment secures the financing, lenders often focus as much on the equipment's value and useful life as on your business's history. That can help newer businesses and owners still building credit.
Leasing is a close cousin. With a lease you pay to use the equipment for a period and may have the option to buy it at the end. Financing builds ownership from day one; leasing can keep payments lower and make upgrades easier. Full Port Financial is not a lender; we help you understand the difference and connect you with funding partners.
Often used for
- Kitchen equipment, coolers and ovens
- Trucks, trailers and work vehicles
- Construction and landscaping machinery
- Medical, dental and imaging equipment
- Salon chairs, stations and fixtures
- Shop tools, lifts and diagnostic gear
The terms that matter
The equipment secures the financing. If payments stop, the lender can take it back.
Fixed payments over a term that is usually tied to the equipment's useful life.
Some lenders finance the full price; others ask for a down payment. It depends on the file and the equipment.
Both can be financed. Older used equipment may carry shorter terms.
What funding partners usually look at
Every funding partner sets its own requirements. These are the factors that come up most often.
- A quote or invoice from the equipment seller
- The equipment's age, condition and resale value
- Time in business and monthly revenue
- Personal and business credit history
- How the equipment will earn or save money for the business
- Industry experience, especially for specialized equipment
What to have ready
You don't need these to make the first call. Having them ready later speeds things up.
- Three to four recent months of business bank statements
- A government-issued photo ID for each owner
- A voided business check or bank letter
- Basic business details: legal name, entity type, EIN and start date
- A quote or invoice from the seller, with the equipment's make, model and year
Understanding what it really costs
Equipment financing cost includes the rate, any documentation or origination fees and, for leases, the end-of-term purchase price. Ask whether the offer is a loan or a lease, and what happens at the end of the term.
Compare the total you will pay over the term with the equipment's expected useful life. Financing equipment for longer than it will last means you may still be paying after it is replaced.
From first call to funded in three steps.
Tell us about your business
Your industry, your revenue and what the money is for. A few minutes on the phone with a funding advisor.
Compare your options
See options from funding partners that fit your profile, side by side, with your advisor walking you through them.
Get funded
Choose the offer that works for you, sign with the funding partner, and receive your funds.
Questions, answered.
Is equipment financing easier to get than a regular business loan?
Often, because the equipment secures the financing. Lenders weigh the equipment's value alongside your business's history and credit, which can help newer businesses. Approval still depends on the lender's review.
Should I finance or lease equipment?
Financing builds ownership and suits equipment you will use for years. Leasing can lower payments and make it easier to upgrade equipment that goes out of date quickly. Your advisor can compare both for your situation.
Can I finance used equipment?
Yes. Many lenders finance used equipment, though older equipment may qualify for shorter terms. The seller's quote with the make, model and year helps a lender review it.
Will checking my options affect my credit?
Talking with Full Port Financial does not affect your credit, because we do not pull credit reports. A funding partner may review your credit later as part of its own review, with your permission.
What happens if I stop making payments?
Because the equipment secures the financing, the lender can repossess it under the terms of your agreement, and you may still owe a balance. Only finance what your cash flow can carry.
Does Full Port Financial charge a fee?
No. Full Port Financial does not charge applicants a fee to apply or to talk with an advisor. When a funding partner funds a business we introduced, the partner may pay us a commission.
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Your money is one call away.
Tell us about your business and what the money is for. An advisor will walk you through the options that may fit, with no pressure and no obligation.