Equipment financing

Equipment financing pays for machinery, vehicles, technology, or other business gear, and the purchased item serves as collateral. Because the lender can repossess the equipment if you default, this financing is often easier to qualify for than an unsecured loan, and it can frequently cover most or all of the purchase price. You repay in fixed installments over a term usually tied to the useful life of the asset, often two to seven years. Some deals are structured as loans where you own the equipment outright, and others as leases where you use it and may buy it later.

This works well when you need a specific, durable asset that earns or saves money over time, such as a commercial oven, a delivery truck, or a server rack. The asset backed structure tends to mean lower rates than unsecured options, and the predictable payment helps with budgeting. Cost depends on your credit, the equipment type, and how easily the item could be resold. Be aware that financing ties you to the asset, so for equipment that becomes obsolete quickly, a lease may protect you better than a loan.