Equipment Financing 101: Grow Without Draining Cash Reserves

New equipment can be the difference between turning down work and taking it on — but paying for it outright can tie up cash you need for payroll, materials, or simply staying flexible. That’s where equipment financing comes in.

How it works

Equipment financing lets you purchase or lease equipment while spreading the cost over time through structured payments, rather than paying the full price upfront. In many cases, the equipment itself serves as collateral, which can make this type of financing more accessible than an unsecured option.

What it’s typically used for

• Machinery or manufacturing equipment
• Commercial vehicles
• Technology or point-of-sale systems
• Medical or diagnostic equipment
• Replacing aging or worn equipment before it becomes a bigger problem

New vs. used equipment

Many equipment financing programs cover both new and used equipment, though terms can vary based on the age and condition of what you’re financing. If you’re eyeing a used piece of equipment, it’s worth confirming this upfront with your funding specialist.

How it compares to a general term loan

A term loan gives you a lump sum for any purpose; equipment financing is tied specifically to an equipment purchase and often uses that equipment as collateral. That connection can make equipment financing more accessible — and sometimes more competitively priced — than a general-purpose loan for businesses that might not qualify as easily otherwise.

Getting started

If there’s a specific piece of equipment holding your business back from taking on more work, it’s worth finding out what you’d actually qualify for before assuming it’s out of reach.

Frequently asked questions

Can I finance used equipment? This depends on the specific lending program. Your funding specialist can confirm whether your matched program supports used equipment purchases.

Is a down payment required? This varies by program. Your funding specialist will explain the specific requirements once you’re matched to an equipment financing option.

See how this works for specific industries: construction, trucking, healthcare, and manufacturing.