How Equipment Financing Works for Small Businesses
Equipment financing allows small businesses to acquire the machinery, vehicles, technology, or tools they need without paying the full cost upfront. Instead of draining cash reserves, businesses can spread the cost over time while putting the equipment to work immediately.
Types of Equipment Financing
- Equipment loans: Borrow a lump sum to purchase equipment outright. The equipment itself often serves as collateral.
- Equipment leasing: Lease equipment for a set period with the option to purchase at the end of the term.
- SBA equipment loans: Use an SBA 7(a) or 504 loan to finance larger equipment purchases at competitive rates.
Common Requirements
Qualifying for equipment financing typically involves:
- Minimum credit score of 600-650 (varies by lender)
- At least 1-2 years in business
- Annual revenue sufficient to cover payments
- Equipment quote or invoice from the vendor
- Business financial statements
Benefits of Equipment Financing
Equipment financing preserves working capital, may offer tax advantages through depreciation deductions, and helps businesses stay competitive by accessing the latest technology. Many lenders offer fast approvals and funding within days.
Get Started
FAAS Funding connects business owners with equipment financing solutions tailored to their needs. Complete a quick eligibility review to explore your options.
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