Equipment Financing
Equipment financing is a loan or lease used to acquire business equipment, where the equipment itself usually serves as the collateral, so you can put it to work now and pay for it over time as it earns. Because the equipment secures the funding, this is often one of the more accessible ways for a growing business to get the machinery, vehicles, or technology it needs without draining cash reserves. Custom Capital Advisors is a financing brokerage, so we do not issue the loan or lease ourselves. We help you decide whether to buy or lease, connect you with the right lender, and make sure the structure fits how the equipment will actually earn.
What is equipment financing?
Equipment financing covers the purchase or lease of the physical assets a business runs on: production machinery, commercial vehicles, medical or dental equipment, kitchen and restaurant systems, construction gear, computers, and more. The defining feature is that the equipment usually acts as its own collateral, which can make approval more accessible than unsecured borrowing and can keep your other assets and cash free. It is a way to match the cost of a long-lived asset to the years it will be generating value for you.
How does equipment financing work?
There are two common structures, and the right one depends on how long you will use the equipment and whether you want to own it. With an equipment loan, you borrow to buy the equipment, own it from day one, and repay over a fixed term, after which it is yours free and clear. With an equipment lease, you pay to use the equipment for a set period, often with an option to buy it, return it, or upgrade at the end. Loans tend to fit equipment you will keep for years; leases tend to fit equipment that ages quickly or that you want the flexibility to replace.
What can equipment financing be used for?
Almost any income-producing business equipment can qualify. Common uses include manufacturing and production machinery, commercial trucks and fleet vehicles for freight and transportation, medical and dental equipment for healthcare practices, commercial kitchen and refrigeration systems for restaurants, construction and heavy equipment, and technology or software infrastructure. If the asset earns revenue and has a resale value, it can usually be financed.
How much can you finance, and what does it cost?
Equipment financing often covers most or all of an asset's purchase price, and because the equipment secures the funding, the amount is tied closely to the value of what you are buying. The term is usually set to match the useful life of the equipment, so you are not still paying for a machine long after it has stopped earning. Cost depends on the equipment, the structure (loan or lease), the term, and your business profile. We present amounts, terms, and rates as ranges and typical cases, never as a promise, because the real numbers come from the lender once your file and the equipment are reviewed.
How fast can equipment financing fund?
Equipment financing is often quicker than many other loan types because the equipment provides clear collateral, which simplifies the lender's decision. With a complete file and a straightforward asset, funding can often move in as little as a few business days. Larger or more specialized equipment can take longer. We help you assemble a clean file, including the vendor quote and equipment details, so timing works in your favor.
Equipment loan vs lease vs your other options
The first real decision is usually loan versus lease, and beyond that, whether equipment-specific financing is even the best route. Here is how the common options compare.
| Option | Best for | Who owns it | Payment structure | Cost consideration |
|---|---|---|---|---|
| Equipment loan | Equipment you will keep for years | You own it from day one | Fixed payments over a set term | Interest over the term; you build equity in the asset |
| Equipment lease | Fast-aging equipment you may want to upgrade | The lessor, until any buyout | Set payments to use it, with end-of-term options | Often lower upfront cost; you may not own it at the end |
| Asset-based lending | Borrowing against equipment you already own | You keep ownership | Ongoing facility against asset value | Interest plus facility fees |
| Business term loan | Mixed needs beyond a single asset | You own what you buy | Fixed schedule over months to years | Interest over the term; more flexible use of funds |
If you will use the equipment for years and want to own it, a loan usually wins. If the equipment ages fast or you want the option to upgrade, a lease can make sense. If you already own equipment and need working capital, asset-based lending borrows against it instead. Our job is to find the right fit, even when that means the answer is not a new equipment loan at all.
When equipment financing is the wrong fit
We will say this plainly. Equipment financing is the wrong tool when the cash you need is not actually for an asset, when the equipment will not earn enough to cover its own payments, or when a short-term working-capital need would be better served by a line of credit or by factoring your invoices. Stretching an equipment loan to cover unrelated expenses ties a long-term payment to something that will not pay it back. If that is the situation, the honest move is to talk through the real need first, and that is the conversation we would rather have.
Common Questions
Ready to talk it through?
If you are weighing a piece of equipment, let's make sure the structure and the term fit how it will earn before you commit. No pressure, no promises about rates or approval, just a straight read on buy versus lease and the right way to fund it. Start a conversation or learn how our capital consulting works.
Last updated: July 2026