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.
What do you need to qualify for equipment financing?
Equipment financing is usually one of the more accessible business loans to qualify for, because the equipment itself secures the funding. That changes what a funding partner weighs. The equipment matters as much as the balance sheet: what it is, what it is worth, how easily it could be resold, and how directly it produces revenue for the business buying it.
In practice, most equipment funding partners will want to see the same core file every business lender asks for. That means time in business and a real operating history, recent business bank statements showing how cash actually moves through the company, and a quote or invoice from the equipment vendor. Personal credit is typically reviewed, and it matters more on smaller transactions than on larger ones, but a soft credit profile is far less disqualifying here than it would be on unsecured working capital, because the asset is doing part of the work.
What no one can tell you before documents are reviewed is what you will be approved for, or at what cost. Anyone who quotes you a rate before seeing a bank statement is guessing. What we can tell you early is whether the deal shape is fundable at all, which is usually the question actually worth answering first. See business loan requirements for the general version of this file.
Is equipment leasing different from an equipment loan?
Yes, and the difference is ownership. With an equipment loan, the business is the owner from day one, the equipment is pledged as collateral, and the balance is paid down over the term. With equipment leasing, the funding partner owns the equipment and the business pays to use it, usually with a purchase option at the end (often a dollar buyout or a fair-market-value buyout, depending on how the lease is written).
Neither one is better in the abstract. An equipment loan tends to fit when the asset has a long useful life, the business intends to keep it well past the term, and building equity in it is worth something. Equipment leasing tends to fit when the asset turns over quickly, when technology obsolescence is a real risk, or when preserving cash and keeping the monthly obligation low matters more than owning the machine outright at the end.
There are also accounting and tax consequences that differ between the two structures, and they can be significant. Those are questions for your CPA, not for a financing broker, and we will say so rather than pretend otherwise.
Can you finance manufacturing, construction, medical, or restaurant equipment?
Yes. These four are the categories we see most, and each behaves a little differently in underwriting.
Manufacturing equipment. CNC machines, presses, conveyors, packaging lines, and similar production assets. These usually finance well because they are durable, have a real resale market, and tie directly to output. Manufacturing is one of the industries we work in most; see manufacturing business financing for how the wider capital stack tends to come together there.
Construction equipment. Excavators, loaders, lifts, and trucks. Titled and heavily traded, which funding partners generally like. Seasonality and contract timing usually matter more to structuring here than the asset does. If the pressure is a specific job rather than the machine, financing to fulfill a large contract may be the better read.
Medical equipment. Imaging, dental chairs, lab and diagnostic systems. Long useful lives and predictable revenue attached, which tends to support longer terms.
Restaurant equipment. Kitchen lines, refrigeration, POS systems, and build-out fixtures. Resale values are weaker and turnover is higher, so structures are usually shorter and the operating history of the business carries more weight.
Other equipment types are financeable too. Those four are simply where the volume is.
Can a business refinance or borrow against equipment it already owns?
Often, yes. If your business already owns equipment outright, that equipment is an asset you may be able to borrow against rather than a sunk cost. Two structures come up.
A sale leaseback means selling the owned equipment to a funding partner and leasing it back, which converts equity in the machine into working capital while the equipment never leaves your floor. An equipment refinance means placing new financing against equipment you own free and clear, or replacing existing equipment financing with a different structure.
Both are worth a look when the equipment is valuable, the business needs liquidity, and the alternative on the table is more expensive short-term capital. Both are also worth declining when the equipment is nearly depreciated or when the underlying problem is a revenue problem that more debt will not solve. If the wider question is how much your assets can support, asset-based financing covers the broader version, and receivables financing covers the version where the asset is unpaid invoices rather than machines.
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: August 2026