Equipment Financing for Small Business: How It Works and When to Use It

A truck, a lift, a CNC machine, an X-ray unit. Equipment is the purchase most likely to produce revenue the day it arrives, and the one most lenders are happiest to finance because the equipment itself backs the deal.

How it works

The lender pays the vendor and you repay over a fixed term, commonly two to five years. The equipment is the collateral, which is why equipment financing is available to owners whose credit would not support an unsecured loan of the same size.

What qualifies as equipment

• Vehicles: trucks, trailers, vans, service bodies
• Shop equipment: lifts, compressors, alignment racks, paint booths
• Production: CNC, fabrication, packaging and food-processing machines
• Medical and dental: imaging, chairs, lasers, sterilization
• Technology: POS systems, servers, specialized software bundled with hardware

New vs used

Both are financeable. Used equipment typically carries slightly shorter terms. A clear invoice or bill of sale from an identifiable vendor is what matters.

Equipment financing vs working capital

Equipment financing fits a specific purchase with a multi-year payback. Working capital fits when you want to buy outright at a cash discount, when the item is small relative to revenue, or when you need money for the equipment and the people to run it. Affirmative Funding offers both and will show which costs less for your situation.

What you need to apply

Three months of business bank statements, a quote or invoice for the equipment, and the standard owner details. Businesses with $20,000+ in monthly revenue and six months of history qualify.