Preserve cash at purchase
Financing can spread an eligible asset’s cost over time, leaving more of your existing cash available for payroll, materials, and operating reserves.
05 / Capability
Equipment Financing
Finance the assets that move your business forward.
Explore financing for machinery, vehicles, technology, and other eligible equipment while planning for the cash your operations still need.
- Structure
- Equipment loan or eligible lease
- Common use
- Acquiring productive assets
- Review focus
- Equipment value and cash flow
Understand the structure
How equipment financing work.
Equipment financing helps a business acquire an eligible asset without paying its entire purchase price from operating cash at the outset. With an equipment loan, the business generally purchases the asset and repays the financing over time. The equipment commonly serves as collateral.
A lease can provide use of equipment under a different ownership and payment arrangement. End-of-term options may include returning, renewing, or purchasing the asset, depending on the contract. ForgePath helps you compare available structures in light of how long you expect to use the equipment and how it will support revenue.
Potential benefits
Why businesses explore this path.
Add capacity
The right equipment may help fulfill larger orders, expand service capabilities, or remove a production bottleneck. Financing should support a credible operating plan.
Replace equipment more deliberately
A planned financing arrangement may help address aging assets before a breakdown creates a larger interruption.
Compare ownership and usage options
A loan and a lease may offer different tradeoffs in upfront cash, asset ownership, flexibility, and end-of-term obligations.
A typical process
From first review to a funding decision.
- 01
Identify the asset and vendor
Obtain a quote with the equipment specifications, age, condition, and delivery or installation details.
- 02
Review the financing structure
Compare the required contribution, loan or lease term, fees, collateral, and end-of-term provisions.
- 03
Complete approval and delivery requirements
The provider may verify the vendor, inspect the asset, and require insurance or acceptance documentation.
- 04
Operate, maintain, and repay
Budget for payments along with maintenance, insurance, consumables, and other ownership or usage costs.
Common uses
What it may help support.
- Manufacturing machinery and production tools
- Commercial vehicles and eligible transportation equipment
- Medical, restaurant, or construction equipment
- Eligible computers, technology, and business systems
What providers may review
What shapes the evaluation.
- Equipment type, useful life, condition, and resale value
- Vendor details and the purchase or lease structure
- Business cash flow and existing payment obligations
- Credit history, time in business, and any required down payment
Prepare for review
Information that may help move the conversation forward.
Requirements vary by provider and transaction. An accurate, complete package helps the review begin with the right context.
- A vendor quote or purchase agreement
- Equipment specifications and serial numbers when available
- Business financial information and bank statements
- Insurance and delivery or installation details, as requested
Read before you choose
Benefits depend on the full structure.
Finance the whole project accurately
Confirm whether installation, delivery, training, taxes, or other associated costs are eligible. A quoted purchase price may not represent the full cash requirement.
Compare the term with useful life
Payments can continue even if equipment becomes obsolete, breaks down, or produces less revenue than expected. Include a maintenance and replacement plan.
Read ownership and exit terms
Review liens, guarantees, insurance requirements, early-payoff rules, and any lease buyout or return obligations. Tax treatment depends on the specific transaction and your business.
Illustration only
Look at the equipment’s full cash requirement
Illustration only: a machine’s purchase price may be only one part of the project budget.
Machine purchase$80,000
Delivery and installation$8,000
Training and initial supplies$4,000
Total project cost$92,000
A provider may finance all, some, or none of the associated costs. Confirm the cash contribution and keep operating reserves separate from the project budget.
Questions, clarified
What to understand before applying.
Can used equipment qualify?
Potentially. Eligibility depends on the equipment’s age, condition, expected useful life, value, and the provider’s requirements.
Is a down payment always required?
Requirements vary. Some structures may finance a larger share of eligible costs, while others require a contribution, deposit, or advance payments.
Will the business own the equipment?
Ownership depends on the structure. An equipment purchase financed by a loan differs from a lease, which may include separate purchase or return options.
Are tax deductions guaranteed?
No. Do not assume a particular deduction or accounting result from the financing label. Review the asset, contract, use, and applicable treatment with your tax professional.
Industry insights
Explore this solution in your industry.
Read ten practical guides covering cash flow, potential uses, costs, and tradeoffs.
Browse Equipment Financing articlesForgePath Capital Partners
A clearer path forward.
ForgePath is a business financing brokerage. It helps qualified businesses explore potential financing options through providers. Rates, fees, terms, eligibility, approval, funding speed, and availability vary.
Rates may start as low as 6% APR for qualified applicants and select financing products. Actual pricing depends on the product and the applicant. Some products use factor rates, fees, or other cost structures rather than APR. No advertised outcome is guaranteed.
Further reading
General product descriptions were reviewed against the following public educational resources. Provider terms control any actual transaction.