Equipment financing

Equipment Financing

Equipment for virtually any industry.

Loan amount: Up to $250K
Term: 1–5 years
Cost: As low as 8%
Repayment: Monthly

Equipment financing

What it is, plainly

Equipment financing covers the cost of buying or leasing what your business runs on. Most owners hear the phrase and picture tractors and backhoes — construction equipment is certainly financeable, but so are refrigerators, vehicles, medical devices, ovens, servers and computers.

Exact qualifications vary by lender and by the equipment itself. If you do not meet all of them — a credit score under 650, say — solid cash flow can still make the case.

The terms, in plain words

The words to read on an equipment financing offer

Interest rate

The price of borrowing, stated as a yearly percentage of what you still owe. As the balance comes down, so does the interest.

AskIs this the APR, and are the fees counted in it?

Total payback

Every dollar you will hand over, from the first payment to the last: the amount, the cost and every fee. It is the one number that makes two different offers comparable.

AskWhat is the total, with every fee included?

Term

How long you have to repay. A longer term usually means a smaller payment and a larger total. A shorter term is the reverse.

AskWhat does the total come to on a shorter term, and on a longer one?

Origination fee

A charge for setting the financing up, often a percentage of the amount. It is frequently taken out before the money reaches you, so what lands in the account is less than the headline.

AskIs it deducted from what I receive, and is it in the total payback?

These are general meanings. The agreement you are offered is what governs, so read its own definitions before you sign. All six terms.

What it gives you