Equipment Financing to Put New Equipment to Work

Equipment financing is business funding used to buy equipment such as machinery, commercial vehicles, trucks, medical devices, restaurant systems or technology—best when you want to put revenue-producing equipment to work while keeping cash on hand. The equipment commonly serves as primary collateral, and you make scheduled payments under an equipment loan, lease or equipment finance agreement.

Credit requirements vary widely. Competitive conventional programs often favor personal credit around 650 or higher, while some specialized equipment programs may consider scores in the mid-500s to low-600s when business cash flow, equipment value or the down payment offsets risk. Stronger credit generally supports better pricing and lower cash requirements.

Many competitive equipment financing programs favor at least one to two years in business, although some programs consider companies operating for six months. Newer businesses may need stronger owner credit, industry experience, additional documentation or a larger down payment.

Not always. Some qualified transactions may finance the full eligible equipment cost, while other programs require approximately 10% to 20% down or more. Credit profile, time in business, cash flow, equipment type, age, condition, resale value and requested amount all affect the required contribution.

Yes, many programs finance both new and used business equipment. Used equipment is evaluated based on age, condition, mileage or operating hours, useful life, title, serial number, vendor quality and current market value. Older or highly specialized assets and private-party purchases may require an appraisal, inspection, more verification or a larger down payment.

With an equipment loan, you generally own the equipment, subject to the lien, and the lien is released once it’s paid off—best for equipment that stays productive for years. An equipment finance agreement (EFA) also leads to ownership but builds the finance charge into a fixed payment stream. With a lease, the financing company owns the equipment during the term; payments reflect the term, residual value and purchase option, and at the end you may buy, renew, upgrade or return it—often best for equipment you’ll replace or upgrade. Review accounting, depreciation and tax treatment with a qualified tax professional; Alta Business Loans does not provide tax, legal or accounting advice.

Pricing is set through underwriting based on your business, the equipment and the deal. Loans may quote an interest rate, while EFAs and leases may show a fixed payment stream, so compare total scheduled payments. Match the term to the equipment’s useful life, confirm the cash due at closing and any lease residual or buyout amount, and review documentation, filing, inspection, appraisal, delivery, late, termination and prepayment provisions, including whether early payoff reduces total finance charges.

Often, yes. Some structures can include eligible soft costs tied to the purchase, such as delivery, installation, training or software. How much can be included and how it’s treated varies by program.

Common documents include a completed application, government-issued owner ID, business formation details, a vendor quote or invoice listing the equipment’s year, make, model and serial number, recent business bank statements, a current debt schedule and proof of insurance naming the secured party before funding. Larger requests may also require tax returns, financial statements, title documents, appraisals or inspections. Agreements may include a UCC filing, equipment lien and personal guarantee.

Straightforward transactions with complete documentation may close within a few business days after approval. Larger, titled, specialized, older or private-party equipment transactions may take longer because of appraisals, inspections, title work, insurance, vendor verification or additional underwriting.

No. Alta Business Loans does not perform a hard credit pull for its initial pre-qualification review. A financing company may request authorization for a credit inquiry later in underwriting before issuing final terms.

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