Quick Answer
Equipment financing structures borrowing around the useful life of the equipment being financed - with the equipment itself often serving as collateral.
Key Takeaways
- Term matches useful life of the equipment.
- Equipment typically secures the loan.
- Approval often emphasizes the asset rather than credit alone.
Loans vs. Leases
Equipment loans build ownership; equipment leases keep the equipment off the balance sheet and may simplify upgrading at end of term.
Frequently Asked Questions
Is equipment financing easier to qualify for than a line of credit?
Often yes - the equipment serves as collateral, which can offset weaker credit profiles compared to unsecured options.