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Equipment Finance

Equipment finance guide

Equipment finance turns hard assets into borrowing capacity. Whether you need a CNC machine, a fleet of trucks, or a surgical robot, the right structure depends on how long you need the equipment and whether you want to own it.

Capital lease

A lease that transfers ownership at the end of the term, usually via a $1 buyout option. The equipment appears on your balance sheet as an asset, and you depreciate it. Monthly payments cover the full cost of the equipment plus interest. Best for: equipment you intend to keep long-term — CNC machines, production lines, permanent fleet vehicles.

Typical terms: 2–7 years, 10–20% residual (or $1 buyout), fixed rates typically 5–12%
Common industries: Manufacturing, construction, transportation, energy

Operating lease

A true rental — the lessor owns the equipment and you return it at lease end. Payments are treated as an operating expense (off-balance-sheet for many companies). Lower monthly payments than a capital lease because you're only paying for use, not ownership. Best for: technology equipment that depreciates quickly (IT hardware, medical devices) or fleet vehicles that turn over every 3–5 years.

Typical terms: 1–5 years, no ownership transfer, fixed monthly payments, often includes maintenance
Common industries: Healthcare, technology, logistics, agriculture

Equipment loan

A traditional term loan secured by specific equipment. You own the equipment from day one — the lender files a UCC-1 lien. Fixed monthly payments over the useful life of the asset. Rates are lower than unsecured debt because the equipment serves as collateral. Best for: essential production equipment where ownership matters for depreciation, customization, or regulatory compliance.

Typical terms: 3–10 years, fixed or floating rates (SOFR + 3–7%), 80–100% of equipment cost
Common industries: Manufacturing, construction, energy, healthcare

Sale-leaseback

You sell equipment you already own to a lender and lease it back. Frees up cash tied up in owned assets while maintaining operational use. The lender becomes the owner; you become the lessee with fixed payments. Best for: companies with significant owned equipment that need working capital — manufacturers with paid-off production lines, transportation companies with clear-title fleets.

Typical terms: Proceeds based on appraised value (50–85%), lease terms 3–10 years, often used when bank debt is maxed out
Common industries: Manufacturing, transportation, construction, energy

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296 of 1,557 active lenders in our dataset list Equipment Finance as a deal type. Filter by check size, sector, and geography to find the right fit.

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