What Is Equipment Financing?
Educational guide: loans and leases for business equipment, how it works, and how vendors and brokers participate.
Quick answer: Equipment financing is loans and leases used by businesses to acquire equipment—machinery, vehicles, technology, medical devices, and more. The equipment typically serves as collateral. Vendors and brokers can refer opportunities through referral programs. Credit requirements vary by lender.
Last updated: March 2025
Hub & Guide
Equipment Financing
Equipment financing helps businesses acquire machinery, vehicles, technology, medical devices, and other assets without paying full cash upfront. This hub covers how equipment financing works, industry-specific options, vendor participation, and how brokers and vendors can refer equipment financing opportunities.
- Loans and leases for business equipment
- Industry-specific financing (construction, trucking, medical, restaurant)
- Vendor referral programs
Table of Contents
What Is Equipment Financing?
Equipment financing is the category of loans and leases used by businesses to acquire equipment—machinery, vehicles, technology, medical devices, and other assets. The equipment typically serves as collateral, which can help some borrowers qualify when unsecured financing is not available.
Businesses use equipment financing to preserve cash flow while acquiring the assets they need to operate. Instead of paying full cash upfront, the business makes regular payments over a term. Structures include equipment loans (ownership at closing), equipment leases (use for a period, with or without ownership transfer), and vendor programs offered through equipment dealers.
See what is equipment financing for a detailed overview. Equipment financing is a subset of commercial finance and follows similar evaluation processes—application, underwriting, closing, and funding.
Equipment Loans vs. Leases
Equipment loans transfer ownership to the borrower at closing. The borrower repays principal and interest over a term. The equipment serves as collateral. At the end of the term, the borrower owns the equipment outright.
Equipment leases provide use of the equipment for a period. With a capital lease, ownership may transfer at the end. With an operating lease, the lessor retains ownership. Structure affects accounting treatment and cash flow. Some businesses prefer leases for flexibility or tax reasons.
Lenders evaluate equipment type, useful life, resale value, and borrower credit. Eligibility varies by lender and program. Approval is not guaranteed.
Equipment Financing by Industry
Equipment financing programs exist across industries. Lenders may specialize in certain equipment types based on collateral value, useful life, and resale markets. Industry-specific considerations include:
- Construction equipment financing—Excavators, loaders, bulldozers, cranes. Heavy equipment with strong resale value.
- Equipment financing for trucking companies—Trucks, trailers, fleet. See also truck financing and fleet financing.
- Medical equipment financing—Diagnostic equipment, imaging, surgical devices. Healthcare practices and facilities.
- Restaurant equipment financing—Kitchen equipment, refrigeration, point-of-sale systems.
- Manufacturing equipment financing—Machinery, CNC equipment, production lines.
- Technology equipment financing—Computers, servers, software, IT infrastructure.
- Agricultural equipment financing—Tractors, harvesters, irrigation systems.
- Heavy equipment financing—General heavy machinery across industries.
- Warehouse equipment financing—Forklifts, conveyors, storage systems.
Vendor Participation in Equipment Financing
Equipment vendors often encounter buyers who need financing to complete a purchase. Vendors may offer in-house financing, partner with lenders, or refer buyers to external financing partners. When a vendor cannot approve a buyer through their standard program—due to credit, structure, or exposure—they may refer the deal to a financing partner with broader criteria.
With a signed referral agreement, vendors can receive revenue share when referred deals close. See can vendors get paid for referring financing, financing for equipment vendors, and equipment vendor financing partners. The blog post equipment financing vs. in-house vendor programs explains when vendors should look outside their standard programs.
Credit and Qualification
Credit requirements vary by lender and program. Some equipment financing programs consider borrowers with lower credit scores when the equipment collateral is strong. Time in business, revenue, and deal structure also matter. Equipment-backed structures may create additional possibilities for borrowers who do not qualify for unsecured financing.
See 500 credit score business loans and financing for businesses with low credit for options when credit is a factor. Each deal is evaluated on its merits; approval is not guaranteed.
Articles and Guides
Deeper guides and resources. Each link includes a brief summary.
Construction Equipment Financing
Financing for excavators, loaders, bulldozers, cranes, and other construction equipment.
Equipment Financing for Trucking Companies
Trucking industry equipment: trucks, trailers, fleet. Industry-specific considerations.
Medical Equipment Financing
Financing for diagnostic equipment, imaging, surgical devices. Healthcare practices.
Restaurant Equipment Financing
Kitchen equipment, refrigeration, point-of-sale systems for restaurants.
Manufacturing Equipment Financing
Machinery, CNC equipment, production lines for manufacturers.
Heavy Equipment Financing
General heavy machinery across industries. Strong collateral considerations.
Technology Equipment Financing
Computers, servers, software, IT infrastructure.
Agricultural Equipment Financing
Tractors, harvesters, irrigation systems for agriculture.
Warehouse Equipment Financing
Forklifts, conveyors, storage systems for warehouses.
Truck Financing for Businesses
Truck and fleet financing. Commercial vehicles.
Fleet Financing for Business
Fleet vehicles and equipment. Multi-vehicle financing.
Can Vendors Get Paid for Referring Financing?
Vendor referral programs. Revenue share when referred deals close.
Equipment Financing vs. In-House Vendor Programs
When does in-house financing fall short? When vendors should look outside standard programs.
FAQ
Questions about equipment financing
What is equipment financing?
Equipment financing is the category of loans and leases used by businesses to acquire equipment—machinery, vehicles, technology, medical devices, and other assets. The equipment typically serves as collateral. Structures include loans, leases, and vendor programs.
What types of equipment can be financed?
Machinery, vehicles, technology, medical equipment, construction equipment, manufacturing equipment, restaurant equipment, agricultural equipment, warehouse equipment, and other business assets. Lenders evaluate the equipment type, useful life, and resale value.
How do equipment vendors participate in financing?
Vendors may offer in-house financing, partner with lenders, or refer buyers to financing partners. With a referral agreement, vendors can receive compensation when deals fund. Vendors who cannot offer financing in-house may refer to external partners.
What credit is required for equipment financing?
Credit requirements vary by lender and program. Some programs consider borrowers with lower credit scores when equipment collateral is strong. Time in business, revenue, and deal structure also matter. Each deal is evaluated on its merits; approval is not guaranteed.
What is the difference between equipment loans and equipment leases?
Equipment loans transfer ownership to the borrower at closing. The borrower repays principal and interest over a term. Leases provide use of the equipment for a period; ownership may transfer at the end (capital lease) or the lessor retains it (operating lease).
Key Takeaways
Summary
- Equipment financing includes loans and leases for business equipment—machinery, vehicles, technology, medical devices, and more.
- The equipment typically serves as collateral, which can help some borrowers qualify when unsecured financing is not available.
- Industry-specific programs exist for construction, trucking, medical, restaurant, manufacturing, and other sectors.
- Vendors can participate through in-house programs, lender partnerships, or referral programs with revenue share.
- Credit requirements vary by lender; equipment-backed structures may create possibilities for lower-credit borrowers.
Equipment vendors and brokers
Refer equipment financing opportunities
If you encounter buyers who need equipment financing and don't fit your standard program, send declined business loans for review. See our glossary for term definitions. Review the referral agreement before submitting.