Equipment financing: the full guide

Three structures

• Equipment loan — you own the equipment from day 1; equipment is collateral. 5-10% down typical. Rates 7-25% APR.
• Equipment lease — you don't own; lower monthly payments; option to buy at end. Best for fast-depreciating equipment.
• SBA 504 — for $250k+ equipment + real estate combined. Best rates (5-7%) but 60-90 day timeline.

What qualifies

• Vehicles, trucks, construction equipment
• Manufacturing machinery
• Restaurant equipment
• Medical equipment
• Software is rarely financed via equipment loans — use a term loan or operating lease instead

The Section 179 tax angle

Section 179 lets you fully deduct up to $1.16M of equipment in the year of purchase (2026 limit), instead of depreciating over 5-7 years. This turns a $200k equipment purchase into a $200k tax deduction in year 1.

Combined with equipment financing, you finance the equipment over 5 years but get the full deduction in year 1. The net effect for a profitable business is dramatic.

Top equipment lenders

• Crest Capital — flexible, good rates
• Balboa Capital — specialty equipment
• Currency — restaurant + service industries
• Wells Fargo + Bank of America — for larger amounts