Frequently asked questions

What is equipment financing?

Equipment financing is a type of loan used to purchase business-related equipment.

What equipment can I finance?

Equipment financing can help you fund a wide range of business needs, including:

• Vehicles
• Heavy Machinery
• Restaurant Appliances
• Medical Equipment
• Technology Systems

No matter your industry, financing your equipment can fuel your business’s growth. Plus, many equipment lenders report to business credit bureaus. The more you build your business credit, the better your chances of securing future loans with favorable rates and terms—without needing a personal guarantee.

Pros and cons of equipment financing

What are the pros and cons of getting a business acquisition loan? Like all forms of financing, business acquisition loans come with both advantages and potential drawbacks. Understanding these can help you make an informed decision.

Pros

• Scale Your Business: Acquire new equipment to grow your business without tying up cash.
• Spread Out Large Costs: Financing allows you to pay for equipment over time, making it easier on your budget.
• No Additional Collateral Needed: The equipment itself serves as the collateral, reducing the need for other assets.
• Tax Benefits: Depending on your location and the equipment, you may be eligible for tax deductions, such as accelerated depreciation.

Cons

• Restricted Use: Funds are typically limited to purchasing equipment and related expenses (e.g., taxes, delivery).
• Obsolescence Risk: Equipment may become outdated or need replacing, potentially impacting your business’s ability to keep up with industry advancements.

How much does equipment financing cost?

The cost of equipment financing depends on several key factors:

• Funded Amount: The total loan amount you need for your equipment purchase.
• Interest Rate: The rate at which your loan will accrue interest over time.
• Term: The length of time over which you'll repay the loan.
• Collateral: The value of the equipment you're financing, which serves as collateral for the loan. These factors can vary depending on your industry and the type of equipment. That’s why we partner with a variety of lenders who specialize in industry-specific financing, ensuring you get the best possible terms for your business.

Is it hard to get an equipment loan?

Qualifying for equipment financing is often easier than other types of business loans because the equipment itself serves as collateral. This reduces the lender’s risk, making them more likely to approve your application. As long as your business meets the basic requirements—such as having a stable revenue stream and a clean credit history—you can secure financing without the need for additional assets or guarantees.

Why is equipment financing important?

Equipment financing is crucial because it allows you to grow and scale your business without draining your cash reserves. By spreading out the cost of equipment over time, you can preserve working capital for other business needs. Additionally, because the equipment itself serves as collateral, the eligibility requirements are often easier to meet compared to other types of financing, making it a more accessible funding option for many businesses.

How long is an equipment Loan?

The length of an equipment loan typically depends on the lender and the specific financing terms. However, most equipment loans range from 1 to 10 years. Shorter terms may result in higher monthly payments but lower overall interest, while longer terms may offer more manageable monthly payments but could accrue more interest over time.

What are the requirements for equipment financing?

To qualify for equipment financing, you'll typically need to meet the following criteria:

• Annual Revenue: 30,000€ or more
• Time in Business: Varies by lender. Some may work with startups from day one, while others may require at least two years in business.
• Clean Credit History: No listings in debtor registries such as RAI or ASNEF

Don’t worry if you don’t meet all of these requirements—exact qualifications can vary depending on the lender and the type of equipment you’re financing.

Are there equipment loans for startups?

Yes, some equipment financing companies we partner with will work with startups right from day one. However, keep in mind that if your business is less than a year old, the financing company may place more stringent requirements on your personal credit score or offer lower loan amounts. Each lender has different criteria, but we can help you find the best options for your startup.