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Business equipment financing and equipment leasing

Business equipment financing and equipment leasing

The smart way to get the equipment you need.

How it works

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Available Capital

$20,000 to $2 million

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Time to Fund

2 to 4 weeks

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Term Length

2 to 5 years

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Interest Rates

6% and up

Amerifi helps small business owners like you

with equipment financing options, equipment leasing, and other funding options to help you get the equipment and machinery your business needs to grow and thrive.

Working in the real world requires the right tools.

A company that builds things, whether those things are retail products or shopping malls, needs a wide range of specialized tools to get the job done.

Companies that build things in bits and bytes will eventually need some form of equipment as well, whether that’s servers and routers to keep everyone connected or new office furniture and hardware for an expanding workforce.

A lot of critical equipment you’ll need for your business will cost too much to put on your credit card. Credit card interest rates also tend to be far higher than the types of financing tailored for small businesses in need of equipment.

There are two primary options when it comes to using a lender to obtain business equipment.

Equipment financing is a popular form of funding that results in your business owning its equipment outright at the end of the loan term.

It’s much the same as an auto loan, and it can also be called an equipment loan. It’s a targeted type of term loan that helps businesses establish their infrastructure more quickly and completely than might be possible with cash on hand.

Businesses that need costly equipment to hit the ground running often turn to equipment financing when current cash flows can’t support an outright purchase. With financing, your business can secure the equipment that’ll help it build the cash flow it needs to cover future equipment purchases on its own.

You’ll receive a certain loan amount to acquire the equipment you need. In return, you’ll make periodic payments (these are usually monthly payments, but some equipment loans are repaid weekly) until you’ve paid off the interest and principal of the loan over a set timeline, which typically runs between two to five years.

The lender typically holds a lien on the equipment until you’ve paid off your loan, and is likely to take back the equipment if you fail to make payments. It’s just like getting a loan to buy a car, with nearly all the same contractual structures and conditions.

If your business is newer or has less of a track record, equipment financing can help establish and build your business credit history, which can be crucial to securing larger loan amounts at better terms for your business in the future.

If you've already financed the purchase of some equipment, we can help you obtain better rates in a refinancing. We also help small business owners finance the purchase of qualified used equipment.

One key difference between equipment financing and auto financing is that, depending on the purchase value of the equipment and the amount of money you have available for a down payment, you may need to pledge additional business assets as collateral to secure the loan.

Equipment leasing, on the other hand, doesn’t necessarily result in your company owning the equipment at the end of its lease term.

Instead, you’ll effectively rent the equipment or machinery you need for an extended time frame from a leasing company. When the lease term ends, you may have an option to renew your lease or purchase the equipment outright, depending on how the lease is structured.

There are typically fewer documentation requirements, and less stringent approval guidelines, for small business owners seeking to lease equipment than there will be for businesses trying to finance the purchase of equipment.

You may not need to provide any financial statements at all if you’ve already built up solid business credit.

However, you may also wind up paying more for the lease than you would for purchase financing, without the eventual upside of owning an important piece of equipment.

Equipment financing or equipment leasing are usually good options for newer businesses with fewer financial resources, particularly those operating in industries that require lots of equipment.

Startups are unlikely to get approval for Small Business Administration or SBA loans, whether for equipment or anything else, which makes equipment loans from alternative lenders attractive to these newer businesses.

Established companies may not want to wait months while their SBA paperwork is slowly processed, either. A two- to four-week loan application process is much better than 90 days to more than a year, which is how long you’ll have to wait for an SBA loan to fund.

Make sure to discuss the loan terms for your financing or equipment lease with your financing representative before signing on the dotted line.

Make sure you’ve worked out an agreement that addresses your business needs and gives your business the right outcome, whether you need to lease equipment for two years or want a five-year repayment schedule for your financing agreement.

Equipment financing often works well for these types of businesses:

CONSTRUCTION COMPANIES

You can’t build a house with your bare hands, and you can’t operate a successful construction company without the right tools, equipment, and machinery to handle any project that comes your way.

There are all kinds of construction companies and contractors, from general contractors managing massive facility construction to the HVAC installers, roofers, and plumbers that add the finishing touches to transform an empty shell into a functional building. But nearly any construction company, no matter how broad or specialized its operations, will need all types of equipment to get the job done.

Your company might simply need a work van to get supplies from job to job. You might need massive earthmovers to prepare land for construction, trucks to bring in frames and materials and supplies, or even an office trailer for effective onsite project management.

No matter what equipment you need, you should be able to finance or lease it at reasonable rates and with loan terms that work for your business. We’ve helped many construction companies and specialty contractors get the equipment financing they needed to get the job done right, and we’d love to help you, too.

Not sure if equipment financing is right for your construction company? Check out our construction business resource page for more funding options and business loans.

RESTAURANTS

Restaurant businesses will always need equipment, especially when they’re just getting started or are looking to expand to new locations.

Restaurant equipment, like commercial cooking ranges or ovens, walk-in refrigerators, high-volume dishwashing systems, and even things for the front of the house such as commercial-size fans or sound systems, can easily make up the bulk of a new restaurant’s start-up costs.

Stretching the cost of this equipment out across several years can provide your restaurant with the wiggle room and extra capital it needs to hire and train staff, buy inventory, run marketing, and put together appealing decor for your customers.

When considering whether to finance or lease restaurant equipment, it’s important to consider the capacity, condition, and regulatory standing of everything you need.

A used range can save you a lot of money, but it might be on the market because of undisclosed defects. An older walk-in freezer might be in good shape, but may no longer conform to your state and local health codes. On the other hand, leasing a brand-new piece of restaurant equipment could crimp your profitability if you find yourself renegotiating another lease in a few years.

Not sure if equipment financing is right for your restaurant? Check out our restaurant business resource page for more funding options and business loans.

TRUCKING COMPANIES


Without rigs, a trucking company isn’t much of a business at all.

As you scale, you’ll need more than just trucks -- a larger transportation company is likely to have its own maintenance operations, which involve a whole range of equipment to move, fix, and refurbish the fleet.

Many trucking company expenses can be costly and involve heavy machinery, but a part for your truck may not be considered eligible for equipment financing in the same way the truck itself would be. For occasional maintenance, repairs, and supplies, consider applying instead for a business line of credit.

We can work with you if your trucking company is about to get its first, fiftieth, or 500th rig. Contact us today to see your options!

Not sure if equipment financing is right for your trucking company? Check out our trucking business resource page for more funding options and business loans.

HEALTHCARE AND MEDICAL

Doctors and dentists need scanners, screeners, technology, and tools. Other healthcare practitioners need equipment of their own.

A modern medical practice, no matter its specialty, depends on modern equipment to serve a wide range of functions and address a wide variety of patient needs and concerns. As both practitioners and patients know, this equipment isn’t cheap.

The regular release of new and supposedly better equipment can make it hard for your practice to stay current. This fast pace of equipment upgrades can make medical equipment leasing a great option for many healthcare practitioners.

Equipment leasing can give your medical business several years to use new tools and machinery and figure out how much benefit it really provides your patients. If the new equipment turns out to provide better outcomes, you’ll often be able to buy it outright at the end of your lease term. If it wasn’t all it was cracked up to be, you can send it back to us and lease something that can be more useful in your work.

Medical device manufacturers and pharmaceutical companies often benefit from equipment financing as well. Take a look at the next section for more information on equipment leasing and financing for manufacturing-focused healthcare businesses.

Not sure if equipment financing is right for your healthcare company? Check out our medical business resource page for more funding options and business loans.

MANUFACTURING

What does your manufacturing business need to scale? Another production line? Forklifts to move materials from the warehouse and finished products to trucks for shipment? Packaging machinery? A robot? Ten robots?

Manufacturing is more automated than ever, which means it’s more dependent on expensive, complicated equipment than ever. The more you make, the more equipment you’ll need to ensure everything runs smoothly -- and the more complex your supply chain, the more likely it is you’ll need transport and logistics equipment, too.

Over the long run, an automated production line can save on personnel costs, increase safety, reduce production errors, and speed time to market. However, getting what you need to automate your production line is likely to cost a lot of money up front.

There’s a reason why so few new automakers have been formed since the early days of Ford and General Motors -- it can be enormously expensive to reach a scale that can compete with established manufacturing incumbents.

Whatever you need to build your manufacturing business, you’ll be likely to get equipment financing to acquire it.

We’ve helped product-focused businesses buy all type of equipment, whether they’re making clothing, car parts, beer, school supplies, or other equipment. Get in touch with us today to find out how we can help you get the equipment you need.

Not sure if equipment financing is right for your manufacturing company? Check out our manufacturing business resource page for more funding options and business loans.

Advantages of equipment financing

  • Lets you acquire the equipment you need quickly
  • Familiar terms and rates (similar to auto loans)
  • Limited documentation requirements
  • Can be good for startups and newer businesses
  • Secured by the equipment itself

Drawbacks of equipment financing

  • Equipment may become obsolete
  • Can only use funds to acquire specific equipment
  • Must maintain equipment in good condition
  • You may not own the equipment after making all payments
  • May require a better personal credit score than other options

If you have...

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Time in business

3+ months

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Revenue

$10,000+ per month (annual revenue of $120,000)

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Credit score

500+

You could be eligible for up to $2 million in small business equipment financing today!