Why is equipment financing cheaper than a working capital loan?

Because the equipment is the collateral. If something happens in your business, the lender can repossess and sell the asset to recover their money — that hard-asset backstop is what makes the rate cheaper. Working capital is underwritten on revenue alone, so the lender is taking more risk and prices for it. As of 2026, we typically see equipment in the high single digits to low teens versus working capital in the mid-teens or higher.

What is a sale-leaseback and when does it make sense?

A sale-leaseback is a way to get cash out of equipment you already own free and clear. The lender effectively buys the equipment from you and leases it back over a 3-to-5-year period, so the asset stays in place and operating but the equity is unlocked as working capital. It makes sense when you want growth capital without touching real estate, taking on a personal guarantee, or running an MCA — the equipment was already paid for, so why leave that equity locked up?

How does equipment financing work if the equipment is manufactured overseas?

That is pretty much par for the course in the equipment leasing space — the borrower pays for the equipment, ships it, and clears it through U.S. customs, and then the lender reimburses on the back end once it is delivered. You will want to plan for that bridge in your cash flow. We help structure the timing so the gap between deposit and reimbursement does not strangle the rest of operations.

Can I defer payments while my equipment is being installed?

Often yes. Many of our equipment lenders will defer the first three payments so the asset can get installed, commissioned, and revenue-generating before the first invoice hits. That is especially useful for medical equipment, custom production lines, or anything with a meaningful ramp-up window. We negotiate that in upfront because it materially changes the cash impact in year one.

Should I use the manufacturer's financing or a third-party equipment lender?

If the manufacturer offers direct financing and the terms are reasonable, take it — we will tell you that to your face. Our value then shifts to the working capital piece you still need alongside the equipment. When the vendor financing is mediocre or unavailable, we run the deal through several third-party equipment lessors and let them compete for your business.

What is Equipment Leasing & Financing?

Equipment leasing and financing covers $100K to $50MM+ of machinery, vehicles, or technology over 3–7 year terms, with advance rates of 70%–85% of liquidation value and pricing of Prime + 3–10%. As of 2026, financing the asset directly is almost always cheaper than drawing on a working-capital line for the same purchase. Sale-leaseback structures let you extract 50%–70% of the equity from equipment you already own without adding a new debt covenant.

How It Works

When you are buying equipment — machinery, vehicles, a clean room, an imaging suite, anything with a serial number and a useful life — financing the asset directly is almost always cheaper than paying for it from a working capital line. The reason is collateral. The equipment itself secures the loan, so if the business runs into trouble the lender can recover by selling the asset. That hard collateral lowers the rate. Working capital, by contrast, is unsecured against revenue, so it costs more.

As of 2026, terms typically run 36 to 84 months, with 60 months as the sweet spot, at rates from the high single digits to the low teens depending on credit and the type of equipment. Many lenders offer a three-month deferral at the front so the equipment can be installed and start earning before the first payment.

A few practical notes. If the equipment is built abroad, expect to bridge the purchase yourself — paying the vendor, shipping it, and clearing customs — with the lender reimbursing on the back end. If the business is young or the credit is thin, a story credit deal is often still possible: a lender who underwrites the narrative, not just the financials. And if your manufacturer offers direct financing on reasonable terms, take it. We will say so plainly. Our value in that case is structuring working capital alongside.

The other half of this product is the sale-leaseback. If you already own equipment outright, the cash you put into it is locked up. A sale-leaseback transfers title to a lender and leases it back to you, which puts cash on your balance sheet without disrupting operations. It is a frequent choice for owners who want growth capital without touching real estate, signing a personal guarantee, or taking on a merchant cash advance.

Quick Facts

Cost of Capital	Rates from high single digits to low teens, asset-and-credit dependent
Best For	A manufacturer adding production capacity to support a new customer or contract A medical imaging center buying a PET, MRI, or ultrasound to expand service lines A construction or trades operator replacing or expanding free-and-clear fleet A non-emergency medical transport company financing wheelchair-lift vehicles after a bank decline A manufacturer importing equipment built abroad that needs to bridge customs An owner with free-and-clear equipment who wants to unlock that equity via sale-leaseback A growing business whose bank line is being drained by equipment purchases that belong on their own paper A young or thinner-credit business with a clear growth story that a believer-lender can underwrite A specialty manufacturer whose international vendor requires deposits before production starts An operator deciding between vendor financing and a third-party lessor who wants help comparing the offers

Cost of Capital

Rates from high single digits to low teens, asset-and-credit dependent

Best For

A manufacturer adding production capacity to support a new customer or contract
A medical imaging center buying a PET, MRI, or ultrasound to expand service lines
A construction or trades operator replacing or expanding free-and-clear fleet
A non-emergency medical transport company financing wheelchair-lift vehicles after a bank decline
A manufacturer importing equipment built abroad that needs to bridge customs
An owner with free-and-clear equipment who wants to unlock that equity via sale-leaseback
A growing business whose bank line is being drained by equipment purchases that belong on their own paper
A young or thinner-credit business with a clear growth story that a believer-lender can underwrite
A specialty manufacturer whose international vendor requires deposits before production starts
An operator deciding between vendor financing and a third-party lessor who wants help comparing the offers

Key Features & Benefits

Loan range $100K to $50M+ as of 2026
36 to 84 month terms; 60-month is the sweet spot
Rates from high single digits to low teens, asset-and-credit dependent
Three months of deferred payments available on many deals
Advance rates 70%–85% of liquidation value
Equipment appraisal or vendor invoice/spec sheet required
Sale-leaseback structure for equipment you already own free and clear
International equipment: borrower bridges the purchase, lender reimburses post-customs
"Story credit" deals available for thinner credit profiles with a viable growth narrative
Vendor/manufacturer financing evaluated and negotiated alongside third-party options
Works for B2B and B2C, titled vehicles, clean rooms, imaging suites, fleet, production lines
Pairs naturally with a working-capital line so the equipment doesn't drain operating cash

Equipment Leasing & Financing - Common Questions

Get answers to the most common questions about equipment leasing & financing

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Other Funding Solutions

Working Capital Loans & Lines of Credit

A working capital loan is short-term, revenue-based financing of $100K to $10M+ that funds in 2 to 10 business days, priced at 1.25%–4% per month. As of 2026, it's the fastest way to cover payroll, inventory, or growth-driven cash gaps when a bank can't move quickly enough — and at the same speed as a merchant cash advance it costs roughly half as much because the payment is monthly rather than a daily extraction from sales.

Learn more about Working Capital Loans & Lines of Credit →

Invoice Financing

Invoice factoring is the practice of selling unpaid B2B invoices to a factor for 75%–95% of face value within 24–48 hours, then receiving the balance (minus a 0.25%–1% fee per invoice) when the customer pays. As of 2026, pricing typically runs Prime + 1–6%, facility sizes range from $250K to $100MM, and the facility scales automatically with sales. Approval looks at your customers' credit rather than your tax return — which is why it works for growing companies whose financials don't yet tell the full story.

Learn more about Invoice Financing →

Asset-Based Lending

Asset-Based Lending (ABL) is a revolving credit line — typically $250K to $25M, priced at Prime + 1–5% — secured by a combination of accounts receivable (70%–90% advance), inventory (50%–75% advance), equipment, and sometimes real estate. As of 2026, ABL is the standard replacement for a maxed-out bank line when a company has hard assets but doesn't fit a traditional credit box. Most bank ABL desks start at $3–5M minimums, which is why deals below that size usually need an advisor with multiple lender relationships.

Learn more about Asset-Based Lending →

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