Equipment Financing

Equipment financing is a targeted loan specifically designed to help businesses purchase the machinery, vehicles, technology, or specialized equipment they need to operate and grow. Unlike general working capital loans that can be used for multiple purposes, equipment loans are backed by the equipment itself, which serves as collateral. This makes equipment financing accessible to businesses that might not qualify for unsecured loans, because the lender's risk is substantially reduced—if the business cannot repay, the lender can reclaim and sell the equipment.

The advantages of equipment financing are substantial. First, the interest rates are significantly lower than general business loans because the equipment secures the debt. Where a working capital loan might carry rates of 8-28%, equipment financing might be available at 4-10%, representing savings of hundreds or thousands of dollars over the life of the loan. Second, the loan term is typically matched to the useful life of the equipment. A piece of industrial equipment with a 10-year useful life can be financed over 5-10 years. A delivery vehicle with a 5-7 year useful life can be financed over 3-7 years. This matching of loan term to asset life means your payments align naturally with your business's ability to generate revenue from the equipment.

Equipment financing covers an expansive range of assets. Manufacturing equipment, construction machinery, commercial vehicles, restaurant and hospitality equipment, technology infrastructure, medical and dental equipment, agricultural equipment, printing and graphics equipment, HVAC systems, and industrial tools all qualify. Whether you need a single piece of equipment or are outfitting an entire facility, equipment financing can accommodate the scope. Financing amounts range from $10,000 for smaller equipment purchases to $500,000+ for major capital equipment projects.

The application process for equipment financing is straightforward. You'll need documentation of the equipment you're purchasing (quotes, invoices, equipment specifications), your business tax returns for 2+ years, personal tax returns, and business bank statements. If you're purchasing used equipment, we'll assess the condition and market value. Equipment is evaluated based on its current market value, useful remaining life, and ability to be resold if necessary. This evaluation typically takes 3-5 business days, and once approved, funding can occur within 5-10 business days.

A key feature of equipment financing is the flexibility available in structuring the deal. You might finance 100% of the equipment cost, or combine equipment financing with a down payment from your available capital (which reduces your loan amount and improves your loan terms). For businesses with existing equipment, we can sometimes do a sale-leaseback arrangement, converting equipment equity into working capital while maintaining equipment use through a lease arrangement. Some equipment financing programs include maintenance agreements or service plans, which provide additional protection and cost predictability.

One important distinction is new versus used equipment financing. New equipment typically receives longer loan terms and lower interest rates because it has a longer useful life and comes with manufacturer warranties. Used equipment can also be financed, though terms might be shorter and rates slightly higher depending on the equipment's age and condition. Nautix Capital finances both, and our equipment specialists can provide guidance on whether purchasing new or used equipment makes financial sense for your situation and how the financing options differ.

Equipment Financing rates currently range from 4% to 10% depending on your specific real-time credit tier, monthly revenue, and time in business. Use our interactive payment estimator below to calculate your exact estimated rate and monthly payment based on your business profile.