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Equipment Leasing vs. Equipment Loans
Although the terms are used interchangeably, there is a difference between equipment leasing and equipment loans. An equipment lease permits you to rent business equipment from your vendor for a monthly payment, but you don’t own the equipment during the lease term, whereas equipment loans are collateralized, allowing you to fully own the piece of equipment once you’ve repaid your loan according to terms.
How to Get Equipment Financing
FAQs About Equipment Financing
Can you finance used equipment?
Yes. In general, you can finance used equipment but not every lender will allow it. After all, if you default on an equipment loan the lender repossesses the machinery. Newer assets are often easier to liquidate and have less depreciation, so lenders often prefer financing new equipment.
What is considered business equipment?
Business equipment is a long-lasting hard asset that is fundamental to your business. Considered more permanent than supplies that are used up quickly, equipment includes machinery, vehicles, computers, fixtures, furniture, electronic devices, and other office machines.
What is the difference between financing and leasing?
Equipment leasing and equipment financing both allow you to access the equipment you need while paying for the asset over its lifetime. Equipment leasing permits you to rent business equipment from your vendor for a monthly payment while equipment loans allow you to fully own the asset once you have repaid your loan.