Equipment Financing for Small Business | $25K–$5M+ | OneDay Capital

How Equipment Financing Works

Equipment financing lets your business acquire the tools, vehicles, machinery, or technology it needs without paying the full cost upfront. Instead of depleting working capital on a $100,000 piece of equipment, you spread that cost over 24–84 months of predictable payments — while the equipment generates revenue from day one.

The financed equipment itself serves as collateral, which is why equipment loans are one of the most accessible financing options for businesses with imperfect credit. The lender's risk is secured by the asset, not solely by your credit history.

Apply with equipment details — make, model, year, seller, and purchase price
Receive a decision — typically 24–72 hours for standard equipment; same-day for smaller amounts
Equipment is purchased — lender pays seller directly or reimburses you for recent purchases
Make fixed monthly payments over the loan term
Own the equipment outright at the end of the term (loan structure) — or return/upgrade it (lease structure)

What Types of Equipment Can Be Financed?

Nearly any hard asset used in business operations qualifies for equipment financing. Here are common equipment categories by industry:

Industry	Examples
Restaurants & Food Service	Commercial ovens, refrigeration, POS systems, food trucks
Construction & Contractors	Excavators, lifts, trailers, power tools, dump trucks
Transportation & Logistics	Semi-trucks, delivery vans, forklifts, trailers
Healthcare & Medical	Diagnostic equipment, dental chairs, imaging systems, exam tables
Manufacturing	CNC machines, presses, conveyors, 3D printers
Retail & Service	Display cases, salon chairs, HVAC systems, security systems
Technology	Servers, workstations, networking equipment, AV systems
Agriculture	Tractors, irrigation systems, harvesters, storage facilities

Soft costs — software, installation, training, and delivery — are often includable in the financed amount, up to 20–25% of the total.

Equipment Financing Qualification Requirements

Requirement	Typical Range
Time in business	1+ year (startups may qualify with strong down payment)
Monthly revenue	$10,000+ for amounts under $100K; higher for larger loans
Personal credit score	550+ (equipment serves as collateral — more lenient)
Equipment age	New equipment preferred; used generally under 10–15 years old
Documentation	Invoice or purchase agreement, 3–6 months bank statements
Down payment	0–20%; varies by credit profile and equipment type

Equipment Loan vs. Equipment Lease: Which Is Better?

When financing equipment, you have two structures to choose from:

Feature	Equipment Loan	Equipment Lease
Ownership	You own after final payment	Leasing company owns; you rent
Monthly payment	Higher (paying off principal)	Lower (paying for use)
Depreciation benefit	Yes — Section 179 deduction	Lease payments are deductible expenses
Equipment obsolescence	You absorb the risk	Easier to upgrade at end of term
Best for	Long-lived equipment (trucks, machinery)	Fast-changing tech, short-term needs
End-of-term options	Own free and clear	Buy out, return, or upgrade

Most equipment financing through the OneDay Capital network is structured as loans (not leases), giving you ownership at the end of the term.

Section 179 Tax Deduction: A Major Financial Benefit

Section 179 of the IRS tax code allows businesses to deduct the full purchase price of qualifying equipment in the year it's placed in service — rather than depreciating it over multiple years. For 2026, the Section 179 deduction limit is $1,160,000 (subject to phase-out above $2.89M in purchases).

Why this matters for financing: You can finance equipment, take the full deduction in year one, and potentially reduce your tax bill by more than your first year of loan payments. This makes equipment financing even more cost-effective than it appears at face value.

Bonus depreciation (currently phasing down from 60% in 2024) may also apply for new equipment placed in service. Consult your tax advisor for your specific situation.

Equipment Financing vs. Alternative Funding

If you need equipment, equipment financing is almost always cheaper than using general-purpose funding. Comparing options:

Equipment financing: Asset-backed, lower rates, preserves working capital, tax advantages — best for equipment purchases
Working capital loan — higher rates, but flexible use; consider only if equipment purchase is part of a broader operational need
Merchant cash advance — much higher cost than equipment financing for the same asset; generally not recommended for equipment
SBA 7(a) or 504 loan — excellent rates but 60–90 day timeline; best for large, planned equipment purchases where you have lead time

Finance the Tools
Your Business Needs.

Discover a variety of funding options available for your business.

Bad Credit Business Funding