Equipment financing means you own the equipment at the end of the loan term, building equity in the asset. Equipment leasing is more like renting — you use the equipment but don't own it unless you exercise a purchase option at lease end. Financing typically offers better long-term value if you plan to keep the equipment.

Yes, many lenders finance used equipment, though terms and rates may vary based on the equipment's age, condition, and remaining useful life. Generally, equipment under 10 years old with documented maintenance history qualifies for financing. Newer used equipment often receives terms similar to new equipment.

Down payment requirements vary by lender and equipment type, typically ranging from 0% to 30%. Well-established businesses with strong credit may qualify for 100% financing. Newer businesses or higher-risk equipment categories may require 20-30% down. Larger down payments often result in better rates and terms.

You remain responsible for the loan balance regardless of equipment obsolescence. This is why matching loan terms to the equipment's useful life is crucial. Many businesses plan for technology upgrades by choosing shorter loan terms or setting aside reserves for future equipment purchases.

Yes, many equipment financing programs allow you to include soft costs such as delivery, installation, training, warranties, and even initial maintenance contracts. This provides true 100% financing and preserves working capital for other business needs.

Most equipment financing agreements allow early payoff, though some may include prepayment penalties, especially in the first 1-2 years. Always review your loan agreement for prepayment terms. Many lenders offer no-penalty early payoff options, which provides flexibility if you want to refinance or sell the equipment.

Equipment financing can help build business credit when payments are reported to commercial credit bureaus. Consistent, on-time payments demonstrate creditworthiness and can improve your ability to secure future financing. However, missed payments can negatively impact both business and personal credit if you've provided a personal guarantee.

You remain responsible for loan payments even if equipment breaks down. This is why many businesses include extended warranties or maintenance contracts in their financing. Some lenders offer payment protection insurance that covers payments during equipment downtime. Always maintain proper insurance coverage on financed equipment.