Heavy equipment represents one of the largest capital expenditures for manufacturing businesses. The right financing structure preserves your working capital while ensuring you have the machinery needed to compete and grow.
The Case for Financing Over Cash Purchase
Purchasing heavy equipment outright can consume your entire working capital reserve. Financing spreads the cost over the equipment's useful life, preserving cash for operations, payroll, and growth.
Tax Advantages
Section 179 of the IRS tax code allows businesses to deduct the full purchase price of financed equipment in the year of purchase. This means you get the tax benefit of ownership while spreading the actual cost over time.
Asset Protection
When equipment serves as its own collateral, you protect your other business assets and personal property from being tied to the financing.
Equipment Financing Options
| Option | Down Payment | Term | Rate | Best For |
|---|---|---|---|---|
| Equipment Loan | 0% to 20% | 2 to 7 years | 5% to 30% | Ownership at end |
| Equipment Lease | $0 | 2 to 5 years | Varies | Technology that updates |
| SBA 504 Loan | 10% | Up to 25 years | Below market | Major fixed assets |
| Sale-Leaseback | None | 2 to 5 years | Varies | Cash from existing equipment |
What Equipment Qualifies?
Nearly any business equipment qualifies for financing:
- CNC machines and manufacturing equipment
- Commercial vehicles and fleet trucks
- Construction equipment and heavy machinery
- Medical and dental equipment
- Commercial kitchen equipment
- IT infrastructure and servers
Getting the Best Equipment Financing Terms
Get quotes from multiple lenders. Equipment financing terms vary significantly between providers.
Negotiate the equipment price first. Secure the best purchase price before discussing financing.
Consider total cost of ownership. Include maintenance, insurance, and operating costs in your calculations.
For working capital alongside equipment purchases, explore SBA loan options for manufacturers.
The IRS Section 179 page details current deduction limits.
Finance your equipment through Arkadian Capital.
