Equipment Financing Overview

Businesses that lack the cash to buy equipment they need have two choices: leasing or financing the equipment purchase. Buying equipment has some advantages-you own the equipment and can resell it later to recoup some of the purchase price. There may also be substantial tax advantages.

Equipment financing involves getting a loan for the money needed to buy the equipment. The lender will consider the equipment collateral for the loan, and may repossess the equipment if you don't pay the loan. It's important to read all agreement provisions carefully, and consult an attorney if you don't understand all the terms.