How equipment financing payments work
Equipment financing is an amortizing loan secured by the equipment you're buying. Because the asset itself is collateral, rates are usually lower than unsecured funding, and approval is easier — the lender can recover the equipment if the loan isn't repaid. Each fixed monthly payment covers interest plus principal until you own the equipment outright.
Worked example
What affects your equipment financing cost
Down payment
Many equipment loans offer 0–10% down, and some lenders finance 100% including soft costs (delivery, installation, taxes). A larger down payment lowers the amount financed and your monthly payment — enter the amount you'll actually finance (cost minus any down payment) above.
Term length
Terms generally match the equipment's useful life — 2–3 years for tech, 5–7 years for heavy machinery and vehicles. A longer term lowers the monthly payment but raises total interest.
Rate
Because the equipment secures the loan, rates run lower than unsecured products — typically 7–25% APR depending on credit, time in business, and the equipment type. New, standard equipment from a known vendor prices best.
A tax note worth asking your accountant about
Under Section 179, businesses can often deduct the full purchase price of qualifying equipment in the year it's placed in service, rather than depreciating it over years. Financing the equipment while deducting it can improve cash flow — confirm specifics with your CPA.
The Broker Shop is a funding broker, not a lender. We put 50+ equipment lenders in competition for your purchase so you get the lowest rate and the right term — free to you, funded in as little as 24–72 hours.