Equipment financing works differently from general business funding because a specific, sellable asset secures the arrangement. That single fact explains most of the category's quirks : why approval can be easier, why the provider wants the vendor quote, and why a 20-year-old specialty machine is hard to fund.
Here's the ground-level view.
The equipment is the collateral
Providers size the funding against the equipment's cost and expected resale value, and take a security interest in the asset. If payments stop, the asset is recoverable : which is why providers can say yes where unsecured funders say no.
How terms are set
Terms generally track the equipment's useful life : you don't finance a truck over fifteen years or a server over ten. New versus used, the vendor, and the equipment's resale market all shape the offer. Ask how the term was chosen and what happens at the end.
What providers ask for
- The vendor quote or invoice
- Basic business financials and time-in-business confirmation
- Business credit profile
- Details on the equipment: new or used, condition, delivery timeline
Frequently Asked Questions
Want to explore your options?
If this topic relates to a funding need you have, you can begin a funding request through Kennify's financing partner at any time.