Equipment financing or working capital for an auction purchase?

What equipment is eligible, and what paperwork does the seller provide?

Equipment financing usually looks at the asset, so the funder wants to confirm what it is, its age and condition, and who is selling it; working capital looks more at the business and its cash flow.

For equipment financing, expect to supply the auction listing or lot description, the make, model and year, and the seller's details. Older or specialized machines may be reviewed more closely, and the funder may ask for the invoice or bill of sale once you win. Our page on equipment financing for auction and used equipment explains how those files are typically reviewed.

Working capital asks for less about the machine and more about the business: recent bank statements, ID and a voided check, plus the deal paperwork. That can be an advantage when a lot is unusual, or when the seller cannot provide detailed documents quickly. See working capital for inventory deals for how that product is reviewed.

Whichever product you pursue, save the listing page, the terms of sale and any condition report before the auction closes.

How do auction deadlines and pickup affect the choice?

Auctions set the clock: payment is often due within days of the close and pickup has its own window, so the product you choose must fit those dates, not just the price.

Before bidding, read the auction terms for three dates: when payment is due, which methods are accepted, and the last day to remove the equipment. Missing the pickup window can mean storage charges or forfeiture, depending on the seller.

• Apply before you bid if you can. A complete application with a decision typically within 24 hours leaves room before payment is due, though funding time varies by product.
• Set a bid ceiling from the landed cost, not the hammer price alone.
• Plan the truck and the rigging before the close, since moving heavy equipment on short notice costs more.

Equipment financing sometimes adds steps such as confirming the asset and the seller, while working capital may be simpler to document. Neither is automatically faster, so ask each funder what it needs and by when.

What costs sit beyond the equipment price?

The winning bid is rarely the full price: premiums, transport, rigging, repairs and insurance can add noticeable dollars, and which of them a product funds changes how much cash you must hold back.

In the checklist, a $48,000 bid becomes $57,650 once everything is counted. The buyer's premium adds $4,800, and the four items after it add $4,850. Under the equipment financing offer, $52,800 is financed and $4,850 must be paid in cash. Under the working capital offer, $57,300 is financed and only the $350 insurance is paid in cash.

Cash-paid costs matter most when the money is due before the equipment earns anything. Ask each funder two questions: which line items are covered, and whether funds go to you or straight to the seller. Also ask your accountant how the purchase should be treated for tax, since that is outside what this page can advise.

How do I compare two written offers for the same machine?

Convert each offer to the same three numbers: dollars financed, total repayment and the cash you still have to pay, then place the monthly payment next to what the machine will earn.

Using the hypothetical purchase above:

• Equipment financing: $52,800 financed, 36 monthly payments of $1,700, total repayment $61,200, funding cost $8,400. Add the $4,850 paid in cash and the total outlay is $66,050.
• Working capital: $57,300 financed, 12 monthly payments of $5,300, total repayment $63,600, funding cost $6,300. Add the $350 paid in cash and the total outlay is $63,950.

The working capital outlay is lower in this example, but its payment is $5,300 a month against $1,700. If the machine earns $4,000 a month, only the longer schedule fits. If it earns $9,000, either might. The numbers are made up; the method is what matters, and our equipment auction total cost calculator can help you run your own.

When your landed cost and deadline are clear, describe your purchase on the application and compare what funders send back, with no obligation to accept.

Updated October 17, 2026 · Prime Funding Now Funding Team