How equipment financing works
A funding partner pays for the equipment, and you repay on a fixed schedule over a term that often reflects the equipment's useful life. The equipment typically serves as collateral, which can make approval and pricing more manageable than unsecured options. At the end of the term you usually own it, although some structures work like leases with a return or purchase option at the end.
Because the funder relies on the equipment's value, it will ask detailed questions: what it is, how old it is, its hours or condition, and who is selling it. Private sellers, auctions and liquidators each add steps compared with buying new from a dealer.
What product and dealer businesses finance
For businesses on this site, equipment financing usually covers the tools that move, store, make or sell goods. A distributor adds a forklift and pallet racking before taking a larger supplier tier. A manufacturer buys a packaging line at a plant liquidation. A retailer outfits a new space with fixtures, coolers or a point-of-sale system.
- Forklifts, pallet jacks and warehouse racking
- Packaging, labeling and production machinery
- Store fixtures, display cases and refrigeration
- Point-of-sale systems and shelving
- Shop lifts, diagnostic tools and service equipment for dealers
- Delivery vans used in your own operations
Auction and liquidation purchases
Auctions and liquidation sales often price used equipment below dealer levels but require payment and removal within days. Equipment financing works when the funding partner can review the listing, photos and inspection details before the sale. When the window is too short for that review, some owners use short-term working capital instead and accept the different cost and term.
Budget beyond the hammer price: buyer premiums, taxes, rigging, transport and reinstallation all add cost and may not be financed. Read how to finance equipment bought at auction for a step-by-step plan.
Used equipment: what funders look at
Many funders typically finance used equipment, but age, hours, condition and resale market matter. Common, widely resold machines tend to be easier to finance than custom or highly specialized equipment. Expect questions about serial numbers, service history and whether any lender already has a lien on the item.
- Make, model, year and serial number
- Hours, mileage or cycle count where relevant
- Photos and any inspection report
- Seller name and terms of sale
- Proof the title or bill of sale will be clear
When equipment financing is not the best fit
Equipment financing is a weak fit for inventory you plan to resell, for very small purchases where paperwork outweighs savings, and for items with little resale value. Dealers buying units to put on the lot typically use other structures. If the auction closes before a funder can review the item, a faster cash-flow product may be the practical choice.
Dealers can compare approaches on the auto dealers and equipment dealers pages.
Costs and terms to compare
Compare the rate, term length, down payment, fees, end-of-term options and what happens if you want to sell the equipment early. A longer term lowers the payment but increases total cost. Match the term to how long the equipment will earn money for you, not simply to the lowest payment offered.
Funding partners also review time in business, revenue and credit. Requirements vary by product and funder. See what funders review.
What you’ll typically need
- Recent business bank statements
- Government-issued photo ID
- Equipment quote, auction listing or bill of sale
- Make, model, year, serial number and photos
- Seller contact and payment deadline
Frequently asked questions
Can I finance equipment bought at an auction?
Often, yes, if the funding partner can review the item and seller terms in time. Many auctions require payment within a few days, so start before the sale with the lot listing and your bank statements. Confirm payment deadlines with the auction house.
Will funders finance older used equipment?
Many will, but limits on age, hours and condition vary by funder. Equipment with a strong resale market is usually easier to finance than older or specialized machines. Share full details up front to get a clear answer quickly.
Does the buyer premium count toward the financed amount?
It depends on the funding partner. Some finance the full invoice including premiums and taxes, while others finance only the equipment price. Ask before bidding so you know how much cash you need to bring yourself. Include it in your maximum bid either way.
Do I need a down payment?
Some offers require one and some do not. Down payments are more common on older equipment, private-party sales and newer businesses. Ask each funding partner, and include freight and installation costs in your cash plan. Plan that cash before you commit to a purchase.
Can I finance equipment from a closing business?
Often, if the seller can provide clear title and the funder can verify the equipment. Ask whether any lender has a lien on the items, and have an attorney review the purchase agreement before you pay. Clear title protects both you and the funding partner.
Found the right machine?
Apply online and include the listing or quote so our funding partners can review the equipment.
Updated September 14, 2026 · Prime Funding Now Funding Team