Hypothetical example: installation-to-revenue cash timeline for a $90,000 machine
| Stage | Timing | Cash out | Running setup total |
|---|---|---|---|
| Delivery freight | Week 2 | $2,800 | $2,800 |
| Installation labor | Week 4 | $6,200 | $9,000 |
| Electrical and ventilation | Week 4 | $3,000 | $12,000 |
| Permit and operator training | Week 5 | $1,000 | $13,000 |
| Payment 1 (hypothetical $3,000) | Week 5 | $3,000 | $16,000 |
| Payment 2 | Week 9 | $3,000 | $19,000 |
| Payment 3, first paid job lands in Week 10 | Week 13 | $3,000 | $22,000 |
All figures are hypothetical and exclude the $90,000 purchase itself. Use the payment amount from your own written offer and the dates your installer commits to.
What is the difference between purchase cost and setup cost?
The purchase cost is the price of the machine, and the setup cost is everything needed to make it work: freight, installation, utilities, permits and training.
In the example, the $90,000 machine needs $13,000 of setup before it can run. Setup is a separate line to fund, and it is easy to miss when you are focused on the invoice.
Ask each vendor for a written quote and list them in one place. Then decide which items the funding request will include and which you will pay from cash. Quotes expire, so note the date on each one and ask the vendor to hold the price until your funding review is done. The equipment financing for auction and used equipment page explains the products that commonly apply.
How long does installation really take?
Plan installation lead time from the vendors' calendars, not from your wish date, because freight, riggers, electricians and inspectors each book on their own schedule.
The example allows five weeks from purchase to a machine ready for training. Many projects stretch if a permit is slow or a part is back-ordered. Ask every vendor for a start date and a finish date in writing, and add a buffer.
- Order long-lead parts and electrical gear first.
- Confirm the site is clear and the floor can take the load.
- Schedule the permit inspection before the trainer visits.
Every extra week without revenue is another set of costs. If you will have a large gap, tell the funder when you apply so the plan reflects it.
When does the machine reach first productive use?
First productive use is the first day a paid job runs on the machine, and it usually comes after test runs, adjustments and operator practice.
In the example, trial runs take Weeks 6 through 9 and the first paid job lands in Week 10. Do not assume the first week after installation is a full production week, and do not assume customers pay on the day the job ships. Plan for a learning curve and some scrap or rework. Ask the manufacturer or installer whether a startup visit is included, since a technician on site during the first runs can shorten the adjustment period.
Also separate when you earn revenue from when you collect it. If your customers pay on terms, the first deposit into your bank account may arrive weeks after the first job runs, and your reserve has to cover that wait too.
If customers are waiting, line up the first orders in advance and put the dates in your notes. A funder reading term loans for expansion as an option will want to see why the machine earns more than it costs, so show how the first jobs will be booked and billed.
How should you plan the payment schedule and cash reserve?
Count the payments that fall due before the machine earns, add them to the setup costs and keep that total available as a reserve.
In the example, three $3,000 payments arrive before the first paid job is collected, so the reserve plus setup need is $22,000 on top of the machine. Payment amounts and schedules vary by product and by business, so use the figure in your written offer, not a guess.
Ask whether a schedule can start after installation, or whether payments begin at signing. Some products suit a gap better than others. When your numbers are ready, describe your purchase and deadline and include the installer's timeline, since it shows the funder you have a plan.
If the reserve looks too large, consider a smaller machine or a phased install. That is a better outcome than running short mid-project.
Finally, write the whole timeline on one page: purchase date, delivery, installation, permit, training, first job, first collection and each payment due date. Share it with your accountant and your installer, and update it every time a date moves. A plan that is kept current is the easiest thing to explain to a funder and the easiest thing to act on.
Frequently asked questions
Can installation costs be included in equipment funding?
It depends on the product and the funder. Some requests include freight and installation with the purchase price, others cover the machine only. State every cost and quote in your application.
How much cash reserve should I keep before revenue starts?
Enough to cover setup costs not in the request, plus the payments due before the first paid job is collected. Use your written offer's payment amounts and your installer's dates.
What if installation runs late?
Each late week adds payments without income. Get firm dates, add a buffer, and tell the funder if the schedule changes. Keep extra cash for the delay.
Do I need installation quotes to apply?
They are not always required, but they strengthen the file. Written freight, installation and utility quotes show you have planned the full cost.
Should payments start before the machine is running?
Ask each funder what schedule it offers. Payment schedules vary by product, so compare offers by the dollars due during your setup gap, and ask your accountant about timing.
Describe your purchase and deadline
Share the equipment, setup quotes and expected operating date.
Updated October 17, 2026 · Prime Funding Now Funding Team