Equipment financing

There are multiple ways to obtain the equipment you need for your business.

These include:

  1. Equipment financing
  2. Syndicated Line of Credit (SLOC)
  3. Invoice Factoring

Financing equipment can mitigate the risks inherent in the purchase or large-ticket assets and free cash up for inventory, marketing, research and development, and other costs.

Get started: Book a phone appointment with us.

Why Finance Equipment?

  • Maintain and free up cash flow
  • Benefit from IRS Section 179 (applicable to capital leases)
  • Keep up to date with new technology
  • Leverage equipment expertise
  • 100% financing with zero down payment available in some cases

Equipment Finance Structures

We focus on two options: capital lease or operating lease.

Equipment Finance Agreement (EFA)


Capital Lease: Through an Equipment Finance Agreement (EFA) you make monthly payments over a term period of years and own the equipment once it’s paid off. (A capital lease is sometimes referred to as a finance lease or sales lease.)

This is an on-balance sheet structure. Equipment is recorded as an asset and can be depreciated, which means the payments are not fully tax-deductible.

Save Money With Section 179


However, thanks to Section 179 of the IRS tax code, you can deduct the full purchase price of qualifying equipment and software – up to $1 million – from your gross revenue. You can also deduct 100% of the depreciation.

Here’s an example of how Section 179 works:

Equipment purchases: $1,190,000
First year write-off:
($1 million maximum in 2019)
$1,000,000
100% Bonus first year depreciation $190,000
Total first year deduction: $1,190,000
Cash savings:
($1,190,000 x 35% tax rate)
$416,500
Equipment cost after tax:
(Assuming a 35% tax bracket)
$773,500

Fair Market Value (FMV)


Under an operating lease, you make monthly payments on your equipment.

At the end of the term you have the option to buy the equipment at fair market value, return the equipment, finance it again, or lease new equipment.

This is off-balance sheet financing. Most FMV lease payments are 100% tax deductible.

An operating lease is a good option for businesses that need to regularly upgrade to recent models.

Industries and Equipment Funding

Below are some typical industries we serve and common types of equipment requests we process. (This is not an exhaustive list.)

Exclusions: guns, boats, planes.

Construction

  • Yellow iron: Cranes, excavators, bulldozers, motor graders, wheel loaders, dumpers, loader backhoes, compact track loaders, crawler loaders, etc.
  • Trucks
  • Rock crushers
  • Cement mixers
  • Plumbing-related equipment
  • Electrical-related equipment
  • Mixed fleet data solutions (software)
  • Drones
  • Tools

Manufacturing

  • CNC machines
  • 3D printing equipment
  • Robotics
  • Conveyors

Snow Removal and Landscaping

  • Trucks, snowplows and related accessories
  • De-icing/salting/sanding equipment including conveyor chain spreaders and hopper spreaders
  • Snowblowers
  • Landscaping vehicles and equipment

Retail

  • Fixtures
  • Signage
  • POS systems
  • Alarms and security technology

Healthcare

  • Ambulances
  • Medical diagnostic equipment
  • Dental equipment
  • X-Ray machines
  • Software

Restaurants and Bars

  • Cooking and refrigeration equipment including walk-in coolers
  • Commercial sinks, work tables, and beverage equipment
  • Food display and merchandising equipment
  • Dishwashing equipment
  • POS systems
  • Security systems
  • Furniture

OTR Trucking

  • Long-haul sleeper cab*
  • New and used trailers including drop decks, double drop decks, lowboys, extendable trailers, flat beds, end dumps, bottom dumps, side dumps, dry vans, hydraulic tails, slide axles, tank trailers, belt trailers, hopper/grain trailers, live floor trailers, chipper trailers.
  • Short-haul day cab

* Applicants typically need to have 3 trucks in their fleet already. Exception: We do have startup programs for owners of 1 truck; requires a 25% downpayment.

Towing and Hauling

  • Tow trucks
  • Dump trucks
  • Moving trucks/ Box trucks

Office equipment

  • Computers, printers and other electronics
  • Hardware and software
  • Desks and furniture
  • Video and phone equipment
  • Vehicles

Farm equipment

  • Tractors
  • Trucks
  • Backhoes
  • Balers
  • Loaders
  • Seed drills
  • Cultivators
  • Cultipackers
  • Plows
  • Harvesters
  • Front-end loaders, skid-steer loaders
  • Bulk milk cooling tanks
  • Milking machines

Get started with equipment financing.


IRS issues guidance on Section 179 expenses and Section 168(g) depreciation under Tax Cuts and Jobs Act