Business Equipment Financing: What You Need to Know Before Applying

For many small to mid-sized businesses, acquiring the right equipment is key to staying competitive, expanding capabilities, and increasing efficiency. But purchasing machinery, vehicles, or technology outright can put significant pressure on cash flow. That’s where business equipment financing come in.

Whether you’re a construction firm looking to finance a new excavator or a medical practice upgrading imaging systems, financing business equipment offers a flexible path to growth without a massive upfront investment. In this guide, we’ll walk through everything you need to know before applying—so you can move forward with confidence and clarity.

What Is Business Equipment Financing?

Business equipment financing is a type of financing specifically designed to help companies purchase physical assets—such as machinery, computers, vehicles, or tools—needed for business operations. These loans are often structured with fixed payments over a defined term and may require little to no collateral beyond the equipment itself.

Unlike general-purpose small business loans or lines of credit, equipment financing is tied to a tangible purchase, often with terms tailored to the expected lifespan and value of the asset.

Eligibility Criteria: Do You Qualify?

Before applying, it’s important to understand the equipment financing requirements that lenders typically evaluate:

✅ Time in Business

• Many financing providers prefer to work with businesses that have been operating for at least 12–24 months. This helps demonstrate stability and repayment capacity.
• That said, startups may still qualify—especially with a strong business plan, good personal credit, or additional guarantees. FPG can help structure terms that work for newer businesses too.
• Bonus: Financing equipment now can also help you build your business credit profile, making it easier to access capital for future growth and expansion. 

✅ Credit Score

• Business credit score and/or personal credit score (especially for owners) may be reviewed. 
• A score of 600–650+ is generally required, though some lenders offer options for lower scores at higher rates. 

✅ Revenue Thresholds

• Most lenders want to see consistent revenue, often a minimum of $100,000–$250,000 annually. 
• Cash flow stability is a key factor in determining your ability to repay. 

✅ Collateral

• Equipment financing is often self-collateralizing—meaning the equipment being financed serves as security for the agreement. 
• This can make approvals easier compared to unsecured loans. 

✅ Industry Considerations

• Some lenders specialize in certain sectors (e.g., manufacturing, healthcare, construction), and industry risk profiles may affect your rate or approval likelihood. 

Financing Terms to Understand

Before signing anything, it’s essential to understand the small business financing terms associated with your equipment financing:

Interest Rates

• Can be fixed (same throughout the term) or variable (may change based on market conditions). 
• Rates generally range from 6% to 20%, depending on credit, equipment type, and lender. 

Repayment Period

• Typically 12 to 72 months, depending on the useful life of the equipment and financing amount. 

Monthly Payment Structure

• Fixed monthly payments make budgeting easier, but be sure to account for taxes, insurance, or maintenance if applicable. 

Down Payments or Fees

• In many cases, no money down is required—a major advantage for practices looking to preserve cash. This makes financing an attractive option for acquiring new equipment without a large upfront investment.

• However, some programs may require a small down payment, typically 5–20%, depending on the equipment type or credit profile. Origination or documentation fees may also apply, but these are usually minimal and disclosed upfront.

• At FPG, we work to structure terms that fit your budget—minimizing barriers and helping you move forward with confidence.

Early Repayment Terms

• Look for prepayment penalties or, conversely, early payoff discounts that could save money if you’re planning to pay off the financing ahead of schedule. 

The Application Process: What to Expect

When applying for aesthetic equipment financing, preparation makes all the difference. At FPG, we streamline the process so you can focus on what matters—running your practice.

✅ App-Only Financing Up to $500,000

For transactions up to $500K, many deals can be approved through a simple app-only process—no full financials required. Typically, you’ll need:

• A completed application 
• An equipment quote or invoice from your vendor 
• The last 3 months of business bank statements 

This fast-track option is ideal for busy practices that need to move quickly and keep documentation to a minimum.

For Transactions Over $500,000

If you're financing over $500K—or if the structure is more complex—lenders may request additional financials, such as:

• Business tax returns (1–2 years) 
• Profit & loss statements and balance sheets 
• Legal entity docs and licenses 

⏱ Timeline

Approval decisions often come within 24–72 hours, and funding can be completed in as little as 2–5 business days for well-prepared applicants.

Role of the Lender

Lenders assess risk, structure the deal, and typically pay the equipment vendor directly.
Some are hands-off. At FPG, we stay with you every step of the way—providing guidance, answering questions, and making the process easy from start to funded.

Choosing the Right Lender

Not all financing partners are created equal. Whether you’re exploring a bank, online lender, or equipment finance company, be sure to:

Compare Types of Lenders

• Traditional banks: Lower rates, stricter requirements. 
• Online lenders: Fast approvals, more flexible terms, higher rates. 
• Specialized equipment lenders: Industry expertise, flexible structures, and better asset knowledge. 

❓ Key Questions to Ask

• What are the total costs (including fees)? 
• Is the rate fixed or variable? 
• Are there prepayment penalties? 
• Can you customize the payment structure? 
• What happens at the end of the term? 

⭐ Why Experience Matters

Choose a lender that understands your industry and equipment needs. Their ability to assess value and structure the right deal makes the difference between a smart investment and a strained budget.

Common Mistakes to Avoid

To ensure your financing experience goes smoothly, watch out for these missteps:

❌ Underestimating Total Cost

Be sure to factor in interest, fees, and any servicing costs associated with the equipment—not just the sticker price.

❌ Not Reviewing Terms Carefully

Always read the full contract, especially around early payoff, insurance requirements, and end-of-term conditions.

❌ Overlooking ROI

Don’t just ask if you can afford the financing—ask whether the equipment will pay for itself in increased productivity, revenue, or cost savings.

Final Thoughts: Preparation Equals Confidence

Securing business equipment financing is a smart move when it aligns with your operations and growth strategy. With the right information, you’ll avoid surprises, choose a lender that fits your needs, and position your business for long-term success.

Before applying, take time to:

✅ Understand your eligibility
✅ Review financing terms and payment structures
✅ Prepare necessary documents
✅ Ask the right questions
✅ Estimate your ROI and monthly impact

Need help getting started?

Speak with an equipment financing expert at (603) 696-7076

FPG: More than capital. A true partnership.
We help businesses finance what’s next—so you can grow with confidence.