Equipment financing pays for a named machine, vehicle or system and is usually secured by that equipment, through a loan, a lease or an equipment finance agreement. Driftland Advances, a small-business funding broker in Conway, Arkansas, explains the structures and what partners review, then presents Faulkner County requests to lending partners, who decide and set terms.
| Designed for | One named asset: a loader, a van, a cooler, an X-ray unit |
|---|---|
| Security | Usually the equipment itself |
| Structures | Loan, lease or EFA, depending on the partner |
| Used equipment | Frequently financed; hours, age and resale value drive it |
| Faulkner County context | 384 construction and 317 ambulatory health care employer establishments (CBP 2023) |
| Who decides | The lending partner |
Loan, lease or EFA
| Structure | Who owns it | At the end |
|---|---|---|
| Equipment loan | You own it from the start; the lender holds a lien | The lien is released once the loan is paid |
| Fair market value lease | The lessor owns it while you use it | Return it, renew, or buy it at market value |
| Dollar-out or nominal buyout lease | The lessor owns it during the term | You buy it for a nominal amount |
| Equipment finance agreement (EFA) | You own it; the agreement works much like a loan | Ownership is free and clear once payments end |
Leases can keep monthly payments lower when you expect to replace the equipment after a few years. Loans and EFAs make more sense for machines you will run until they wear out. The tax treatment of each structure differs, so ask your accountant before you choose.
New or used equipment
Used equipment can be financed, but partners look harder at age, hours, condition and resale value, and they may ask for an independent appraisal or inspection. Terms on used machines are often shorter, because the equipment has less useful life left. A dealer invoice for a used machine is easier to finance than a private sale, which some partners will not fund at all. Our note on equipment appraisals explains what an appraiser looks at and why a partner might ask for one.
Why a credit line is the wrong tool for a big machine
An equipment loan is tied to one asset and paid off over roughly its useful life. A line of credit is general-purpose and short-term. Using a line to buy a large machine ties up the limit you need for running costs and forces a faster payoff than the equipment justifies. For anything with a serial number and a multi-year life, equipment financing or a term loan is usually the better tool.
Assets Faulkner County, AR businesses commonly finance
- Contractors: compact track loaders, mini excavators, trailers, work trucks and service vans. The county had 384 construction employer establishments in 2023 (County Business Patterns 2023).
- Medical and dental practices: imaging units, operatory chairs, sterilization equipment and practice software. There were 317 ambulatory health care establishments in 2023.
- Restaurants: ranges, hoods, walk-in coolers and point-of-sale systems. The county had 218 restaurants and other eating places.
- Retailers: shelving, refrigerated cases and point-of-sale hardware.
We do not arrange financing for trucking fleets or farm equipment. Work trucks and vans used by contractors and service businesses are a different matter, and partners finance them as business equipment.
What lending partners usually review
- A dealer quote or invoice with make, model, year and serial number
- For used equipment, hours, condition and sometimes an appraisal
- Business bank statements and time in operation
- Owner and business credit
- Your down payment, if any, and any trade-in
If the machine will be installed in leased space or needs a building permit, sort that out first; the Conway, AR permits checklist lists the city contacts.
Check the payment before you call
The five-year term loan calculator takes an amount, a rate and a term and returns the monthly payment, the total interest and the total repaid. Enter the price after your down payment to see a loan payment. It does not model leases; for a lease, multiply the monthly payment by the number of payments and add any buyout to get the total. How a request moves covers the next step, and funding by sector and local data and contacts give the wider picture.
By Driftland Advances · Updated
