Equipment financing covers items a business uses rather than sells. The cases here are invented: a recording studio's console and microphones priced in two parts, an optical shop's lens edger, a leased treatment table, a used skid steer, a quick-service restaurant's oven and prep tables, and a cabinet shop's edge bander on a $1 buyout lease.
At a glance
- Forms
Loan, lease or finance agreement
- May secure it
The item itself
- Who decides
The funding partner
Two working lives in one request: a Tarboro, NC recording studio's mixing console and the microphones around it
Some purchases are two items that wear out at different speeds. An invented Tarboro, NC recording studio prices a digital mixing console at $41,760 and its microphones, headphones and monitor speakers at $17,385, both at an invented annual rate of 11.05%.
| Setup | Amount | Monthly payment | Total of payments | Interest |
|---|---|---|---|---|
| Console, 60 months | $41,760 | $909.01 | $54,540.60 | $12,780.60 |
| Microphones and monitors, 36 months | $17,385 | $569.57 | $20,504.52 | $3,119.52 |
| Both on one 60-month loan | $59,145 | $1,287.43 | $77,245.80 | $18,100.80 |
In this invented case, splitting the two raises the monthly outlay by $191.15 for the first 36 months and lowers the total interest by $2,200.68 (our arithmetic). The studio expects to replace the microphones and monitors before the console, so clearing them first keeps the two lives in step. Sound panels fixed to the walls and any new wiring are property work outside this site.
What a Tarboro, NC optical shop still owes on a financed lens edger, two years in
Equipment financing is debt: the business owes the balance, and the partner may hold a lien on the item until the last payment. An invented Tarboro, NC optical shop finances a lens edger and tracer for $29,480 over 48 months at a 9.65% annual rate, an invented payment of $742.74.
After 24 invented payments the shop has paid $17,825.76 and still owes $16,152.47, more than half the price, because the early payments carry more of the interest (our arithmetic). When the last payment clears, the lien on the edger can be released; the owner can ask the partner how that release is recorded. What a partner may hold as security while the balance runs is the subject of a separate article on collateral.
Reading a 36-month lease on a Tarboro, NC chiropractic office's treatment table, line by line
A lease lets a business use equipment it does not own for a set number of payments. An invented Tarboro, NC chiropractic office leases a powered treatment table at $617 a month for 36 months, $22,212 across the invented term before any end-of-lease choice (our arithmetic). The lines worth reading:
- Payment and term: the amount, the number of payments and when the first one is due
- End of term: return the table, renew, or buy it at the price the lease sets, which may be fair market value or a fixed sum
- Upkeep and insurance: which side pays to service and insure the table
- Ending early: what the office owes if it stops before the last payment
- Wiring: the table plugs in; any new outlet for it is property work outside this site
A fair-market-value option leaves the end price open until the lease ends, so the invented total above leaves it out.
Used heavy equipment financing on a track skid steer for an Edgecombe County, NC fence contractor
Buying used lowers the price, though an older machine may get a shorter term from a partner. An invented Edgecombe County, NC fence contractor prices a used track skid steer with an auger attachment at $61,350, at an invented annual rate of 10.55%.
| Term | Monthly payment | Total of payments | Interest |
|---|---|---|---|
| 36 months | $1,995.47 | $71,836.92 | $10,486.92 |
| 48 months | $1,572.25 | $75,468.00 | $14,118.00 |
Choosing 36 months over 48 adds an invented $423.22 to each payment and takes $3,631.08 off the interest bill (our arithmetic). The hours on the meter, the year and any inspection record are details a partner may ask about. Edgecombe County, NC counted 327 construction nonemployer establishments, owner-run outfits with no paid employees, in 2024 (Nonemployer Statistics).
Same oven, two contracts: a Tarboro, NC quick-service restaurant's conveyor oven on a finance agreement and on a loan
Whichever of the two contracts a restaurant signs, the equipment is its own once the last payment is made. The difference sits in the paperwork: a loan states a principal balance and an interest rate, while a finance agreement may state only a fixed payment schedule. An invented Tarboro, NC quick-service restaurant prices a ventless conveyor oven and two refrigerated prep tables at $27,815.
Priced as an invented 48-month loan at an 11.3% annual rate, the oven and tables would cost $722.95 a month, $34,701.60 over the full term. An invented finance agreement for the same equipment lists $738 a month for 48 months, $35,424.00 in all, which is $722.40 more (our arithmetic). Setting the totals of payments side by side compares the two even when one shows no rate.
Wiring a new circuit for the oven, or any wall work around the tables, counts as property work and falls outside this site; the oven and tables themselves are equipment. The same split between machine and hookup comes up again in the taqueria article, this time on a tortilla machine.
A $1 buyout lease on a Tarboro, NC cabinet shop's edge bander, totaled to the last dollar
A $1 buyout lease runs like a lease, then transfers the equipment for one dollar when the last payment is made. An invented Tarboro, NC cabinet shop leases an edge bander priced at $33,275 for $869 a month over 48 months.
The 48 invented payments come to $41,712.00, and with the $1 buyout the lease costs $41,713.00 in all (our arithmetic). Financed instead as an invented loan at a 9.95% annual rate over the same 48 months, the payment would be $843.14 and the payments total $40,470.72, so the lease costs $1,242.28 more in this invented case.
Price, money down, rate and months are what the equipment calculator here asks for, and lease payments are not among them, so lease totals are worked by hand as above. The bakery mixer on the business loans page shows a loan and a lease told apart by their paperwork. Before any of these contracts, a first-time borrower can start with where a first loan request begins.
By Riverview Business Loans · Updated