This type of financing is specifically for purchasing or leasing equipment for business use. For example, a dump truck for a construction company or an X-ray machine for a doctor’s office. Depending on a number of factors, a business may decide to purchase the equipment upfront and obtain an equipment loan or decide to lease the equipment. Obtaining a loan means a set period of time that the loan would be paid off, for example, 5 years at a fixed interest rate.
Equipment loans and leases are available through banks, equipment finance companies, directly through the vendor or manufacturer. Options are available but can vary.
Since there are different tax implications depending on which method of financing, consult with your tax professional on which option would be more ideal for your situation.