The short answer
An equipment financing package is the vendor's quote or invoice, a description of the equipment and what it will do for the business, two or three years of business financials, a debt schedule and the owners' personal financials. The lender sets the term against the equipment's useful life and takes a lien on it. Under SBA's rules a 7(a) equipment loan generally runs up to 10 years.
What the lender is deciding
Two things. Can the business make the payment from its cash flow? And if it cannot, what is the equipment worth to someone else? A delivery truck or a standard machine tool has a ready market. A custom production line built into a plant does not. The more specialized the equipment, the more the lender leans on the business and its owners and the less on the machine.
The package
The equipment
- The vendor’s quote, purchase order or invoice, with make, model, year and serial number if assigned
- New or used. For used equipment: age, hours or mileage, condition, and an appraisal or dealer valuation if you have one
- Delivery, installation and training costs, listed separately
- Where the equipment will be kept
- The warranty and any service contract
- What it replaces or adds: more capacity, lower cost, a new product, or a repair that can no longer wait
- How it pays for itself, in a few lines of arithmetic
A credit officer reads that last item closely. Do not leave it out.
The business
- Two or three years of federal business tax returns
- A current interim income statement and balance sheet
- A debt schedule: every loan and lease, with lender, balance, payment, maturity and what secures it
- Any existing liens on business assets
- Organization documents and a certificate of good standing
The owners
- A personal financial statement for each owner the lender names
- Personal federal tax returns
- Other loans guarantied
For small amounts some lenders decide on a short form and a credit review and ask for financials only above a set amount. That cutoff is each lender’s policy.
Structure
Down payment. Lenders commonly ask the business to pay part of the price. How much depends on the lender, the equipment and the business. Soft costs such as delivery, installation and training are harder to finance than the machine, because they cannot be repossessed.
Term against useful life. The loan should be repaid before the equipment wears out. A lender will not write a seven-year loan on a machine with a five-year working life.
Worked example (hypothetical). A fabrication shop is buying a laser cutter for $400,000, plus $20,000 for delivery and installation. It puts down $60,000 and borrows $360,000.
Payment. At 8 percent over seven years the payment is about $5,610 a month, or $67,300 a year.
Does it pay? The shop now sends cutting out at $9,000 a month. Bringing it in house saves that, and adds $2,000 a month in power, gas and maintenance. Net saving is $7,000 a month, or $84,000 a year. That covers the $67,300 payment 1.25 times ($84,000 divided by $67,300) before any new sales.
Whole business. Cash available for debt service is $310,000 a year including the saving, and existing loan payments are $150,000. With the new payment, total debt service is $217,300 and coverage is 1.43 ($310,000 divided by $217,300).
Term. The maker rates the machine for well over seven years of use, so the term sits inside its life.
The rate, term and savings are this example’s assumptions.
Check payments with the amortization calculator and coverage with the DSCR calculator.
The lien. The lender’s claim on the equipment is recorded so that other creditors and buyers are on notice.
- For most equipment the lender files a UCC financing statement with the state, describing the equipment.
- For titled vehicles and trailers, the lender is noted on the certificate of title.
- If another lender already has a blanket lien on all business assets, the equipment lender will usually want that lender to agree that the new equipment stands outside it. Raise this at the start, because it can delay closing.
Insurance. The lender will require the equipment to be covered against loss and to be named on the policy. Get a quote before closing.
Guaranty. Expect a personal guaranty from the principal owners on a bank loan.
Looking for a lender now? Find lenders for this in your state or see Business lenders state by state.
Bank loan, vendor financing or lease
Three ways to pay for equipment, in general terms
| Route | Who provides it | How it works | What to ask |
|---|---|---|---|
| Bank or credit union loan | A lender that also holds your deposits and other loans | A term loan secured by the equipment, often with a blanket lien and a guaranty | Will you carve this equipment out of any existing lien, and what term will you give? |
| Vendor or captive financing | The maker or dealer, or a finance company tied to it | Arranged at the point of sale, secured by that equipment only | What is the total cost over the term, and what happens if I pay early? |
| Lease | A leasing company or a bank’s leasing unit | The lessor owns the equipment. You pay to use it and may have an option to buy at the end | What do I owe at the end, who maintains it, and can I return it? |
Compare on total dollars paid over the same period, not on the monthly figure alone. For a lease, add the purchase option if you intend to keep the equipment.
This guide makes no statement about how a loan or a lease is treated for tax or on a balance sheet. That depends on the terms and on your business. Ask your accountant before you choose on those grounds.
SBA options
SBA 7(a). Equipment is an eligible use. The SOP’s maturity rules for 7(a) loans:
SBA 7(a) maturities for equipment (SOP 50 10 8.1, Appendix 17)
| Use of proceeds | Maximum maturity |
|---|---|
| Equipment, fixtures or furniture | Generally not more than 10 years. Up to 15 years if the IRS asset class useful life supports the term |
| Working capital or inventory | Not more than 10 years |
| Mixed purpose where machinery and equipment are 51 percent or more of proceeds | The useful life of the machinery and equipment, not more than 15 years, plus an installation period of not more than 12 months |
SBA 504. Long-lived machinery and equipment can be financed in a 504 project, with a bank first lien, an SBA debenture and a borrower contribution. See the 504 checklist and 7(a) or 504: which fits.
In the SBA file for Oct 2023 through Sep 2026, the middle 7(a) loan was $180,000 with a middle term of 10 years. Those figures cover all uses, not equipment alone. SBA does not require you to use an agent or broker.
Finding lenders
Be plain about what the public record offers here: very little.
- Banks and credit unions. Equipment loans are reported inside commercial and industrial loans. Nothing separates them. A bank with a large business loan book for its size is a reasonable call.
- Lease financing. Banks report lease financing receivables on their own line of Schedule RC-C. A bank with a balance there has a leasing operation.
- Equipment finance companies and captives. They file nothing this site reads. They are not in the lender list.
- SBA. Each 7(a) and 504 loan is public with its lender, though the file does not say which loans were for equipment.
So the search is short: your own bank first, the vendor’s offer second, one or two other banks or credit unions with business loan books third. Then compare.
Want a person to check the public record for an equipment loan? Request financing from The Lender Report’s operator. A person replies by email, usually naming lenders that have made loans like yours. It is free, it covers business and investment property loans only, and nothing is sent to a lender.
What the public record can and cannot tell you
It can: show which banks and credit unions hold business loans and which report lease receivables, and which lenders make SBA loans.
It cannot: identify equipment lenders as such, or show rates, down payments, terms or the kinds of equipment a lender will finance.
Questions to put to the lender
- What term will you give on this equipment, and why?
- How much do you want down, and will you finance delivery and installation?
- What lien will you file? Does it reach other assets?
- Is there a charge for paying early?
- For a lease: what are my choices and costs at the end?
Terms used here
- Equipment financing: A loan used to buy business equipment, secured by that equipment and repaid over a term tied to how long the equipment will be useful.
- UCC lien: A lender's claim on business assets other than real estate, made public by filing a financing statement under Article 9 of the Uniform Commercial Code.
- Term loan: A business loan for a set amount with a maturity of more than one year, repaid on a fixed schedule from the company's cash flow.
- Blanket lien: A security interest that covers all or nearly all of a borrower's assets, present and future, instead of one named piece of collateral.
- Amortization: The schedule on which a loan's principal is paid down through regular payments. The amortization period sets the payment size and can be longer than the loan's term.
- Personal guaranty: A signed promise by an individual, usually an owner, to repay a business or real estate loan personally if the borrowing company does not.
- Debt schedule: A table of every loan a business or borrower owes, showing for each the lender, balance, payment, maturity date and collateral.
- SBA 7(a) loan: SBA's main business loan program. A lender makes the loan and SBA guarantees part of it: up to 85 percent of $150,000 or less and 75 percent of more, on loans up to $5,000,000.
- SBA 504 loan: A fixed-asset financing in which a bank lends 50 percent or more, a certified development company funds up to 40 percent through an SBA debenture, and the borrower puts in at least 10 percent.
- Non-bank lender: A non-bank lender is a company that makes loans but does not take deposits, so it is not a bank, a savings institution or a credit union.
Sources
Every rule and outside figure above comes from one of these, opened on . Dates are the source's own. Figures from this site's data carry their own source and date beside them.
Next step: check the record
- Lenders for business loansBanks and credit unions by the business loans they hold. Equipment loans are inside that line.
- SBA 7(a) payment calculatorMonthly payment and fees for an SBA loan of a given size and term.
- Loan Comps for a business loanLenders that hold business loans in a state, and SBA loans near this size.
Keep reading
- SBA 7(a) payment calculator: Monthly payment with the FY2027 upfront guaranty fee, with the fee paid in cash or added to the loan.
- Amortization and balloon calculator: Payment, balance at maturity and interest paid, for a loan that amortizes over longer than it runs.
- DSCR calculator: Cash flow over debt service. Type the cash flow and the loan terms, see the ratio and the cushion before it falls to 1.00x.
- Deal summary builder: Turn the facts of a deal into a clean one-page summary you can copy or print. Nothing is saved or sent.
- Business line of credit package checklist: A line of credit pays for the gap between spending money and collecting it. The lender wants to see that the gap is real, that it closes, and what it can take as collateral while it is open.
- SBA 7(a) loan package checklist: A 7(a) package is the bank's usual file plus SBA's own list. Know which items SBA requires and you can have them ready before the first call.
- SBA 504 loan package checklist: A 504 project has three parties, two loans and a closing date set by a monthly bond sale. Build the package for all three.
- SBA 7(a) or 504: which fits your loan: Both are SBA loans, and they work differently. The choice usually turns on what you are buying and how much cash you can put in.
- What a lender-ready loan package looks like: A lender decides in minutes whether to keep reading. A package that answers the first five questions on one page, and backs each answer with a document, gets read.
- Global cash flow, explained step by step: A property can cover its loan while the people behind it cannot cover their other debts. Global cash flow is the test that looks at all of it at once.
- Farm loan package checklist: A farm lender reads a balance sheet, a production record and a cash flow budget. The land is the collateral. The crop or the herd is the repayment, and it comes in once or twice a year.
Questions people ask
How long can an equipment loan run?
A lender sets the term inside the equipment's useful life. For SBA 7(a) loans the SOP says equipment loans generally should not exceed 10 years, and may run up to 15 years if the IRS asset class useful life supports the term.
Can this site show me equipment finance companies?
No. No public file used here identifies equipment finance or leasing companies or their loans. Bank and credit union equipment loans are inside the business loan line of their filings and are not broken out.
What is the difference between a loan and a lease?
With a loan the business owns the equipment and the lender holds a lien. With a lease the lessor owns it and the business pays to use it, often with an option to buy at the end. How each is treated for tax and accounting depends on the terms, so ask your accountant.
Cite this
Source: The Lender Report, Equipment financing package checklist, https://lender.report/guides/package-checklist-equipment-financing/, data as of November 11, 2026.
General information, not legal, tax or credit advice. A lender's own policy decides what it will do; ask it for the policy in writing.
SBA does not require you to use an agent or broker for a loan application. SBA has not reviewed or endorsed this site.
Source and date appear beside each figure. Banks report balances, not loans made. Loans made come only from HMDA and SBA files. We do not audit filings and can make errors joining them. Report a problem