Financing types
The machine pays for itself over time. The financing should run on the same clock.
Equipment financing pays for a truck, machine or system, usually with the equipment itself as collateral. You repay over time while the equipment works. The Business Funding Club refers you to ROK Financial. ROK and the lenders it matches you with review every request and make every funding decision.
A referral club, free to apply. ROK Financial and its lenders review every request and make all funding decisions. How we’re compensated.
Prefer to go straight to the funder? You can apply on ROK's own site. It carries our referral ID.
By Marcus L. Barber, Publisher · Reviewed by Marcus before publishing · Updated · How we write and check facts
What it is
Equipment financing comes in two main forms. With a loan, you finance the purchase, repay principal and interest on a schedule, and own the equipment at the end. With a lease, the lessor owns the equipment while you pay to use it, and many leases are lease-to-own[1]. Either way, the equipment usually serves as the main collateral. New York's disclosure law treats equipment financing that is not a true lease as closed-end financing, the same category as a term loan[2].
Where it fits
- A specific piece of equipment with a quote: a tractor, a dump truck, a lift, a dental chair, a walk-in cooler.
- Equipment that will earn its keep on work you've already won, such as a second truck for a signed hauling contract.
- Replacing aging equipment before repair bills and downtime cost more than the payment.
- Keeping cash and credit lines free for payroll and materials.
When it’s the wrong tool
- Equipment that will be out of date before it's paid off. Match the payoff to the useful life.
- Working capital. Equipment financing pays for the equipment, not the fuel, wages or materials to run it.
- Small tools you could buy from cash flow without strain. Fees and paperwork can outweigh the benefit.
- A lease you don't understand at the end. If you can't say what happens on the last day of the lease, don't sign yet.
Ask before you sign
- Is this a loan or a lease? If it's a lease, is the buyout at the end a fixed amount or fair market value?
- What is the total dollar cost, including documentation fees, required insurance and any end-of-lease charges?
- Is the lien only on this equipment, or on all business assets? Is a personal guarantee required?
- Can I pay off early, and what does that cost?
- Who is responsible for maintenance, insurance and repairs while the financing is in place?
- Do payments start before the equipment is delivered and working?
Loan or lease: what changes
| Equipment loan | Equipment lease | |
|---|---|---|
| Who owns it during the term | You do. The lender holds a lien. | The lessor does. You pay to use it. |
| At the end | You own it outright. | Depends on the lease: buy it, return it, or renew. |
| What to watch | Prepayment terms and liens beyond the equipment | The buyout amount and return conditions |
Section 179 and taxes
Federal tax law lets a business elect a Section 179 deduction, instead of depreciation deductions, for certain property, including tangible business equipment. IRS Publication 946 sets out which property qualifies, the business income limit, and when the deduction must be recaptured[3]. Property counts as placed in service when it is ready and available for its use[3].
Under IRS basis rules, the cost of property includes amounts paid with debt obligations, so financed equipment can count[3]. Whether a lease changes the treatment depends on how the deal is written.
Talk to your tax preparer
Neither the Club nor ROK gives tax advice. Ask your tax preparer before you sign, and don't buy equipment only for a deduction.
What ROK lists for this product
ROK says its equipment financing can cover almost any tangible business asset, including medical equipment, office furniture, production equipment and technology. Its review considers time in business, credit, equipment type, annual revenue, industry and location[1].
ROK's general application lists at least 4 months in business and $10,000 or more in monthly gross sales ($120,000 a year)[4]. ROK's equipment page says it sets no minimum time in business or monthly sales for this product, and that it caps the amount for companies under two years old[1]. Where those differ, the review of your request by ROK and its lenders decides. Lenders commonly ask for the equipment quote or invoice, seller details, and recent bank statements.
Industries where it comes up
By industry, in more depth
ROK Financial lists this product on its own site. Read ROK’s page
Common questions
Do I need a down payment for equipment financing?
It depends on the lender, the equipment and your business. Some deals ask for one and some don't. If an offer requires a down payment, ask whether a larger one lowers the total dollar cost, and keep enough cash back for the costs of putting the equipment to work, such as transport, installation, training and insurance.
Can I finance used equipment?
Often, yes. ROK lists equipment type among the factors in its review[1], and lenders usually want details on age, condition and hours or mileage for used equipment. Have the seller's information, serial or VIN numbers and photos ready. Older equipment may be financed over a shorter schedule.
Does Section 179 make equipment free?
No. A deduction lowers taxable income. It does not refund the price of the equipment, and it has limits set out in IRS Publication 946[3]. The equipment still has to earn more than it costs. Talk to your tax preparer about your own situation before you sign anything.
What will ROK want to see?
Lenders commonly review the equipment quote or invoice, recent bank statements, time in business, revenue and credit. ROK lists these and other factors, including industry and location[1]. For a large purchase, a contract showing the work the equipment will do helps explain the request. ROK and its lenders decide what they need.
Does it cost anything to apply through The Business Funding Club?
No. The Business Funding Club is a free referral club, not a lender or a broker. We refer your request to ROK Financial. ROK and the lenders it matches you with review it and make the decision. ROK pays Digital Solomon when a referred business is funded. You never pay the Club anything, and you don't have to accept any offer.
Sources
- Get Equipment Financing For Your Small Business ROK Financial, checked October 16, 2026
- New York Financial Services Law Section 801: Definitions (Commercial Financing) New York State Senate, checked October 16, 2026
- Publication 946 (2025), How To Depreciate Property Internal Revenue Service, checked October 16, 2026
- Business Financing application (ROK Financial partner page) ROK Financial, checked October 16, 2026
Before you start
What ROK looks for.
Stated plainly so you don’t spend time on a form that isn’t built for your business yet. These are the minimums ROK lists on its partner application. Meeting them is the starting line, not a decision.
- 4 monthsminimum time in business
- $10,000minimum monthly gross sales
- U.S.based and operating
Credit history is one input among several. ROK reviews the whole picture: revenue, deposits, time in business, and what the money is for. What to have ready.
A referral club, free to apply. ROK Financial and its lenders review every request and make all funding decisions. How we’re compensated.
Prefer to go straight to the funder? You can apply on ROK's own site. It carries our referral ID.