Larkpine Lending Group, a small-business funding service in Iowa City, IA, explains equipment financing and leasing: loans and leases secured by the equipment they buy. The page covers used equipment, restaurant and contractor equipment, leasing versus buying, typical terms and what partners want to see on a quote.
| What it is | A loan or lease for a specific item |
|---|---|
| Secured by | Usually the equipment |
| Construction employer sites, Johnson County, IA, CBP 2023 | 379 |
| Full- and limited-service restaurants (2023) | 281 |
| Decision made by | The funding partner |
How to get a small business loan for equipment, quote first
Start with a written quote. Partners finance a specific item, so they need the make, model, year, condition, price and seller. From there they read the business's revenue, time in business and existing debts, and decide whether the item supports the amount.
Equipment loan requirements partners usually read
- The quote or invoice, with serial number for used items
- Years in business and revenue
- Existing equipment payments
- Whether a down payment is offered
Used equipment financing
Used equipment can be financed, though partners often lend a smaller share of the price or set a shorter term, because older items have less resale value. An inspection report, service records and the seller's details help. Private-party sales are possible with some partners; a dealer sale comes with a written quote to work from.
Illustration only, not an offer: an auto shop buying a used two-post lift for $6,500 with $1,500 down finances $5,000. A shorter term means higher payments but less total cost; ask for both versions.
Restaurant equipment and contractor equipment
Restaurant equipment, from ranges and hoods to cold rooms and dish machines, can be financed as a package when a kitchen opens or is rebuilt. The commercial kitchen equipment list groups kitchen equipment by the job each item does, and the restaurant page covers the rest of a kitchen's cash cycle.
Contractor equipment includes trucks, trailers, skid steers, compressors and specialty tools. How to finance heavy equipment comes down to the same quote-first approach; partners look harder at hours, age and resale for larger machines. The construction page covers trades in more detail.
Lease or buy business equipment: how to weigh it
| Equipment loan | Lease | |
|---|---|---|
| Who owns it | The business, subject to the lien | The leasing company until the term ends |
| At the end | You own it outright | Hand it back, extend or buy it out |
| Fits | Long-lived items | Items that date quickly or need upgrading |
| Tax treatment | Ask your accountant | Ask your accountant |
How do equipment leases work? You pay to use the item for a set term. Some leases end with a nominal buyout; others with a fair-market-value option. Read the end-of-lease terms before signing.
How long an equipment financing loan runs
Partners set terms, and they usually relate to the item's useful life: shorter for computers and tablets, longer for heavy machinery. We cannot quote typical ranges. Ask for a term that ends before the item wears out.
Types of equipment financing
- Equipment loan: you own the item; the partner holds a lien.
- Capital or finance lease: structured like a purchase over time.
- Operating lease: you use the item and return it.
- Sale-leaseback: you sell owned equipment to a partner and lease it back.
Where equipment requests come from locally
Johnson County, IA had 379 construction employer establishments, 281 full- and limited-service restaurants, 67 auto repair shops and 59 landscaping companies in 2023 (County Business Patterns 2023). Each relies on equipment that wears out on its own schedule.
See the Iowa City, IA page for county figures, the industry pages for sector notes, or compare all six structures.
By Larkpine Lending Group · Updated