Equipment financing is a specialized business funding method for acquiring machinery and tools crucial for operations. Here are its key traits:
- Purpose-focused: Specifically for obtaining business-related equipment.
- Equipment as collateral: The purchased equipment serves as loan collateral.
- Flexibility in terms: Offers varied repayment schedules aligning with cash flow.
- Ownership options: May allow purchase at term end or a buyout at fair market value.
Benefits include preserving working capital, accessing updated technology, and predictable payments.