Equipment financing is the best-fit product: the equipment itself serves as collateral, so lenders often finance up to 100% of the cost with terms matched to the asset's useful life. SBA 504 loans suit large, long-life equipment; term loans work when you want to own the asset outright without an equipment-specific structure.
Equipment financing is structured around the asset you're buying. Because the equipment secures the loan, lenders can often advance up to 100% of the purchase price and set the repayment term to roughly match the equipment's useful life — 3 to 7 years for most machinery, longer for heavy equipment or real-property fixtures. This self-collateralizing structure usually means easier qualification than an unsecured loan of the same size, since the lender can repossess and resell the equipment if the loan defaults.
An equipment loan finances a purchase: you own the asset, build equity, and can claim depreciation. A lease lets you use the equipment for a fixed term with lower upfront cost and the option to buy, renew, or return at the end. Loans favor equipment you'll use for years (you keep the residual value); leases favor fast-obsolescing equipment (technology, vehicles you cycle) where you'd rather not hold the depreciation risk.
For large, long-life equipment bought alongside real estate or a facility build-out, an SBA 504 loan provides long amortization at competitive fixed rates. A conventional term loan works when you want to own the equipment outright and prefer a single general-purpose loan over an equipment-specific facility. The IRS Section 179 deduction can let you deduct the cost of qualifying equipment placed in service, up to an annual limit — a tax consideration that often shapes the buy-vs-lease decision.
A bakery needs $120,000 for a new commercial oven and mixer line expected to last 10 years. Equipment financing matched through ClearValue Lending advances the full $120,000 secured by the equipment, with a 7-year term so payments track the revenue the equipment generates. The owner applies once at ClearValue Lending and is routed to a single matched lender.