Equipment Financing
Capital structured against the value of specific equipment, either as a loan secured by the equipment or as a lease. Used for acquisitions, replacements, and capacity expansion.
Loan vs. lease
An equipment loan finances the purchase, with the equipment as collateral and the operator on title. A lease keeps title with the lessor and the operator pays for use, with options to purchase, return, or renew at end of term.
The right structure depends on tax treatment, useful life vs. financing term, expected residual value, and how the operator plans to redeploy the equipment over the next economic cycle.
Related Entries
See how this structure is used in practice.
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