Equipment financing funds business equipment through a loan, an equipment finance agreement or a lease, usually secured by the equipment itself. Oakridge Business Loans, a small-business funding broker in Bellingham, WA, helps Whatcom County contractors, restaurants, retailers and practices compare these structures and request them from lending partners, which make credit decisions and set rates and terms.
| Suited to | Assets used for several years |
|---|---|
| Structures | Equipment loan, equipment finance agreement (EFA), lease |
| Lease end options | Fair market value purchase, $1 buyout, return or renew |
| Security | Usually the equipment itself |
| Whatcom County context | 972 construction employer establishments, the most of any sector (Census CBP 2023) |
| Office | 1302 Commercial St, Bellingham, WA 98225 · (360) 370-4248 |
Three ways to finance a machine
| Equipment loan | Equipment finance agreement | Lease | |
|---|---|---|---|
| Who owns it | Your business, with a lien attached until payoff | You, from the start | The lessor, until any buyout |
| Payments | Principal and interest | Fixed payments, often without a stated rate | Payments for the right to use it |
| End of term | Lien released | Lien released | Buy, return or renew, depending on the lease |
| Down payment | Often required | Sometimes required | Sometimes first and last payment |
An equipment finance agreement (EFA) looks a lot like a loan, but it is written as a contract with a fixed payment stream and frequently no stated interest rate, so you compare it by the total of payments. Leases are different again: the payment is for use of the asset, and what happens at the end depends on the buyout option.
FMV lease versus a $1 buyout lease
A fair market value (FMV) lease lets you use the equipment for the term and then buy it at its market value at that time, return it or renew. Payments are lower because you are not paying for the whole machine. It suits equipment that becomes outdated quickly, such as POS terminals, computers or some medical imaging.
A $1 buyout lease works more like a purchase: higher payments, and at the end you own the equipment for a nominal dollar. It suits equipment you plan to keep for its whole working life, like a mini excavator, a skid steer or a walk-in cooler.
To compare the two, add up every payment in each option, then add the expected buyout to the FMV total. The difference tells you what the lower FMV payments really save, and what owning at the end is worth to you. For a loan-style payment estimate on the same amount, the loan payment calculator works out the monthly figure; the lease totals are a by-hand step.
Lease buyouts
If you are near the end of a lease and want to keep the equipment, ask the lessor for the buyout figure in writing, along with any fees for ending the lease. An FMV buyout price is set by the lessor's valuation, so it is worth checking against listings for similar used equipment. Financing a buyout is possible with some partners, but the equipment's age and remaining life will weigh on the decision.
Used equipment and work vehicles
Used equipment can be financed, but partners look harder at age, hours, condition and resale value, and terms are often shorter than for new equipment. A bill of sale or dealer invoice, the serial number and photos help. Private-party sales take more paperwork than dealer sales, since the partner needs to confirm title and that no existing lien sits on the machine.
Contractor vehicles such as pickups with service bodies, dump trucks used on the contractor's own jobs and trailers can often be financed as equipment. We do not arrange financing for trucking or freight-hauling businesses.
What Whatcom County, WA businesses finance
Construction had more employer establishments than any other Whatcom County sector in 2023, with 972, and the largest payroll, about $816.5 million (U.S. Census Bureau, County Business Patterns 2023). Excavators, compact track loaders, skid steers and work trucks are the obvious assets there; the contractor page covers them in detail.
The county's 446 restaurant employer establishments (U.S. Census Bureau, County Business Patterns 2023) finance ranges, hoods, refrigeration and dish machines; the restaurant page covers kitchen and POS equipment. Retailers finance fixtures, coolers and point-of-sale systems, as the retail page explains. Medical and dental offices finance chairs, imaging and sterilization equipment; Whatcom County had 99 dental office employer establishments in 2023 (same source), and the sector overview includes a medical and dental section.
What partners review
Expect to provide the equipment quote, recent bank statements, and for larger amounts financial statements and tax returns. Partners consider the equipment itself (type, age, resale value), the business's revenue and existing debt, time in business and owners' credit. When a machine is expected to outlast several years of payments, a term loan is also worth comparing. County business figures and how a request works fill in the rest.
By Oakridge Business Loans · Updated