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Equipment Financing

Equipment loans can help small businesses finance large pieces of equipment like vehicles or heavy machinery.

Disclaimer: These are general qualifications. Other information might be considered during your application.
What is Equipment Financing? detail-img

One of the types of equipment loans that you can use to purchase new business equipment right away, by using that equipment as collateral, is Equipment Financing.

What Do I Need to Qualify? detail-img

11+ months in business 600+ credit score $100,000+ in annual revenue

How Do I Apply with Orumfy? detail-img

Apply Here for Equipment Loans

Dan Debelis “statement about help” send my questions
Calculate your potential tax savings

with section 179 “business vehicle deductions”

Overview

Overview

Equipment loans can help small businesses finance large pieces of equipment like vehicles or heavy machinery.

Equipment loans are generally secured by the equipment that’s being purchased only, meaning you will not need to present the lender with additional collateral, like a home. Equipment loans can be used to replace existing equipment or to buy new equipment as your small business grows.

Your choice of equipment leasing or equipment financing products for asset acquisition is directly related to the tax and accounting implications for your business.

Equipment financing and equipment loans can provide tax and accounting advantages that can benefit a company's efficiency and overall profitability.

The terms and amount for equipment loans will depend on the type and the life expectancy of the equipment.

At Orumfy, our equipment financing and equipment leasing experts specialize in helping business owners get the equipment they need to meet their company goals.

What is Equipment Financing or Equipment Loan

Each lender will have different terms, but in general with equipment loans, you can finance around 80% of the total purchase price of the item. When choosing to buy your equipment through equipment financing, you own the item from day one. A down payment of around 20% is generally required for most small business equipment loans. The collateral for the loan is the item or items you purchase with equipment loans.

Max Advance Amount
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Up to 100% of equipment value
Term
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Expected life of equipment
Factor Fee
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8 - 30%
Speed
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As little as 2 days
  • product-img
    Maximum Loan Amount Up to 100% of equipment value
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    Term Expected life of equipment
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    Factor Fee 8 - 30%
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    Speed As little as 2 days
Types Capital Lease/Finance Lease/$1 BuyOut TRACK Lease Lease Back True Lease or Operation Lease The "PUT" Option lease
Description These leases share the advantage of fixed monthly payments, but with the guaranteed option to purchase the equipment for a nominal price of $1 at the conclusion of the lease. A TRAC lease is a special type of true lease that is generally used for “over-the-road” vehicles like trucks, tractors and trailers. Sale/Leaseback financing is a unique and effective method for generating capital for your business needs. You can use your equipment to get operating capital for your business. This is where the company/lessee is not 100% sure if they want the equipment. They lease it for a certain period of time, and at the end of the lease, they can either 1) Buy the equipment at fair market value; 2) Give the equipment back; or 3) re-lease the equipment. Otherwise known as "Purchase Upon Termination" lease. This end-of-lease option establishes a mandatory purchase price, usually expressed as a percentage, e.g. “a 10% Put.”
The lessee is considered the owner of the equipment and maintains full control of the residual value. This type of lease is generally less expensive than other leases or conventional bank financing. With a Sale/Leaseback you can use your equipment as collateral to obtain working capital, so productivity never slows down, and your revenue should remain constant. The extra capital you get can be applied to expanding your business and increasing revenue as it can be used for any purpose. This is a lease where the company is shielded from the drawbacks (and benefits) of ownership. These leases are better for equipment such as technology, which may have a short shelf life, or equipment the company doesn’t want to retain past the term of the lease, etc.
Advantages Lessee records the equipment as an asset and the lease payments as liabilities on their balance sheets. The Lessor would retain the rights to any depreciation. More capital is freed up for businesses that do a Sale/Leaseback because the equipment is no longer being financed at a regular bank, nor is it cutting into the lines of credit you have with the banks. You can use those extra lines of credit to expand your business the most effective way possible. A significant benefit is that the monthly payments are also less than on a finance type lease or even a bank loan. This end-of-lease option establishes a mandatory purchase price, usually expressed as a percentage, e.g. “a 10% Put.” This is a technique for lowering the lease payments during the lease term without creating an unknown end-of-lease risk for either the Lessor or the lessee
The most notable feature of this type of lease is that its structure does not contemplate a full payout of the cost of the equipment as is the case in a “Finance” type lease
Tax Benefits The lessee can depreciate the equipment. Up to $500,000 of cost of equipment can be deducted in 1st year. Depends on if it is written as a capital or operating lease. The monthly payment is 100% tax deductible. There is also the balance sheet benefit because having assets that you pay taxes on converted into contingent liabilities may also lower taxes. Monthly rental payments can be deducted as an operating expense The lessee can depreciate the equipment. Up to $500,000 of cost of equipment can be deducted in 1st year

What can you FINANCE

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Computers, software, phone systems and IT equipment
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Energy equipment, including Solar PV
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Medical equipment
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Corporate aircraft
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Printing presses and computer-aided design systems
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Office furniture and cash register systems
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Specialty commercial and municipal vehicles

How it can help your business?

How Equipment Financing with Orumfy will help your business

  • Equipment financing may be fully tax deductible
  • Some terms offer the benefits of ownership by allowing depreciation and interest expense deductions
  • Avoid large down payments and preserve bank lines of credit
  • Orumfy will arrange affordable monthly payments to suit your cash flow Can include soft costs such as shipping, installation and training with 100% financing (100% financing plans bundle shipping, installation, training and support into one plan).
  • Match contract terms to the equipment’s expected useful life
  • Choose end-of-term options that work for you, including ownership or equipment return
  • Keep pace with technology through equipment replacement and upgrades
  • Maximize productivity by using the latest equipment now
  • Orumfy will design an equipment financing plan that fits your business needs and objectives
Grow your business with Orumfy today! lets get started

Things to Consider

Things to Consider for Equipment Financing with Orumfy

Equipment Leasing vs. Equipment Financing

In most cases Equipment Financing and Equipment Leasing are very similar types of equipment loans.

Tax and accounting considerations for your business, will play an important role in choosing between equipment financing and equipment leasing.

When you purchase equipment using equipment loans you own that piece of equipment. Equipment loans help extend the payments over several years. Over the term of the loan you pay back both principal and interest.

If you are able to repay the equipment financing loan off early, you will reduce the amount of interest you pay, and there is no prepayment penalty.

However you will not save on the interest by paying off the lease early.

Equipment leasing is a type of a long term arrangement, when you don’t own the equipment.

Whether you are a logistics company, restaurant or a medical office, having the right equipment can make or break your business.

At Orumfy, our equipment financing and equipment leasing experts specialize in helping business owners get the equipment they need to meet their company goals.

How do you qualify for Equipment Financing?

How Do I Qualify for Equipment Financing with Orumfy

Orumfy strives to make it as simple as possible for businesses to qualify for the equipment financing they need. All you need to qualify is:

  • A positive credit history.
  • Bank and credit card statements that cover a number of months (the exact number may vary).
  • Profit and loss statements.
  • Balance sheets.

How does it work?

How does it work?

The process with Orumfy is simple:

  • Orumfy offers a free and quick application for equipment loans (you can also download our application here).
  • Review your offers with Orumfy.
  • Provide the necessary documents.
  • Receive Contracts.

What are my tax savings with Section 179 deduction?

Section 179 of the IRS Tax Code allows a business to deduct, for the current tax year, the full purchase price of financed or leased equipment and off-the-shelf software that qualifies for the deduction. The equipment purchased, financed or leased must be within the specified dollar limits of Section 179, and the equipment must be placed into service in the same tax year that the deduction is being taken (for example, the equipment must be put into service between January 1st and December 31st of the year the deduction is to be taken.)

This tax break encourages small businesses to invest in themselves and to purchase equipment sooner rather than later.

  • There are some limits, however, to the amount that can be written off ($500,000 in 2016).The Section 179 deductions decrease dollar for dollar on purchases over $2 million. After the Section 179 benefits are exhausted; Bonus Depreciation of 50% can be taken on the remaining amount of equipment place into service.
  • Section 179 was designed with businesses in mind. That's why almost all types of "business equipment" that your company buys or finances qualifies for the Section 179 deduction.
  • Equipment (machines, etc) purchased for business use
  • Tangible personal property used in business
  • Business Vehicles with a gross vehicle weight in excess of 6,000 lbs (Section 179 Vehicle Deductions)
  • Computers
  • Computer “Off-the-Shelf” Software
  • Office Furniture
  • Office Equipment
  • Property attached to your building that is not a structural component of the building (i.e.: a printing press, large manufacturing tools and equipment)
  • Partial Business Use (equipment that is purchased for business use and personal use: generally, your deduction will be based on the percentage of time you use the equipment for business purposes).

Section 179 Calculator

SECTION 179 calculator

Value of Equipment: $ 100,000
$10,000 $500,000
Estimated Lifetime: 18 years
1 Year 20 Years
Marginal Tax Rate: 35 %
1% 80%
Section 179 Deduction
  • Estimated tax savings year 1
  • Lifetime Benefits
  • $33,056
  • $35,700

Calculate your potential tax savings!

Whether you are a logistics company, restaurant or a medical office, having the right equipment can make or break your business.

Aurmfi is here to help you

Calculate your potential tax savings!

Whether you are a logistics company, restaurant or a medical office, having the right equipment can make or break your business.

Aurmfi is here to help you

Apply to see what is Your small business loan options today!
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