Need Capital for Automation or Major Equipment? Match the Funding to the Asset

Automation, production machinery and other major equipment can improve capacity, but large fixed-asset purchases can also create substantial capital requirements. Businesses planning these investments should evaluate financing before committing cash to the purchase.

Equipment financing appears among the business funding categories identified in Thomas Abelsen’s funding guide. For larger long-term fixed assets, SBA 504 financing may also be relevant because the program is designed primarily for commercial real estate, large equipment and other long-term fixed assets.

Typical SBA 504 requirements include operating a for-profit business, staying within applicable SBA financial limits, demonstrating repayment ability and providing a down payment that commonly ranges from approximately 10% to 20%.

Before seeking financing, owners should know the equipment cost, required capital amount, expected business benefit and available owner contribution. Funding providers may also evaluate personal credit, annual revenue, cash flow and existing debt obligations.

If your business is preparing to purchase machinery, technology infrastructure or other major equipment, connect with EIN Business Funding to explore equipment-related financing options.

FAQs

Can business financing be used for major equipment?
Yes. Equipment financing is one identified business funding category, and SBA 504 financing is designed primarily for large equipment, commercial real estate and other long-term fixed assets.

What down payment may SBA 504 financing require?
The funding guide identifies a typical range of approximately 10% to 20%.

What should a business prepare before seeking equipment financing?
Owners should know the equipment cost, requested financing amount, intended business use, available contribution, revenue, credit profile, cash flow and existing debt.