Are Equipment Finance Agreements (EFAs) A Fit For Your Business?

How Equipment Finance Agreements Work

Before signing an equipment finance agreement, identify the asset you want to finance. This can be a truck, trailer, combine, skid steer, or any other machinery that you prefer not to or cannot pay for upfront. Lenders then review your application, which includes equipment details, seller information, and your business and financial profile, before providing financing terms.

Types of Equipment Finance Agreements

EFAs can be structured in different ways depending on a qualifying borrower’s goals, their plans for using the equipment, and whether the asset is being purchased or already owned.

Purchase Financing
- Applicable when you buy new or used equipment and want to spread the cost over time instead of paying the full purchase price upfront. With CurrencyFinance, you can either finance equipment you buy on traditional marketplaces or get funds ahead of an auction.
Equipment Refinancing
- Applicable when you already own the equipment and want to use the equity in that asset to access working capital or restructure existing debt.
Sale-Leaseback Financing
- Applicable when you sell owned or recently purchased equipment to a financing provider and continue to use it while making fixed payments over an agreed term.
Structured Payment Financing
- Applicable when payments are customized around your business’s cash flow, such as seasonal, deferred, or step-up payment schedules.

"Equipment finance agreements can be a practical option for businesses to acquire essential equipment without the burden of a large upfront purchase. Unlike traditional lease structures, EFAs can help buyers finance equipment while working toward ownership."

Kenny Segin, Currency Director

What Equipment May Qualify for EFAs?

Equipment finance agreements may be available for a wide range of new and used equipment, depending on the asset, lender requirements, and borrower qualifications. Common examples include:

Commercial and service trucks , trailers , and some powersports vehicles
Farm equipment such as tractors, combines, and seeders
Construction machinery such as excavators, skid steers, and telehandlers
Mowers, golf carts, and other groundskeeping equipment
Tree service and landscaping machinery, such as chainsaws, wood chippers, chipper trucks, and stump grinders.

Eligibility may depend on factors such as equipment age, condition, value, intended use, and seller information.

Who Uses Equipment Finance Agreements

Businesses across agriculture, construction, commercial trucking, and other equipment-heavy industries rely on EFAs to finance the assets that keep their operations moving. Equipment finance agreements can support companies at different stages of growth, from local entrepreneurs to established organizations with large fleets.

New and small businesses
- EFAs can help companies with limited working capital acquire mowers, service trucks, seeders, and other equipment without a significant upfront investment. A small family farm, for example, can replace an outdated tractor with a new one, preserving cash flow for other operational necessities.
Expanding businesses
- Growing businesses may use equipment financing agreements to expand their operations or acquire additional or newer equipment. A consumer transportation company expanding into new shipping routes may finance additional semi-trucks and trailers through structured payment financing that align with its seasonal cash flow.
Established businesses
- For established companies, EFAs are a strategic way to upgrade equipment, replace aging assets, or add newer technology while preserving working capital. For example, a construction company may finance a new excavator to support upcoming projects without tying up cash that could be used for payroll, materials, or other business needs. Depending on the business and its assets, companies may also be eligible for ownership-related tax deductions. Consult a qualified tax professional to understand what may apply.

Want to see what kind of equipment financing agreement fits your equipment needs? Contact the CurrencyFinance to review how an EFA can benefit your business.

What’s The Difference Between EFAs, Traditional Loans, And Equipment Leases

EFAs, traditional business loans, and equipment leases are all viable options for acquiring essential equipment, but they differ in fundamental ways you should consider when choosing the best financing path forward.

Factor

Equipment Finance Agreement

Traditional Business Loan

Equipment Lease

Best fit

Businesses that want to finance equipment while working toward ownership.

Businesses that need broader funding flexibility or want to purchase equipment with loan proceeds.

Ownership

Your business typically owns the equipment from the start, subject to the agreement terms. Your business may own the equipment if loan funds are used to purchase it outright. The leasing company typically retains ownership unless you buy out the lease or exercise a purchase option.

Your business may own the equipment if loan funds are used to purchase it outright.

The leasing company typically retains ownership unless you buy out the lease or exercise a purchase option.

Asset status

Equipment is typically listed as a business asset, and the EFA is treated as a liability.

The purchased equipment may be listed as a business asset, while the loan is treated as a liability.

Lease payments are normally treated based on the lease structure and applicable accounting rules.

Depreciation

You may be able to claim depreciation and tax benefits like Section 179, depending on eligibility.

You may be able to claim depreciation if the loan is used to purchase qualifying equipment.

The leasing company may claim depreciation, depending on the lease structure.

Usage flexibility

You can typically use, modify, and maintain the equipment with more flexibility, subject to the agreement terms.

Usage flexibility depends on the loan terms, collateral requirements, and any lender restrictions.

A lease may place restrictions on equipment use, maintenance, mileage, hours, or modifications.

Upfront costs

A down payment may or may not be required, depending on the lender, equipment, and applicant profile.

A traditional loan may require a down payment, collateral, or other borrower qualifications.

Many leases don’t require a large down payment, but they may cost more over time if you use the equipment for an extended period.

Not sure which equipment financing solution fits your business? Contact the CurrencyFinance team to review your options.

Benefits Of Financing Equipment With An EFA

Spreading payments over the period specified in the equipment finance agreement may be a practical solution for businesses looking to purchase machinery but not having enough resources to do so outright. Some of the main benefits of EFAs may include:

Cash Flow Preservation

Avoid large, upfront cash outlays and preserve working capital for greater operational flexibility.

100% Equipment Financing

Depending on your financial situation and the lender, you may qualify for 100% financing with no down payment required.

Tax Advantages

EFAs may qualify for significant tax advantages, including a Section 179 deduction and bonus depreciation for your eligible equipment.

Flexible Payment Terms

Depending on the lender, it may be possible to structure repayment schedules according to your business’s peak cash flow periods.

Fleet Modernization

Stay competitive by financing modern, more reliable equipment with the latest technologies and features.

Ready to explore EFA options for your next equipment purchase?

What to Consider Before Applying For An Equipment Finance Agreement

While signing an equipment finance agreement of any kind is a practical path to equipment ownership preferred by many qualified borrowers, understanding how it can affect your daily operations is essential. Before you decide to commit to an EFA as your financing solution, make sure to review the factors that may determine the outcome of your financing journey:

Equipment Eligibility

Not all equipment may qualify for an EFA. Lenders will look at the asset’s age, condition, value, intended use, and other metrics to determine eligibility.

Fixed Payments

EFAs typically include predictable payments over an agreed term, so make sure your business can make them on time, no matter what other operating costs come up.

Equipment Ownership Costs

Because EFAs are generally tied to asset ownership, you may be responsible for the equipment’s operating, maintenance, insurance, and other costs.

Long-Term Fit

EFAs often make the most sense if you plan to use the financed asset for a minimum of several years. If you only need equipment for a short time, consider leasing or renting.

Tax Treatment

EFAs may offer depreciation-related deductions for eligible assets, but tax advantages may vary. Consult a qualified tax advisor to understand what treatments apply to your business.

Take the next step toward equipment ownership. Learn how to apply for and secure an equipment finance agreement through CurrencyFinance.

How To Apply And Secure An EFA Through CurrencyFinance

CurrencyFinance has helped thousands of U.S. and Canadian buyers acquire funding to purchase new and pre-owned heavy equipment. Here’s what to expect when applying for an equipment finance agreement through CurrencyFinance:

Identify the equipment you want to purchaseStart by gathering key details about the asset you want to finance, including the seller, estimated cost, condition, and intended use.
Review your financial situationConsider your budget, current cash flow, existing debt obligations, and how the equipment you’re looking to finance will support your daily operations.
Gather the documents lenders may requireDepending on the lender, you may need to provide business details, financial information, equipment documents and seller contact details, as well as other supporting materials.
Submit your online EFA applicationUsing our simple and secure financing application process, provide all necessary information and documentation.
Review available lender optionsCurrencyFinance team will review your submission and identify potential financing paths. If lender options are available, we will help you connect with trusted lenders whose terms fit your needs.
Finalize your equipment financing agreementIf approved, review available terms, complete required documentation, and work with our dedicated professionals and your lending partner to address questions about funding, repayment terms, and any other concerns you may have.

“An equipment finance agreement should make the purchase path easier to understand. We help buyers look at the equipment, their budget, and available lender requirements so they can move through financing with a clearer picture of the agreement they are considering.”

Jared Koch, Currency Manager

Your next equipment purchase starts with the right financing option. Contact the CurrencyFinance team or submit your online application today.

Use Equipment Finance Agreements To Fund Your Next Purchase

Own the machinery your business needs while preserving cash flow.

How Equipment Finance Agreements Work

Types of Equipment Finance Agreements

Purchase Financing

Equipment Refinancing

Sale-Leaseback Financing

Structured Payment Financing