Equipment Financing

Where this product fits

Equipment financing is one of the most transformative products in the non-bank lending space. Nearly 80% of U.S. businesses use some form of equipment financing, and over 54% of all equipment acquisitions are financed rather than purchased outright (ELFA). The $1.3 trillion equipment finance industry exists because most businesses simply cannot afford to tie up hundreds of thousands in cash for productive assets.

Verified Case Studies

1. TYR Tactical (Peoria, AZ) — Defense Manufacturing (HIGH CONFIDENCE — SEC-verified)

Financed specialized press machines (7,700 tons, 22,000 PSI) through First American Equipment Finance
Brought ballistic plate manufacturing in-house, enabling entirely new product lines
Built 76,000 sq ft new HQ, hired 125 new workers
Grew from a 2010 startup to a $175M acquisition by Cadre Holdings (January 2026, SEC-filed)
Serves FBI, DEA, Secret Service, NYPD
Sources: First American Case Study, KTAR News, Cadre Holdings SEC Filing

2. AutoCrib (Tustin, CA) — Industrial Vending/Manufacturing (HIGH CONFIDENCE)

SBA 504 Loan, $7.75M total project cost for 58,000 sq ft facility
Added 20 employees to a team of ~100
Consolidated from 3 separate buildings into one manufacturing hub
Sources: TMC Financing

3. Erie Molded Packaging / EMP Closures (Erie, PA) — Plastics Manufacturing (HIGH CONFIDENCE)

$4M+ equipment financing through First American (relationship since 2018)
4 new injection molding machines, 2 high-speed lining machines, automation, ERP software
40+ year old company rebranded to reflect expanded capabilities
Sources: First American Case Study, Plastics News

4. Hart Food Products (Paramount, CA) — Food Manufacturing (HIGH CONFIDENCE)

Used SBA 504 program multiple times through TMC Financing
First 504 loan in 2009 for a 6,500 sq ft property, second 504 loan six months later for 3,000 sq ft expansion, then 2020 504 equipment loan for new production machinery
New bagging and scale machines tripled production output
Now pursuing a 4th SBA 504 loan for expansion to another location
Source: TMC Financing

5. Dental Practice Expansion — Implant Dentistry (MODERATE CONFIDENCE — scenario-based)

General dentist needed CBCT cone beam scanner ($95K), implant surgery kit ($12K), and training ($8K)
Equipment financing covered the scanner over 48 months, preserving working capital
Within 8 months: placing 6-8 implants/month at $4,200 average case revenue = $25K-$33K in new monthly revenue
Equipment payments are a fraction of the new revenue generated
Source: PEAC Solutions

Key Patterns

Capability expansion (not just capacity): TYR Tactical and the dental practice didn't just do more of what they already did — they unlocked entirely new revenue streams
Cash flow preservation: Every case study shows businesses choosing financing to preserve working capital even when they could have paid cash
Speed as competitive advantage: In trucking/logistics scenarios, the 1-2 week funding timeline is often the difference between winning or losing a contract
Stacking over time: Hart Food Products shows the power of building multiple financing relationships over a decade

Documentation Required for Full Underwriting

Documentation is tiered by deal size — this is the single most important thing to understand as a broker. The threshold where lenders shift from app-only to full documentation determines the entire workflow.

Tier 1: Application-Only (Under ~$150K-$250K, 620+ FICO)

Document	Required?	Notes
1-page application	Yes	10-20 minutes to complete
3 months bank statements	Yes	Some lenders accept 1 month
Equipment vendor quote	Yes	Must include manufacturer, model, serial number
Government-issued photo ID	Yes	All owners 20%+
Voided check	Yes	For ACH setup

Decision timeline: Same-day to 48 hours

Tier 2: Lite-Doc ($150K-$500K)

Everything in Tier 1, plus:

Document	Required?	Notes
2 years business tax returns	Yes	Complete with all schedules
2 years personal tax returns	Yes	All owners 20%+
Interim P&L and balance sheet	Yes	Within 60-90 days of application
Personal financial statement	Yes	SBA Form 413 format common
Debt schedule	Yes	41% of denials cite "too much debt" (First Business Bank)

Decision timeline: 3-7 business days

Tier 3: Full Documentation ($500K+)

Everything in Tiers 1 and 2, plus:

Document	Required?	Notes
3 years business tax returns	Yes	CPA-prepared preferred
3 years personal tax returns	Yes	All owners 20%+
6 months bank statements	Yes	All business accounts
AR/AP aging reports	Yes	Current within 30 days
Entity documents	Yes	Articles of incorporation/organization, operating agreement
Corporate resolution/borrowing certificate	Yes	Authorizing the financing
Third-party equipment appraisal	Likely	Required for used equipment, high-value, or sale-leasebacks

Decision timeline: 1-4 weeks

Collateral / Equipment Documents

Document	New Equipment	Used Equipment
Vendor quote with specs	Required	Required
Bill of sale	At closing	Required (chain of title)
Equipment photos	Sometimes	Always
Maintenance/service records	No	Required
Certified appraisal (NEBB/CMEA)	Rarely (>$500K)	Required (>$50K). Cost: $300-$1,500
UCC lien search	No	Required — verify clear ownership
Mechanical inspection	No	Required for heavy equipment

Used equipment restrictions:

Most lenders cap equipment age at 10-15 years
LTV drops to 50-85% (vs. up to 100% for new)
Loan terms shorten to 36-48 months (vs. 60-84 for new)

Product-Specific Requirements

Structure	Key Documents	Tax Treatment
Equipment Finance Agreement (EFA)	Standard loan docs, UCC-1	Borrower owns from day one, claims depreciation
$1 Buyout Lease	Lease agreement, UCC-1	Functions like a loan, ownership at end for $1
FMV Lease (Operating)	Lease agreement, FMV terms	Lowest payments, fully deductible, no ownership unless purchased at FMV
TRAC Lease	TRAC agreement, DOT docs	Over-the-road vehicles only, tax-oriented with residual adjustment
SBA 504/7(a)	Forms 413, 1919/1920, business plan, 3 years tax returns	Most documentation-heavy; Form 1919 must be dated within 90 days

Insurance (Gating Requirement for Funding)

Certificate of Insurance must name lender as both Loss Payee and Additional Insured
Lender's Loss Payable endorsement preferred over standard Loss Payee (protects lender even if borrower commits wrongful acts)
Equipment description on policy must match loan documentation exactly
All-risk/property coverage plus general liability required
Policy must include 30-day cancellation notice clause
Standard form: ACORD 28
Insurance delays are one of the most common causes of closing delays

Process Flow: Application to Funding

End-to-End Steps

Step	Description	Who's Involved	Timeline	Common Bottlenecks
1. Pre-qualification	Soft credit pull, broker matches to lenders, vendor quote gathered	Borrower, broker, equipment vendor	Instant–2 days	Borrower unsure of exact equipment needed
2. Application	App-only (1-page, 10-20 min) or full doc submission; hard credit pull initiated	Borrower, broker	1 hour–3 days	Incomplete equipment info from vendor
3. Document collection	Gather financial docs per tier (app-only vs. lite vs. full)	Borrower, broker, CPA	1 day–2 weeks	#1 cause of delay industry-wide: incomplete docs from borrower
4. Equipment appraisal	Valuation of equipment (FMV, OLV, or FLV); required for used, high-value, or sale-leasebacks	Appraiser (ASA/NEBB/CMEA), lender	Desktop: 2-5 days; Physical: 5-14 days	Scheduling physical inspections; equipment in remote locations
5. Underwriting	Credit analysis using 3 C's (Character, Collateral, Cash Flow)	Lender underwriter	App-only: 2-4 hours; Full doc: 3-14 business days	Complex entity structures; multiple collateral pieces
6. Credit decision	Approval, conditional approval (with stips), or decline; industry approval rate: 77-81%	Lender credit committee	1-3 days after underwriting	Stips require additional docs, adding days
7. Closing/documentation	Sign EFA/lease, promissory note, personal guarantee, security agreement, UCC-1 filing, insurance verification	Borrower, broker, lender, title company (if applicable)	1-5 days	Insurance certificate delays; corporate resolution not ready
8. Funding & delivery	Funds disbursed directly to vendor (not borrower); borrower signs Delivery & Acceptance Certificate	Lender, vendor, borrower	1-3 days after closing docs	Vendor delivery schedule; D&A certificate not returned promptly

Timeline by Deal Type

Deal Type	Total Timeline	Key Characteristic
App-only (online lender, <$150K)	3-7 business days	Minimal docs, automated scoring
Full-doc (independent finance co.)	2-4 weeks	Manual underwriting, full financial review
Full-doc (bank)	3-6 weeks	Deepest review, best rates
SBA 504/7(a)	8-12 weeks	Government forms, most documentation-heavy

Broker's Role at Each Stage

Stage	Broker Action	Value-Add
Pre-qualification	Match borrower credit profile to optimal lender programs	Saves borrower from shotgunning apps and taking unnecessary hard pulls
Application	Package the deal, ensure completeness before submission	Reduces back-and-forth, speeds underwriting
Document collection	Chase docs from borrower, organize into lender-preferred format	The #1 bottleneck is incomplete docs — a good broker eliminates this
Underwriting	Respond to lender questions, provide context on borrower's business	Advocate for the deal; explain anomalies before they become objections
Approval/stips	Clear conditions quickly, coordinate between parties	Speed = value; every day of delay risks the deal
Closing	Review docs, coordinate insurance, ensure borrower understands terms	Protect the borrower from signing terms they don't understand
Funding	Confirm vendor payment, ensure D&A certificate is returned	Close the loop