How to Afford Equipment Costs at Your Startup


One of the biggest startup costs in a new business is acquiring the equipment you need. Whether you need machinery, technology, or infrastructure, it’s going to be a significant expense. You have several options in where you might get the funds to afford it.

Lease Equipment

Leasing equipment has several advantages. Your initial investment will cost less, which can preserve some of your on-hand capital for other business needs. You may be able to more easily afford lease payments compared to installment payments on a credit purchase. Leasing will also provide you with the latest model equipment which is an important factor to consider if it’s technology you need.


You may also experience tax benefits. Ask your accountant if you may be able to deduct your payments as a business expense. This may apply only if it’s a true lease and not a rental with an option to buy or a conditional sale.

Take Out a Loan

If your equipment needs are extensive, you could consider taking out a loan to cover the costs. Several types of loans are available to businesses, such as a business line of credit or a microloan. Perhaps the most popular is the Small Business Association, or SBA loan.

SBA loans have more favorable terms and lower interest rates. The terms of an SBA loan for equipment can extend as long as 10 years. You can apply for an SBA loan at most banks. Apply early because it can take several months to get approval.

Find a Partner

If you’ve got a great idea for a business, you may consider finding a partner who shares your vision. A partner may be able to provide the capital you need to fund your equipment and much more. Your partner may also be able to assist with selecting, installing, and managing the equipment you need.


As your business begins to grow, your partner can also share the costs of other capital outlay and operating expenses. Partnerships do require a legal agreement, so be sure to consult a lawyer to inquire which arrangement might be the best for you and your business goals.

Your startup’s success depends on many factors, and having the right equipment is one of them. Before you get up and running, it’s a good idea to plan your equipment needs and decide the best way to fund the expense.

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