Mossdale Lending Group, a small-business funding broker in Pasco, Washington, explains equipment financing: loans, leases and equipment finance agreements for machines, vehicles used in the work, and fixtures. This page compares fair market value and $1 buyout leases, covers used equipment and lists what partners review. Each lending partner approves and prices its own deals.
| Structures | Loan, lease, or EFA |
|---|---|
| Collateral | Usually the equipment itself |
| Lease ends | Fair market value buyout or $1 buyout |
| Used equipment | Usually possible; hours and condition weigh heavily |
| Contractors on payroll in Franklin County, WA | 380 establishments (CBP 2023) |
| Who decides | The lending partner |
Loan, lease or EFA for a Tri-Cities machine
| Structure | Title during the contract | At the end | Often chosen when |
|---|---|---|---|
| Equipment loan | The business holds title; the partner holds a lien | Lien released at payoff | You plan to keep the machine for years |
| Lease | The lessor | Hand back, extend, or purchase | You may upgrade or want lower payments |
| Equipment finance agreement | Your business, with the partner's security interest attached | You own it outright | You want loan-like ownership with lease-like paperwork |
FMV lease versus a one-dollar buyout
A fair market value (FMV) lease ends with a choice: return the equipment, renew, or buy it at its market value then. Because the payments cover only part of the machine's value, they tend to run lower. A $1 buyout lease works more like a loan: payments cover nearly the full cost, and you buy the equipment for a dollar at the end.
Choose FMV when the machine will be outdated soon or you expect to upgrade. Choose a $1 buyout when you will run it until it wears out. Either way, add up every payment plus the buyout and compare that total with buying outright.
A term that ends before the machine does
A good term ends before the equipment's useful life does. Financing a machine for longer than it will work means paying for something you have already replaced. Ask the vendor or your mechanic for a realistic service life, then pick a term inside it.
Our blog post on county permit figures and a contractor equipment plan walks through this for excavation and building contractors, and the mini excavator loan calculator shows a monthly payment and total cost from your own price, down payment, rate and term.
Equipment Franklin County, WA businesses finance
With 380 employer establishments in 2023, construction topped every other Franklin County sector (U.S. Census Bureau, County Business Patterns 2023). Excavators, skid steers, compactors, trailers and work pickups used on job sites are common requests. Restaurants finance ovens, hoods and refrigerated coolers; dental and medical offices finance chairs and imaging; shops finance shelving and point-of-sale systems.
Partners do not fund agriculture or trucking through Mossdale Lending Group. The industries page covers the sectors partners do fund, and local figures gives the wider county picture.
Used equipment
Used machines are often financed, but partners look harder at age, hours, condition and the seller. A dealer invoice is easier to finance than a private sale; for private sales, expect requests for photos, serial numbers and proof that no one else holds a lien. Terms on older equipment are often shorter.
Section 179 and depreciation questions
Owners often ask whether financing a machine changes how it is written off. Tax treatment depends on the structure and on your own situation, so ask your tax preparer before choosing between a loan, a lease and an equipment finance agreement.
A quote checklist before you call
- Get a written quote with make, model, year, hours or mileage, and serial number.
- Ask the vendor what is included: delivery, attachments, training, warranty.
- Decide whether you want to own the machine at the end.
- Estimate how many years it will stay in service in your work.
- Note any trade-in or down payment you can offer.
With those five answers, a partner can usually tell quickly which structure fits, and you can compare offers on the same terms.
Work vehicles and attachments
Pickups, service vans and trailers used on job sites can often be financed like other equipment when the vehicle is titled to the business and used in its work. Attachments such as buckets, breakers and augers can usually ride on the same contract as the machine if they are on the same invoice; buying them later often means a separate, smaller deal.
What partners review
- The dealer's quote showing make, model, year and serial.
- Recent statements and how long the business has run.
- Existing equipment debt and liens.
- Whether a down payment is available.
- For used equipment, condition details and the seller's title.
The four steps from a call to a partner's answer are on the process page. For a building or a remodel rather than a machine, see business term loans.
By Mossdale Lending Group · Updated