Equipment Financing vs. Leasing

Equipment financing and leasing can both support an equipment transaction, but the right discussion depends on the equipment, business objective, and the terms of the actual agreement.

Start with the transaction objective

Clarify whether the immediate goal is to acquire equipment, refinance an existing equipment obligation, or evaluate a lease structure. Equipment Financing options presented through Meridian support purchase, refinance, and eligible lease discussions.

• What equipment is involved?
• Is the business purchasing new or used equipment?
• Is there an existing equipment obligation to refinance?
• Is a lease structure being considered?

Compare the actual agreement

Review the specific contract terms rather than assuming that every financing or lease structure works the same way.

• Payment amount and frequency
• Length of the agreement
• Any end-of-term provisions
• Requirements tied to the equipment or transaction
• Total transaction obligations shown in the agreement

Consider the equipment itself

The type of equipment, intended use, expected useful period, seller, and transaction amount can all help frame the discussion. Approved equipment examples presented by Meridian include heavy machinery, commercial vehicles and trucks, medical devices, and manufacturing tools.

Questions to bring to the conversation

• What is the business trying to accomplish with the equipment?
• What is the equipment cost or current obligation?
• Is a purchase, refinance, or lease structure being considered?
• What timing matters for the transaction?
• What information is available from the seller or current financing provider?

Keep the comparison neutral

Availability, eligibility, structures, costs, and timing depend on the transaction, provider review, documentation, program availability, and applicable terms.

Tax, accounting, ownership, and legal treatment depend on the specific agreement and the business’s circumstances. This resource does not make those determinations.