Equipment financing supports assets intended to contribute over time. Working capital funding addresses the cycle of paying operating costs and receiving customer income.

Mixing these purposes without a plan can create mismatched repayment pressure. A machine used for years may not be well served by a very short repayment period.

Identify each requirement separately, then consider the overall borrowing commitment. The business must be able to support all repayments together.

Key takeaways

  • Equipment financing supports assets intended to contribute over time.
  • Mixing these purposes without a plan can create mismatched repayment pressure.
  • Identify each requirement separately, then consider the overall borrowing commitment.