Downsides to Equipment Financing

Downsides to Equipment Financing

The following are some of the pitfalls to be aware of when you seek this option from even the best of equipment financing companies.

Owning the Equipment

This may be a plus from some perspectives, but not from one where you consider equipment depreciation. Computers and software, for instance, are better leased than financing, especially if you know your needs are not going to be long-drawn.


Equipment financing, as the name suggests, only lets you buy equipment. To get funds for something else like rent or hire, you would need to find other sources of funding, and first sit down and analyze all your options in that direction.

Higher Overall Expense

The use of equipment financing is more expensive compared to actually buying the piece of equipment yourself, had you had the money lying around to do it. The latter part, unfortunately, isn’t something many small businesses have.

Responsibility for the Equipment

Financed equipment is your own responsibility, which means if anything were to happen to it, you would be the one shouldering the cost of maintenance.

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