Technology equipment financing

Today, almost every US business uses IT technology to shape the products and services they sell, operate their communications, control their accounting, drive their marketing, or oversee their logistics and deliveries.

Chris Godfrey

Page written by Chris Godfrey. Last reviewed on July 19, 2024. Next review due October 1, 2025.

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IT technology has become so vital for business success that US SMEs who do not have the latest tech are putting themselves at a commercial disadvantage. However, even though IT equipment is far cheaper than it used to be, it can still make a major dent in cashflow when it comes time to purchase. Fortunately, technology equipment finance is available to keep organizations on the IT cutting edge and cut the pressure on their cashflow. Secure the tech you need now, pay for it over time, never worry about your IT equipment again. 

What is IT equipment finance?

IT equipment finance – or technology equipment finance – are loans and leases to obtain IT hardware and software for business purposes. Because IT equipment depreciates very quickly, buying it with cash makes poor business sense. It’s far better to pay for your technology over months or years, build upgrades into the finance agreement to slow down obsolesensce, and preserve your valuable working capital for other areas of your business – such as a mergers, marketing, and expansion.

Some brokers will also have access to other funding for businesses, such as working capital, asset-based lending, unsecured business loans and more. 

What can be financed with technology equipment finance?

No matter if you’re a startup or a small business requiring a single office set-up, or you’re a full-size SME seeking an organization-wide IT upgrade and installation, you can finance everything you need with technology equipment finance and leasing.  

Should you finance or lease your technology equipment?

IT equipment finance can help new businesses to secure the technology they need with either an IT equipment finance loan, or an IT equipment lease. What’s the difference between these finance options? See below.

  • IT Equipment financing

These are loans that allow the borrower to pay for their IT equipment over time, spreading the cost across months or years. In most cases, the borrower pays the loan back, (plus interest and any fees), in fixed monthly instalments. At the end of the loan, the borrower owns the equipment outright. 

Key benefits: Ease the strain on cashflow as you buy the IT equipment you need. Interest is usually a fully tax-deductible expense, and the payments form part of your capital equipment depreciation plan. May offer periodic upgrades to keep your tech up to date. Many IT finance options will offer an automatic buy-back at contract end.

  • IT Equipment leasing

Similar to a loan, except the borrower (lessee) is not buying the equipment, they are renting it over an extended period. At the end of the rental contract, the equipment will either go back to the lessor (equipment provider), or the lessee may have the option to buy the tech for a pre-agreed sum. May offer periodic upgrades to keep your tech up to date. The lessor may be responsible for maintenance of the IT equipment.

Key benefits: Eases the strain on cashflow. Usually comes with lower monthly payments than IT equipment financing. Does not appear on the company balance sheet as a liability. In most cases, the entire payments, (not just the interest), can be written off as fully tax-deductible expenses.

Software loans

Your IT system is only as good as the software you run on it, which means it is as important to maintain the latest versions of your application and operating programs as it is to have the newest hardware. Even a simple software upgrade can vastly improve your organization’s productivity and efficiency. Once again, instead of paying for new versions of software out of working capital, use a software loan to spread the load. Pay over time. Build automatic upgrades into the contract to keep your software systems at peak performance.

Software loans can cover:

  • Operating systems
  • Networking systems
  • Application programs
  • Software licensing costs
  • Cloud-based data subscriptions
  • And more

Advantages of financing technology equipment

Securing IT hardware and software with technology equipment financing can deliver significant business advantages:

  • Get the latest IT equipment your business needs to stay ahead of your competitors and provide a better service for your customers.
  • Ease the strain on cashflow and protect your invested capital.
  • Instead of buying technology equipment that rapidly depreciates, save your working capital for hiring the best people, expanding your operation, increasing inventory, marketing, and buying important supplies.
  • Build technology upgrades into your lease contract to keep your tech on the cutting edge.
  • Some technology equipment finance comes with flexible terms, payment holidays, interest deferrals, and lower fees.
  • Finance new or used IT equipment.
  • Up to 100% finance may be available.

Get started with Swoop

Technology equipment finance is a specialist area with differing rules of application and requiring deep knowledge of the sector from the lender. US SMEs seeking funding may find themselves forever searching and making applications to lender after lender without success. The delays this can create could cause them to lose revenue and leave their business vulnerable to competition. Instead, working with a broker, who can access technology equipment finance from a wide range of lenders is a better way to go. No more cold calls and endless demands for information, just tell us what you need and leave the rest to us. 

Give your business the IT equipment it needs to grow. Register with Swoop to find the best rates, the best terms and the best technology equipment finance today.

Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.

Swoop promise

At Swoop we want to make it easy for SMEs to understand the sometimes overwhelming world of business finance and insurance. Our goal is simple – to distill complex topics, unravel jargon, offer transparent and impartial information, and empower businesses to make smart financial decisions with confidence.

Find out more about Swoop’s editorial principles by reading our editorial policy.

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