Can You Finance Used Equipment? What Businesses Need to Know

For many business owners, buying used equipment is a smart way to stretch budgets while still getting the tools you need to keep operations moving. But a common question comes up—can you actually finance used equipment? The short answer is yes. But the process works a little differently than when financing brand-new machinery.

Here’s what you should know before starting the process.

Buying Used: Dealer, Auction, or Private Party Sales

Not all used equipment purchases are created equal:

• Dealer Sales - Buying used equipment through a dealer often looks much like buying new equipment. Dealers typically provide invoices, serial numbers, and sometimes limited warranties, which help lenders feel more confident.

  
  

• Auction Purchases - Auctions can be a great place to find deals, but they add complexity for financing. Many auctions require payment in full within a few days, if not same day. You’ll usually need pre-approval from a lender before bidding. Lenders may also require extra documentation, such as proof of auction terms and detailed equipment descriptions, to move quickly.

  
  

• Private Party Sales - Financing is possible here, too, but it generally involves more paperwork. Lenders will want extra details like proof of ownership, condition reports (sometimes from a third party) to confirm the equipment’s condition and value, and they will typically ask to pay upon receipt of the equipment. These requests can take a bit more time and effort, but for a great deal on a piece of equipment it can certainly be worth it.

  
  

Age and Eligibility

Lenders look at the age and type of equipment before approving financing. Heavy machinery, trucks, medical equipment, and technology all have different useful lives, so eligibility varies:

• Construction equipment: often financeable up to 10–15 years old

• Commercial trucks: usually 7–10 years old

• Medical or technology equipment: typically shorter, 3–5 years

  
  

The key is that the lender wants to make sure the useful life of the equipment lasts at least as long as the loan term.

Additional Documentation

When it comes to financing used equipment, expect to provide extra documentation compared to new purchases. Lenders want a clear picture of what they’re financing. That may include:

• Photos of the equipment from multiple angles

• Odometer or hour meter readings

• Condition reports or recent maintenance records

• Serial numbers and ownership history

• Auction purchase agreements (if applicable)

  
  

The more detail you can provide upfront, the smoother the approval process will be.

Why Financing Used Equipment Makes Sense

Financing used equipment lets you keep more cash in the business while still accessing the tools you need to operate and grow. Monthly payments can be more manageable than paying upfront, and because used equipment often comes at a lower price point, you may be able to pay it off faster.

Final Thoughts

Yes, you can finance used equipment—whether it’s from a dealer, auction, or private seller. The key is understanding what lenders look for: age, condition, documentation, and proof of value.

If you’re considering financing a used purchase, work with a lender who understands your industry and can guide you through the requirements step by step.

About the Author

   Jared Holmes is the founder of Brilliance Funding Partners, where he helps business owners navigate the commercial lending landscape with confidence. With 9 years of hands-on experience in SBA lending, equipment financing, and working capital solutions, Jared focuses on asking the right questions and delivering financing strategies that make sense for each business. Connect with Jared for a personalized conversation about your options.