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The machine is the collateral
Equipment financing is the funding program most closely designed for how Winston-Salem, NC manufacturers actually spend money. The machine, tooling, vehicle, or system being purchased secures the loan. If the borrower defaults, the funder recovers by repossessing the equipment — that structural detail is why underwriting can move much faster than a bank line and why used equipment from reputable dealers is very much fundable.
Loan vs. lease — the practical difference
Both let a metal fabrication and food & beverage manufacturing shop put the equipment in the door with limited cash out. The difference is who owns the asset and what happens at the end of the term:
- Equipment loan — you own the machine from day one. Fixed monthly payment over 36–84 months. Full depreciation, standard ownership tax treatment. Best for long-life equipment you plan to keep past the payoff.
- Capital lease ($1 buyout) — economically identical to a loan; title transfers for $1 at end of term. Common for equipment financing programs marketed as "leases."
- Operating lease / FMV lease — you use the equipment; at end of term you buy at fair market value, return it, or upgrade. Best when the equipment will be technologically obsolete inside 3–5 years.
- Vendor financing — sometimes the OEM offers an in-house program that beats third-party pricing on new equipment; sometimes it does not. Worth comparing every time.
Down payment, terms, and what moves the number
Down payment on a Winston-Salem equipment file typically lands between 0% and 20%. New equipment from an established vendor with a strong file: often 0–10% down. Used equipment or a rougher credit file: 10–20% down, sometimes more. Terms match the useful life of the equipment — 36–72 months for most CNC and production machinery, 24–48 months for vehicles and lighter capex.
The payment is intentionally structured so the equipment earns the payment. That is why a $250K machine can go into a $2M NC shop without wrecking the cash position.
What underwriting actually reviews
Roughly in this order for a Winston-Salem equipment file:
- The equipment itself — make, model, year, hours, resale market.
- Personal credit of the primary owner(s).
- Time in business (1+ year is the standard threshold; startup programs exist).
- Business bank statements — 3–6 months.
- Down payment, trade-in, or existing equipment equity.