FF&E (Fixtures, Furniture, and Equipment) loans are available through various sources. The source that will be most appropriate for you will depend on the timeline of your request and the size of the down payment you want. There are other factors to consider; however, these two factors will determine which source will be a better for your borrowing need. The two channels for financing FF&E are loans or leases.
Leases generally tend to fund much quicker and require less money down. A lease may take 2-4 weeks from application to closing with as little as 10% to no money down. Leases can be used for used or new equipment.
Loans generally tend to fund slower and require more money down. Loans typically take 30-60 days when things go well. Often a commercial loan can take as much as 3 months to fund. Lenders also issue loans based on liquidation values for equipment. You will expect to get a loan for 50%-75% of the liquidation value of equipment.
Choosing the right program to finance your FF&E is important. There are not hard and fast rules to choosing one over the other. It depends on the timing and cash down you want for financing. There are also tax advantages and disadvantages to each program. Discussing these programs and reviewing them with a professional is the best way to ensure a positive outcome.