Equipment purchases represent a major capital expense for many Texas businesses. Government-backed financing programs can provide better terms, lower down payments, and in some cases grant funding to help offset the cost of qualifying equipment.
SBA 504 Loan for Equipment
The SBA 504 loan program is specifically designed for major fixed asset purchases including equipment. Key features:
- Up to $5 million in SBA-backed financing (higher for manufacturing and energy)
- Down payment as low as 10 percent
- Fixed interest rates for the SBA portion
- Terms up to 10 years for equipment, 20 to 25 years for real estate
- Must be used for fixed assets with a useful life of at least 10 years
Complete SBA 504 guide for Texas businesses.
TCEQ Emission Reduction Grants
The Texas Commission on Environmental Quality operates the Texas Emissions Reduction Plan (TERP), which provides grants for replacing or upgrading diesel equipment to reduce emissions:
- Grants cover a significant portion of the cost to replace qualifying diesel engines
- Available for on-road vehicles, non-road equipment, and marine vessels
- Particularly relevant for trucking, construction, and logistics businesses
TCEQ grants for trucking. TCEQ grants for construction equipment.
SBA 7(a) Loans
SBA 7(a) loans can also be used for equipment purchases with more flexible terms than 504 loans. The 7(a) program provides up to $5 million with terms up to 10 years for equipment. SBA 7(a) guide.
Equipment Leasing
Leasing equipment instead of purchasing can preserve cash flow and may provide tax advantages. Equipment leases may qualify for Section 179 deductions, allowing you to deduct the full lease payment in the year of use.
Steps to Finance Equipment
- Determine the total cost and useful life of the equipment
- Evaluate purchase vs. lease based on your tax situation and cash flow
- Check TCEQ grants if replacing diesel-powered equipment
- Contact SBA-approved lenders for 504 or 7(a) financing
- Compare terms from multiple lenders before committing
Find Equipment Funding Programs
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