Why the machine decision is a cash decision
Equipment is expensive, and it is rarely needed at a convenient time. Paying cash for it can empty the account that covers payroll. Financing spreads the cost over the period in which the equipment is earning, so the account stays usable. The test is the same as for any purchase: does it add income, protect income, or reduce a cost enough to justify the payment?
What the local economy asks of machines
Wikipedia describes San Jose's transition from an agricultural center to an urbanized metropolitan area driven by the technology industry. A city with that history has a deep supply of small manufacturers, prototyping shops, repair businesses and food producers, each with its own equipment profile.
- Machine and fabrication shops: CNC mills, lathes, laser cutters, inspection equipment.
- Electronics assemblers: pick-and-place, soldering and test systems.
- Food and beverage producers: mixers, ovens, packaging lines, cold storage.
- Fleets and delivery: vans, lift gates, trailers. See the trucking page.
Capacity, replacement, or upgrade
| Reason | What to check |
|---|---|
| Capacity: turning away orders | Are the orders repeatable, or a one-off spike? |
| Replacement: old unit failing | How much downtime has the old unit cost? |
| Upgrade: faster or more precise | Will customers pay for the improvement? |
Illustration with round numbers
These figures are made up to show the logic and are not our terms. A small precision shop is turning away work because its one mill is booked. A second mill costs $85,000 and would let it take about $10,000 a month of additional orders at the margin the shop currently makes. The owner can ask whether those orders are signed or only hoped for, whether the shop has a machinist to run it, and what happens to the payment if the largest customer goes quiet. Those three answers matter more than the sticker price.
What to ask before buying
- Will it run? A machine with no trained operator earns nothing. Include hiring or training in the plan.
- Is the space ready? Power, ventilation, floor load and permits can cost more than expected.
- What else will the money do? If the purchase leaves nothing for materials to feed the new machine, the machine may sit idle.
Next steps
If the equipment is only part of a bigger plan, term loans or working capital may cover the rest. We consider FICO scores of 500 and above, review about three months of business bank statements and need no tax returns. The application is five minutes with a soft credit pull, and funding runs from $25,000 to $5,000,000 and can arrive in as little as 24 hours. Sole proprietors can apply. Apply here.