Do you need a business equipment loan?

October 30, 2019

Upgrades can provide improved productivity and customer service, but they also require a substantial investment. Here’s how to determine if now’s the right time to proceed.

Unless your business equipment is brand new, you’ve likely thought about upgrading it, possibly via a loan.

In the long run, new systems can make your business operate more smoothly and cost effectively. However, in the short term, equipment upgrades can be cost-prohibitive and require a loan.

To put it simply, you don’t want to scrap your current infrastructure if it’s still within its useful lifespan. But, if you wait too long to upgrade, your business could lag behind your competitors’ offerings. Striking a balance is crucial.


Should you upgrade your business’s equipment? Consider these questions:

  • Is your old equipment hurting business productivity? If your systems are so antiquated that they struggle to perform tasks that are now expected in your industry, you could be losing revenue and customers. 
  • Is it prone to breakdowns or a struggle to repair? If your system is obsolete and unsupported by the manufacturer or you’re finding it increasingly difficult to locate replacement parts, you can delay replacing it for only so long. Better to proactively upgrade before your equipment fails you completely. 
  • Are you experiencing frequent bottlenecks? If performance is suffering because too much demand is being placed on a particular resource, then you’d be well-advised to expand that system. This can have a major effect on your business’s productivity. 
  • Is one piece preventing upgrades in other areas? You’d like to implement a new administrative management system, but you can’t do that until you upgrade and expand your server array. One upgrade can have a domino effect. If you’re in need of multiple, coordinated overhauls, it’s often best to do them all at once. 
  • Is your image suffering? Customers expect a threshold level of products and services. If your equipment can’t provide it, you’ll be seen as outdated and unprofessional. That, in turn, hurts your reputation, which can be difficult to repair. 
  • What are the costs of action? Be sure to examine a possible upgrade from all angles to determine if any interdependencies in your systems could be affected by a change. Create detailed projections on cost savings or revenue gains against the replacement cost and the expense of servicing and maintaining the new equipment. 
  • Does the timing seem right? Pay attention to economic inducements. Lowered interest rates, a new financing program or a change in a relevant tax deduction might influence your choice about whether to take action now or to delay.


Next steps: Financing your equipment upgrade

Unless you have substantial capital reserves, your upgrade will likely require a loan. Here’s what you can do to prepare:

  • Seek training: Consider taking a few of the free, self-paced online training courses offered by the Small Business Administration (SBA). Topics include financing options, how to prepare an SBA loan package and more. 
  • Consult the professionals: Talk to your accountant and attorney about the potential tax advantages and liabilities of purchasing, leasing or financing your upgrade. Work with your banker to determine the best type of loan for your needs and the loan terms that fit your situation. 
  • Present your loan package: Prepare your package, rehearse your presentation and then make your case. You might want to give a tour of your business to illustrate your plans. Stay in regular contact with your banker while the loan package is under consideration, as you might be asked for additional documentation.


Deciding to upgrade your equipment can be an intimidating, time-consuming process, especially if it requires a loan. Educating yourself about the options can help ensure that you make the right upgrade choice at the right time.



Learn more about how you can upgrade your equipment with a business equipment loan.

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Loan approval is subject to credit approval and program guidelines. Not all loan programs are available in all states for all loan amounts. Interest rates and program terms are subject to change without notice. Mortgage, home equity and credit products are offered by U.S. Bank National Association. Deposit products are offered by U.S. Bank National Association. Member FDIC.