Financing · Programs
Equipment Finance Agreement (EFA)
An Equipment Finance Agreement works much like a loan, letting you take ownership of the equipment from the start while making fixed payments over the term.
How it works
An Equipment Finance Agreement, or EFA, is a loan-style structure. Your business owns the equipment from the beginning, and the third-party financing provider holds a security interest in it until the agreement is paid in full.
You make fixed monthly payments over the term. Because you hold title from day one, an EFA suits businesses that want ownership combined with the predictability of set payments.
End-of-term considerations
When an Equipment Finance Agreement is paid in full, the financing provider releases its security interest and you hold the equipment free and clear. You owned the equipment throughout the term, so there is no separate purchase decision at the end.
Tax considerations
Certain equipment financing structures may offer potential tax advantages depending on the transaction and applicable tax law. All Asset Leasing does not provide tax, legal or accounting advice and does not guarantee any particular tax treatment. Consult a qualified tax professional about your specific situation.
Frequently Asked Questions
Equipment Finance Agreement questions
How is an EFA different from a lease?
With an EFA you own the equipment from day one and the provider holds a security interest, similar to a loan. With many leases the provider owns the equipment during the term and you decide what to do at the end.
How is an EFA different from a $1 buyout lease?
Both lead to ownership, but the path differs. With an equipment finance agreement you own the equipment from day one and the financing provider holds a security interest until the agreement is paid. With a $1 buyout lease the provider typically holds ownership during the term and title transfers to you for one dollar at the end. We can help you compare which fits your plans.
Do I hold title to the equipment during an EFA?
Yes. An EFA is a loan-style structure, so your business holds title from the start while the financing provider records a security interest in the equipment. Once the agreement is paid in full, that security interest is released and you hold the equipment free and clear.
What happens when the agreement is paid off?
The provider releases its security interest and the equipment is owned by your business free of any lien.
Can I finance used equipment with an EFA?
Yes. New, refurbished and used equipment can be financed with an equipment finance agreement. A financing provider reviews the equipment so the term reflects its condition and expected useful life.
Are there tax considerations with an EFA?
Because you own the equipment under an EFA, it is often discussed differently for tax purposes than a use-based lease. All Asset Leasing does not provide tax, legal or accounting advice and does not guarantee any particular tax treatment. Confirm the treatment for your business with a qualified tax professional.
All Asset Leasing helps businesses nationwide explore equipment financing solutions through third-party financing providers. We do not lend directly or guarantee approval.