Should equipment be funded separately from a line of credit?
Long-lived equipment is usually a permanent funding need, while a line of credit is designed for revolving working capital. Funding equipment from the line can consume liquidity needed for inventory, payroll or timing gaps.
What changes the answer
Compare an equipment facility matched to the asset life with the cost of drawing the LOC for the same period.
Measure how much working-capital headroom remains after the asset purchase.
What to check before acting
A separate equipment loan can make the purpose and repayment schedule clearer even when the LOC rate looks attractive.
- Use your actual balance, price, term and fees.
- Keep the comparison on the same time horizon.
- Check any tax-sensitive or contract-specific point against the current source document.
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Compare working-capital structuresSources and verification
General information only. It is not personal financial, tax or legal advice. Finance approval, pricing and structure are subject to lender assessment and your circumstances.