MCA brokers leave money on the table when they don't recognize equipment financing opportunities. A merchant calling for working capital might actually need to finance a piece of equipment — at much better rates and longer terms than an MCA could deliver.
When equipment is the right product
- ▸The use of funds is a single asset purchase (truck, machinery, restaurant equipment)
- ▸The asset is identifiable and has resale value
- ▸Term needed is 36–84 months, not 6–18
- ▸Merchant has strong personal credit (650+)
Why equipment beats MCA for these deals
Equipment financing rates run 8–18% APR versus MCA effective rates north of 50%. Terms are 3–7 years versus 6–18 months. Payments are monthly versus daily. The equipment serves as collateral, reducing the funder's risk and the merchant's cost.
ISO economics
Equipment financing pays smaller commission percentages — typically 2–5 points — but the deal sizes are often larger ($75K–$500K+). The economics are similar to MCA per deal but the cycle is longer and the credit underwriting is stricter.
How to pivot the pitch
Sounds like the use of funds is mostly that new lift truck — for that specific situation, equipment financing usually saves you 30–60% on total cost compared to working capital. Want me to run both options so you can compare?
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