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Glossary Term

Down Payment

Money paid up front to reduce the amount you finance.

All glossary terms

In short

A down payment is money you pay up front to reduce the amount financed. Commercial equipment deals often range from $0 down for strong credit to about 10% on approved credit for newer businesses or higher-risk assets.

What shapes your down payment

How much you'll put down depends on how a lender reads the risk of the deal:

  • Credit strength — stronger credit can mean little or no money down.
  • Time in business — newer companies may need more up front.
  • The asset — older or specialized equipment can require a larger down payment.
  • Deal size — larger amounts financed may call for more equity in the deal.

The trade-off

A larger down payment lowers the amount financed, which reduces your monthly payment and the total interest you'll pay. A smaller down payment preserves cash for operations. The right balance depends on whether your priority is keeping working capital available or minimizing the cost of the deal.

Common questions

Can I get equipment financing with no money down?

Sometimes — strong credit and a solid business profile can qualify for $0-down structures. It's not guaranteed and depends on the lender and the asset.

Is a bigger down payment always better?

It lowers your payments and total interest, but it also uses cash you might need elsewhere. The best amount balances cost savings against keeping working capital on hand.

General information only. This page is educational and does not constitute financial, legal, or tax advice. All financing is subject to credit review and lender approval. Rates, terms, and eligibility vary by applicant, asset, and lender, and are not guaranteed. Any figures or examples are illustrative. Please speak with a qualified advisor about your specific situation.