Are equipment financing early payoff discounts available for paying off an equipment loan or lease early?
A common myth within the industry is that executing an equipment financing early payoff will automatically yield massive interest savings. Many business owners assume that clearing a lease or Equipment Finance Agreement (EFA) ahead of schedule cuts down on overall financing costs. However, paying an agreement off early rarely results in big savings, and understanding the fine print is critical to protecting your business capital.
If you do have the ability to get an early payoff discount, make sure to read the fine print. Some private finance companies will have a clause that states that an early payoff discount is only available if you pay the financing in full yourself (commonly described as Own Funds) – if a 3rd party pays off the equipment financing in full on your behalf, that can potentially void your early payoff discount entirely.
Bottom Line: If you are entering an EFA or equipment lease, ask upfront what the early payoff discount options are. Do not be surprised if they tell you that there’s no discount for paying in full early.
Ready to Finance Your Next Piece of Equipment?
At EFS – Equipment Finance Specialists, we believe equipment financing should be transparent, straightforward, and built around your business—not hidden fees and confusing terms.
When you’re ready to finance your next piece of equipment, we’d love the opportunity to earn your business and show you how we believe equipment financing should be done. Or if you just have general questions about equipment financing, feel free to call, text, or email us and we will be happy to answer any of your questions.
EFS – Equipment Finance Specialists
(512) 888-5721 | efsequip.com | admin@efsequip.com
Equipment Financing Nationwide | $15,000–$2 Million
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