You need a forklift and you have been in business about a year. Can you finance it, and what will it cost?

A bank lending you $30,000 unsecured wants two years of tax returns and a score in the high 600s because, if you stop paying, there is nothing to collect. An equipment lender writing the same $30,000 against a forklift has the forklift. It holds its value, it has a resale market in every city, and it can be picked up on a flatbed. That changes the whole underwriting.

So the thresholds drop. Most equipment lenders want six months to a year in business, deposits around $15,000 a month, and a personal score around 600. Some go to 500 with a larger down payment. Time in business and score are still read; they just decide the down payment and the rate rather than the answer.

Terms run two to six years. Rates depend on your file and the age of the machine, and a newer business or a score under 600 will usually be asked for 10 to 20 percent down. A five-year-old electric forklift at $22,000 with 15 percent down and a four-year term is a normal, boring deal — which is what you want.

Ask for the total cost in dollars over the term and the monthly payment, and check whether there is a purchase option or a balloon at the end. A lease with a dollar buyout and a loan are similar; a lease with a fair-market-value buyout is a different thing and costs more if you intend to keep the machine.

New or used equipment placed in service in the year can generally be expensed under Section 179 up to the annual limit, financed or not. The IRS publication on depreciation is the authority; the deduction often covers a large part of the first-year payments.

Dealer stock finances most easily: the lender gets a serial number, an hour reading, a seller it can pay directly, and usually a short warranty. Auction and private-sale forklifts can be financed but the lender will want an inspection and may shorten the term. The savings at auction are real; so is the risk of a machine with a cracked mast and no recourse.

Electric versus propane is an operating question rather than a financing one. Lenders finance both. Electric holds resale value slightly better, which can show up as a slightly better rate.

A forklift on a six-month cash advance costs several times what the same forklift costs on a four-year equipment loan. The advance exists for things a lender cannot secure — payroll, inventory, a repair. A forklift is the opposite of that. Take the two extra days and the cheaper money.