Skip to content
Fleet Funding CheckCOMMERCIAL VEHICLE FUNDING

Financing education

EFA, loan or lease?

Compare ownership, payment structure and end-of-term choices before choosing equipment finance.

Start a conversation

Not a credit application. No approval or terms are promised.

Understand the terms before you sign.General education. Your agreement and applicable law control.
← Financing education

Start with the agreement, not the label.

An equipment finance agreement (EFA) finances an equipment purchase. It can resemble a secured loan, but a fixed payment schedule does not tell you how an early payoff is calculated. Read the payment and settlement terms together.

Three structures to compare

  • EFA: check who is named as owner, the security interest, total scheduled obligation and what completes the contract. Do not assume an amortizing principal balance.
  • Loan: borrowed funds are repaid under stated terms. Ask for the interest calculation, payment schedule, any balloon and prepayment provisions.
  • Lease: payments provide use of equipment. Ownership, purchase options, return conditions and renewal obligations depend on the lease. A purchase option is not the same as automatic ownership.

Ask before comparing quotes

Who owns the vehicle during the term? What must be paid at the end? Can I sell or replace it early? An EFA label alone does not establish credit reporting, tax treatment or a right to discounted settlement.