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Lulalend is now Lula. We have a new name, a new look, but we're still your friends in funding 😃.

Looking for equipment finance?

Access Lula's Revolving Capital Facility for fast business funding that requires no collateral.

Get up to R5 million in business funding in 24 hours.

    Apply for a fast, commitment-free quote now.

    You need the right equipment to run a business, whatever the industry you operate in.

    Yet, one day that equipment will need replacing, updating, or upgrading. The cost of new equipment can look intimidatingly high for small businesses but you simply can’t afford not to invest in gear.

    Whether your SME needs manufacturing machines, vehicles, computers or medical devices, having the right equipment is essential for operations. Without it you risk:

    Inefficient operations with outdated, inefficient equipment

    Losing customers and sales due to lack of proper equipment

    Inability to scale or grow the business without new equipment

    So what’s the fix for a small business like yours? Buying equipment takes large upfront cash outlays that many entrepreneurs just can’t afford due to insufficient cash reserves or working capital.

    Don’t have the cash flow for a deposit on a large equipment purchase? Don’t worry, equipment finance can help. 

    But what is equipment finance? Let’s look at the benefits of equipment financing options and how you can use them to meet your business needs.

    What is equipment finance?

    Equipment finance or asset finance is a type of business loan or funding that businesses use to finance the purchase or use of equipment necessary for operations.

    You can use this type of business funding to obtain equipment like essential machinery, vehicles, medical equipment, computers, office furniture and other tangible assets excluding real estate.

    The truth is that if you need equipment finance, it’s usually already urgent. Having access to this type of business funding can make or break your SME. Instead of using your revenue to pay for costly equipment, using dedicated equipment finance ensures that you won’t have to dip into the working capital that is crucial for covering daily expenses. 

    So what is equipment finance? Equipment finance is a business loan that can fund your business without disrupting your cash flow.

    How does financing equipment work?

    If you don’t have the money to buy an expensive piece of equipment upfront, you’re going to need some sort of financing. Here’s the usual process to finance equipment:

    1. Identify equipment needs: Start by figuring out exactly what kind of equipment you need for your business operations.
    2. Negotiate purchase terms: Negotiate with the seller of the equipment on specifications, price and delivery terms.
    3. Submit loan application: Provide the potential lender with your business and credit details.
    4. Loan or lease evaluation: The financial institution then reviews your creditworthiness and decides on loan terms, including deposit, interest rate and monthly payments. This process often takes weeks.
    5. Accepting terms: Decide whether or not to accept the loan terms offered by the lender.
    6. Finalising and payment: When approved, papers are signed, a lien is put on the equipment, money is paid to the seller and you can take possession of the equipment.

    What to look out for in an equipment finance loan agreement

    The above process might seem straightforward, but getting business funding in South Africa with good loan terms can be hard. When negotiating equipment financing, key things to pay attention to are:

    Unlike traditional loans, equipment finance often comes with finance charges. These charges include interest, late fees, service fees and other costs. Finance charges depend on your creditworthiness and prime rates.

    These finance charges are rolled into the fixed monthly payments, so it’s important to understand the total cost over the life of the agreement.

    The equipment that is being financed usually serves as collateral, rather than another asset on your balance sheet.

    The lender files a security interest of lien against the equipment, which means they can repossess it if you default on the loan.

    The equipment finance loan agreement can contain clauses that require your SME to maintain a certain financial ratio.

    If, at any point, you don’t meet this ratio, the lender can demand full repayment or repossess the equipment.

    With an equipment finance agreement, the borrower takes ownership of the equipment, unlike a lease agreement where the lessor is considered the owner.

    The lease agreement should outline the lessee’s options at the end of the term, such as the ability to purchase the equipment for a residual value.

    Lenders may require additional documentation beyond the standard business and financial information, such as equipment appraisals or franchise agreements.

    Be aware of any upfront fees or closing costs associated with the equipment finance agreement. Many traditional banks and other financial institutions charge fees.

    Alden Philpbrick, President and CEO of finance firm Oxford Finance Corporation, shares a tip for business owners

    “One of the most important things to keep in mind when negotiating the terms of a loan agreement is that the equipment should be the sole source of collateral. Avoid contracts that have restrictions on other parts of the business or balance sheet.”

    Philbrick further notes: “A basic equipment loan should not include financial covenants or blanket liens on other company assets, such as intellectual property or receivables.”


    Equipment finance pull quote

    What are the main types of equipment finance?

    So, what is equipment finance? There are a few types of equipment finance for businesses: equipment loans, equipment leases and revolving credit facilities.

    Compare your options

    Traditional equipment loan Equipment lease Lula’s Revolving Capital  Facility
    Type of credit One-time upfront capital injection Fixed capital injection
    Funding amount High funding limit depending on your business Up to R5 million depending on SME valuation
    Ownership Immediate ownership but equipment is collateral No ownership, possible purchase at residual value after lease period Immediate ownership
    Repayment terms Long-term, fixed payments in instalments Depends on lease terms No term: revolving credit and flexible repayment
    Good for Funding of costly machinery and equipment Bridging cash flow gaps, operations, bidding on contracts Upfront project costs like procurement (labour and material)
    Approval time Weeks to months Weeks to months for approval Fast approval and access to funds in 24 hours after
    Early repayment Penalties for early repayment No penalties, repaid amount can be re-borrowed No penalties, repaid amount can be re-borrowed
    Associated cost High, non-transparent financial charges Long-term cost higher than value of the equipment Low cost of capital, no hidden fees

    Traditional equipment loan

    When someone takes out a traditional equipment loan, the lender provides the borrower with upfront funding to cover part or the whole cost of the equipment. The borrower then purchases and owns the equipment outright, repaying the loan amount plus interest in instalments over a set term, often 2-5 years. 

    Equipment loans usually require a deposit, with lenders funding somewhere between 80-100% of the value of the equipment. Lenders also require the new equipment to be put up as collateral. This means that the lender has the ability to repossess the piece of equipment if the borrower defaults on their business loan

    As per the loan agreement, the business owner makes payments until the loan is fully repaid. Once the loan is paid off, the borrower becomes the full owner of the equipment.

    Equipment lease

    An equipment lease or operating lease is like a deal between the owner of the equipment (the lessor) and the person or business wanting to use the equipment (the lessee). 

    It’s an agreement where the lessee can use the equipment for an agreed-upon time by making regular payments, instead of buying it outright. A lease agreement gives business owners the flexibility to access equipment they need for a specific period without owning it and thus without the financial burden of purchasing it

    The lessee pays for the equipment usage through monthly or quarterly payments, which might include interest rates, fees and other costs. 

    At the end of the lease, the lessee usually gives the equipment back to the lessor, but can sometimes choose to purchase the leasing equipment at a reduced value that takes depreciation and payments made into account.

    Lula’s Equipment Finance

    A third option for equipment financing is Lula’s Revolving Capital Facility. This type of business funding is more flexible than a traditional business loan and can be much cheaper when used effectively.

    Instead of a one-time upfront payment, a Revolving Capital Facility is an open line of credit that you can call on any time and can use for any type of equipment purchase or business expense. 

    And instead of repaying the owed amount over a set term of years – and paying a lot of interest along the way – this loan has no set term. Business owners can pay back the borrowed amount whenever they want without early repayment fees or hidden financial charges.

    This offers small businesses an accessible way to fund equipment for up to R5 million. Here’s how Lula’s Revolving Capital Facility differs from traditional loans:

    • Flexible funding: You have the freedom to use funding for any equipment needs your business has, whenever you need it.
    • Fast approval and funding: The application and approval process is 100% online and can be completed within hours, not weeks like banks. Once approved, you’ll receive the funds directly into your business account within 24 hours.
    • Transparent costs: Unlike banks applying complex financial charges to their equipment loans, Lula charges a transparent interest rate determined at the outset of the contract. No monthly account or admin fees apply.
    • Early repayment: Repayment works through fixed monthly instalments over an agreed term of 3-12 months at a set interest rate. There are no hidden fees, and you can settle the remaining balance early with no penalties.
    • Accessible for SMEs: For small and medium-sized enterprises (SMEs) that need equipment but lack solid credit, collateral or long operating histories, Lula’s business funding provides an accessible equipment financing solution.


    What are the pros and cons of equipment finance?

    Weigh the benefits and drawbacks of each equipment finance option:

    Type of Equipment Finance Pros Cons
    Traditional equipment loan Own the equipment once the loan is paid off Deposit required
    Build equity on your balance sheet Finance charges and fees are not transparent
    High funding limit depending on your business Equipment as collateral
    Equipment lease Little to no upfront costs Never own the equipment 
    Can regularly upgrade to new models  Finance charges and fees are not transparent
    Flexible lease terms Long-term costs can exceed equipment value
    Lula’s Revolving Capital Facility Line of credit is always open Short-term repayment
    Fast online approval and funding in 24 hours Up to R5 million in funding
    Flexible repayment schedule Requires at least R500,000 in annual revenue
    No early repayment fees or service fees SME needs to be operating for at least 1 year

    What is the cost of using Lula’s equipment finance?

    Lula’s equipment financing is tailored to small businesses with immediate capital needs. That makes capital costs lower and cash flow management easier (saving further on operational costs) than is possible when borrowing from traditional financial institutions.

    Monthly interest rates on Lula’s Revolving Capital Facility are between 2-6% for the first 1-4 months depending on your credit profile, then 2% for the remaining months. 

    There are no early repayment fees and no monthly account or admin fees. Repaying early keeps total paid interest down and can be a massive cost-saving strategy

    While this type of loan is more flexible and potentially much cheaper than a traditional equipment loan, revolving credit can be costly when used for long-term repayment like a traditional loan.

    What type of equipment can I buy?

    With the Revolving Capital Facility from Lula, you can purchase any type of equipment your small business needs. Our business funding can cover equipment like:

    • Logging equipment
    • Factory equipment
    • Commercial kitchen equipment
    • Dental and medical equipment
    • Farming and agriculture equipment
    • Office furniture and technology
    • Vehicles for transportation and logistics
    • Other specialised equipment for niche industries

    The flexibility of using the funds for any equipment purposes is a major advantage. You can invest in the specific assets required to maintain efficient operations, meet customer needs and facilitate growth.

    Fast funding allows you to seize opportunities as they arise instead of waiting months for equipment approval and delivery.

    How to finance heavy equipment

    Because Lula’s Revolving Capital Facility is tailored to SME needs, this type of funding is less suited for heavy equipment like construction or mining vehicles.

    The value of the equipment in these industries easily ranges in the tens of millions of rand and can be better financed through traditional fixed-term equipment loans with collateral and a deposit. This spreads the high cost over a long period of time.

    Do I need a good credit score for equipment finance?

    Qualifying for equipment finance at a traditional bank can be hard for small businesses. These financial institutions typically favour big companies that need large loans and don’t always suit the needs of SMEs with smaller cash flows and working capital. If you don’t have a good credit score, banks will require extra collateral, larger down payments, and set stringent covenants in the loan agreement.   

    Lula’s Revolving Capital Facility is a cost-effective and flexible financing solution that meets your business needs for equipment finance. Instead of looking at credit scores, we assess creditworthiness from real-time banking data.

    To meet eligibility for our financing, you need to be:

    • A South African construction business
    • Operating for at least a year
    • Generating at least R500,000 in annual turnover


    How can I quickly apply for equipment finance?

    Is your equipment in need of replacement? Don’t drain your working day-to-day capital for expensive purchases. You need fast access to flexible funding. 

    Getting equipment financing shouldn’t be hard or take ages. We know what your business needs, which is why we’ve simplified the application process to quickly give you access to the funds you need.

    Lula’s Revolving Capital Facility gives SMEs flexible, on-demand access to cash to ensure your business can continue operating with the equipment it needs. 

    The application process is easy, online, and with approval given within as little as 24 hours. This is the application process:

    • Apply online in minutes.
    • Lula assesses the application and provides a commitment-free quote.
    • If accepted, the funds are transferred to the chosen bank account in 24 hours.


    We can provide you with:

    You can easily open an account to apply for Lula’s Revolving Capital Facility and link your bank account for quick assessment. Our financial experts conduct a real-time evaluation of your business.*

    Complete your application in a few minutes and receive funds into your account within 24 hours after we approve your application.

    No need to worry about long repayments, high-interest rates, and higher total capital costs. With Lula’s Revolving Capital Facility, you repay on your terms and without early repayment penalties.

    Trusted by business owners like you.

    Phaedon Gourtsoyannis
    Having easy access to cash is probably one of the most important things, that’s where Lula comes in.
    Willem Haarhof
    The biggest challenge we face is access to cash. What Lula has enabled me to do is take that worry about cash flow away.
    Jerome Roberts
    Lula makes it easier for SMEs to access funding when they need it most.
    Jennifer Classen
    I see Lula as a financial partner, and because I have this partner, I don't need to worry about cashflow.

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