Can a nonprofit get equipment financing?
Nonprofit equipment financing works a lot like it does for a business, with a few differences in the paperwork and the taxes. Here’s what lenders look at, what a van or bus costs per month, and how to time it around your board and budget.
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Vans, kitchens and computers wear out at a nonprofit like anywhere else, and paying cash for the replacement means pulling from reserves. Plenty of organizations face that choice: the IRS counted 1,596,231 recognized 501(c)(3) organizations in fiscal 2025 (IRS Data Book, Table 2-6), and that undercounts, since churches don’t have to apply for recognition.
How does nonprofit equipment financing work?
About the same way it works for any business. A lender pays the seller, and your organization repays it in fixed monthly payments, with the equipment as collateral. Matching the term to the equipment’s useful life keeps reserves and donor money free for programs.
At Five West, deals usually start around $15,000 and go up to $5 million and beyond, new or used. Equipment finance agreements (EFAs) run 24 to 84 months and leases 24 to 60. Most files get a first response within 1 to 2 business hours, and funding can follow in as little as 24 to 48 hours once documents are signed.
For a nonprofit, four things change:
- The paperwork. Form 990s and audited or reviewed statements stand in for tax returns.
- The board. Lenders ask for a board resolution authorizing the financing and naming who can sign.
- Taxes. Section 179 generally doesn’t apply, so the case for financing rests on cash flow.
- Timing. The budget, grant cycles and your fiscal year all affect when to apply.
The full list of what we fund is on our nonprofit equipment financing page.
What do lenders look at when a non-profit organization applies for equipment financing?
Your organization’s own financials. For non-profit organization equipment financing, these are the pieces lenders check:
| What lenders review | What it tells them | What to send |
|---|---|---|
| Form 990s | Revenue, expenses and assets over time | Your most recent 990s |
| Audited or reviewed statements | An outside CPA has checked the numbers | Audited statements, or reviewed ones if that’s what you have |
| Year-to-date results | How this year is going | Interim statements and the current budget |
| Operating reserves | How long you could run if revenue dipped | The balance sheet and any written reserve policy |
| Revenue sources | Whether recurring income covers the payment | A breakdown of grants, donations, tuition and program fees |
| The equipment | What it is and how much the work depends on it | The vendor quote; for used, mileage or hours and service records |
Which 990 you file matters. The 990-N e-postcard, for gross receipts normally $50,000 or less, carries almost no financial data, so lenders ask for bank statements or internal financials instead. Under $200,000 in receipts and $500,000 in assets, the 990-EZ is an option. At or above either line, it’s the full Form 990 (IRS). Churches and their integrated auxiliaries don’t have to file a 990 at all (IRS), so for a church, lenders work from its financial statements, budget and bank statements.
Audited statements carry the most weight, and plenty of grant-funded groups already have them. Spending $1,000,000 or more in federal awards in a fiscal year requires a single audit, or in some cases a program-specific audit (2 CFR 200.501).
Reserves get a close look too. The Nonprofit Operating Reserves Initiative workgroup suggests a minimum of 25% of annual expenses, about three months, measured at the lowest point in the year (Stanford Social Innovation Review).
Then there’s the revenue mix. Tuition and program fees come back every year. Grants end. Donations can swing a lot from one year to the next. Lenders want the payment covered without counting on one grant renewal.
For a first response, your most recent Form 990 or audited statements and the equipment quote are usually enough. Application-only decisions go up to $500,000 on qualifying files; above that, expect a full financial package. Here’s how to send financials so they get read quickly.
What equipment do nonprofits finance most often?
Mostly vans and buses, kitchens, AV and sound, computers, clinic equipment and facility upgrades. Fleet vans and buses are also the most common used purchases. What comes first depends on the organization:
- Churches: vans, AV, sound and worship technology, and kitchen equipment.
- Private schools: buses, computers, phone systems, and playground and recreation equipment.
- Nonprofit clinics: medical, dental and clinic equipment, plus the IT that runs it.
- Food programs and community centers: commercial kitchen equipment and vans.
- Almost everyone: facility and energy upgrades, office equipment and furnishings.
Here’s what some of that comes to per month:
| Example | Amount financed | Monthly payment |
|---|---|---|
| New 2026 Ford Transit 350 XL 15-passenger van ($63,440 to $66,845 dealer-listed MSRP) | $63,440, nothing down | About $1,317 over 60 months, or $1,144 over 72 |
| Used 2022 Transit 350 passenger van, $34,000 | $30,600 after 10% down | About $761 over 48 months |
| Used 2019 Ford E-450 21-passenger wheelchair-accessible shuttle bus, $59,500 | $53,550 after 10% down | About $1,333 over 48 months |
| Church sound, video and stage lighting system (example amount) | $50,000 | About $1,590 over 36 months |
| Commercial kitchen for a food program or community center (example amount) | $100,000 | About $2,076 over 60 months |
| Facility and energy upgrade on an EFA (example amount) | $250,000 | About $4,022 over 84 months |
Illustrative payments at an assumed 9%, in arrears. New van figures are dealer-listed MSRPs and the bus price is a listed asking price, not appraisals or offers. The used van uses the top of Kelley Blue Book’s Fair Purchase Price range ($29,200 to $34,000), a valuation guide. 10% down is the low end of our range for used equipment from a dealer. Used examples use the same assumed rate as new so the payments compare directly; actual used rates run higher (see below). The 84-month example is an EFA, since leases run 24 to 60 months. Not an offer.
Lenders look at how much life a used van or bus will have left when the last payment is made. Expect 10% to 15% down from a dealer and 15% to 25% on a private-party sale, with a rate roughly one to three points above new. A clean maintenance history supports a longer term. In October 2026, used E-450 shuttle buses on Comvoy had listed asking prices from $22,900 (a 2016 with 110,664 miles) to $102,850 (a 2017), with several 2019s at $59,500.
A warning for private schools and churches that run a school. Under federal law, a school may not buy or lease a new 15-passenger van that will be used significantly to carry preprimary, primary or secondary students to or from school or school events, unless it meets school bus or multifunction school activity bus (MFSAB) standards. Violations can bring civil penalties. The federal rule covers new vans only, and state law governs how any van is used (Maine Department of Education, citing NHTSA). If students will ride, check your state’s rules and price an MFSAB or shuttle bus first.
For computers, servers and phone systems, see our IT hardware financing page.
Should a nonprofit lease or finance equipment?
Finance it, or take a $1 buyout lease, if you’ll run it for years, like a van, a bus or a kitchen. A fair market value (FMV) lease makes more sense for things that go out of date fast, like computers, phone systems and AV gear.
| Equipment finance agreement | $1 buyout lease | FMV lease | |
|---|---|---|---|
| Who owns it during the term | Your organization. The lender files a lien. | The lessor, until the buyout | The lessor |
| Monthly payment | Highest: pays the price to zero | About the same as an EFA | Lowest: a residual is left |
| End of the term | Lien released | Pay $1 and title transfers | Buy at fair market value, return it, or renew |
| Terms at Five West | 24 to 84 months | 24 to 60 months | 24 to 60 months |
| Section 179 | Generally not available to a nonprofit on equipment used for its mission, whichever structure you pick | ||
| Fits best | Vans, buses, kitchens | The same, in lease paperwork | IT, phones and AV you’ll replace |
For a business, Section 179 often tips this decision toward owning. A nonprofit can’t count on it, so the choice comes down to total cost and how long you’ll keep the equipment. If I sat on a nonprofit board, I’d ask for the total of all the payments first, then what happens at the end of the term. Our paperwork shows the total cost and the term in plain numbers you can hand to the board. The full math is in equipment lease vs. loan.
Can a nonprofit use Section 179 or get a tax benefit from financing equipment?
Generally, no. Section 179 doesn’t cover property used by a tax-exempt organization, unless it’s used mostly in an unrelated trade or business that pays unrelated business income tax (UBIT) under section 511 (26 U.S.C. 179(d)(1); 50(b)(3)).
Keep that in mind in the fall, when Section 179 ads are everywhere. A for-profit business can deduct up to $2,560,000 for 2026, with the phase-out starting at $4,090,000 of qualifying property (IRS Publication 946). None of that helps the van that takes kids to summer camp. For a nonprofit, the reasons to finance are practical: a fixed payment, reserves left alone, and the equipment working now. If any of the equipment will be used in an unrelated business, have your CPA confirm how these rules apply to you.
One tax rule does affect a nonprofit’s lease, though it applies to the lessor. On equipment leased to a tax-exempt organization, the lessor has to use slower depreciation, with exceptions for short-term leases and leases of computers and similar technology for five years or less (26 U.S.C. 168). That can change how a lessor prices a true lease, so compare an FMV quote with an EFA on total cost.
Do board members have to personally guarantee a nonprofit’s equipment loan?
Not always. If the organization has several years of operating history, audited statements and a clean payment record, a lender can often approve it on the organization alone, with no board member signing personally. A newer or smaller organization may need a guarantor or more money down.
When a guarantee is required, it’s a credit decision about the file, and the mission has nothing to do with it. Our corporate-only financing guide lists established 501(c)(3)s with audited statements and reserves among the groups that often qualify.
When should a nonprofit apply for equipment financing?
Apply once you have a vendor quote, ideally before the board meeting where the purchase gets voted on, so the board approves a real payment instead of a guess. Then line up four things:
- Your fiscal year. With a December 31 year end, Form 990 is due May 15, and Form 8868 adds an automatic six-month extension (IRS). The newest 990 on file can be many months old, so have year-to-date statements ready.
- Your budget. A deferred first payment, available on many programs, can push the start of payments into next fiscal year.
- Grant and tuition cycles. On many programs, payments can be set to match when grant money or tuition comes in.
- The board resolution. Get it on the agenda early. Lenders need it before documents are signed.
Can grants or donations cover the down payment?
Usually, if the terms of the gift or grant allow it. Restricted money has to be spent the way the donor or grantor specified, so check the gift letter or grant agreement first. A donor-funded down payment lowers the amount financed, and the payment with it.
Capital campaign still collecting pledges? Financing can cover the gap now. Just ask how an early payoff is calculated before you sign.
My own view: a three-month reserve should stay a three-month reserve. I’d finance the van and let the reserve do its job.
Frequently asked questions
Can a 501(c)(3) finance equipment?
Yes. Churches, private schools, nonprofit clinics and other 501(c)(3)s finance and lease vans, buses, kitchens, AV and IT all the time. The lender looks at the organization’s own Form 990s or audited statements, its reserves, and where its revenue comes from.
What documents does a nonprofit need for equipment financing?
For a first response, usually the most recent Form 990 or audited statements and the equipment quote. A church, which doesn’t have to file a 990, can send its financial statements instead. Application-only decisions are available up to $500,000 on qualifying files; above that, expect a full financial package. Lenders also ask for a board resolution authorizing the financing before documents are signed.
Can a small nonprofit that files a 990-N get equipment financing?
It can apply. The 990-N is an e-postcard with almost no financial data, so lenders ask for bank statements or internal financials instead. Deals usually start around $15,000, and newer or smaller organizations may need a guarantor or a larger down payment.
Does Section 179 apply to nonprofits?
Generally, no. Section 179 doesn’t cover property used by a tax-exempt organization, except property used mostly in an unrelated business that pays unrelated business income tax. For a nonprofit, the reasons to finance are cash flow and keeping reserves intact. Confirm with your CPA.
Will a lender ask our board members to sign a personal guarantee?
Often not, if the organization has several years of history, audited statements and a clean payment record. A newer or smaller organization may need a guarantor or more money down. That’s a credit call on the file, and the mission doesn’t factor into it.
Can a nonprofit finance a used van or bus?
Yes. Fleet vans and buses are the most common used purchases. Expect 10% to 15% down from a dealer and 15% to 25% on a private-party sale, with a rate roughly one to three points above new. A clean maintenance history supports a longer term.
Can a private school buy a new 15-passenger van for students?
Not for significant student transport, under federal law. A school may not buy or lease a new 15-passenger van used significantly to carry preprimary, primary or secondary students to or from school or school events unless it meets school bus or multifunction school activity bus standards. The federal rule covers new vans only, and state law governs how any van is used, so check your state’s rules before you buy.
Where can a nonprofit get equipment financing?
The top sources are banks and credit unions, independent equipment finance companies such as Five West, and dealer or manufacturer finance programs. Some organizations also put donor gifts or grant money toward part of the cost, if the terms of the gift or grant allow it.
See the payment before the board meeting.
Set the price, term, down payment and structure in the Quote Builder and get an estimated payment, with no credit pull. When the numbers work, one short application matches your organization with a dedicated funding professional who handles the deal from application to funding.
This article is general information about equipment financing for nonprofit organizations. It is not tax, legal, or accounting advice, or a commitment to finance. Vehicle prices shown are dealer-listed MSRPs (new vans) and listed asking prices (used buses), not appraisals or offers; the used van value comes from a valuation guide. Tax and legal treatment depends on your organization, your state, and your contract; confirm with your CPA or attorney. All financing is subject to credit approval and underwriting.