Working Capital vs. Equipment Loans for Water Park Owners
May 19, 2025 | Last Updated on: May 19, 2025
By Dori Zinn
Some business ventures are more expensive than others. The average cost to open an outdoor park hover around $750,000, but that amount can climb well into the millions of dollars, depending on the size and location of your park.
Small business equipment financing is available for companies of all sizes and in all industries — whether you need a few hundred dollars or hundreds of thousands of dollars. If you’re looking for long-term equipment financing, think about working capital vs. equipment loans as you’re comparing your options.
Working capital vs. equipment loans
If you need small business equipment financing to open or fund your water park, business owners can explore a few different financing options. You can apply for a working capital loan or a long-term equipment loan for capital business financing to buy new equipment or lease equipment.
What is working capital?
A working capital loan is a type of small business equipment financing option that water park owners can use to borrow money to cover everyday expenses. Working capital is your liabilities minus your assets.
This type of loan is best for owners who need funds to pay for everyday business expenses, like running payroll, covering inventory, regular bills, and supplies. For business owners trying to buy necessary equipment and cover other types of expenses, a working capital loan might be a better option compared to a regular equipment loan. There are a few different types of working capital loans, such as:
- SBA loans: These types of capital business financing options are backed by the Small Business Administration. There are a few different SBA loans business owners can choose from, depending on business needs, the loan amount, and the lender.
- Line of credit: Rather than a lump-sum business loan, you can use a revolving line of credit so you can use funds for long-term equipment financing whenever you need it.
Working capital is one way to pay for small business equipment financing while covering the costs of other business needs. A working capital loan or line of credit allows you to take out only what you need to cover your necessary costs so you can avoid borrowing more than necessary.
What is equipment financing?
There are several types of small business equipment financing available, including taking out a business loan for equipment purchases and equipment leasing.
An equipment loan is a type of small business equipment financing option where you can borrow a lump-sum loan generally up to 90% of the equipment’s total value, depending on the lender you borrow from. You can cover the rest of the loan with a down payment of the difference.
Long-term equipment financing can last around 10 years or longer, depending on how much you borrow, your lender, and the type of equipment you’re financing. Long-term equipment financing is a secured, lump-sum loan covering business equipment. You’ll make monthly payments with a fixed interest rate until your loan is paid in full. Your business owns the equipment outright once your loan is fully paid back. If you fail to make payments on your loan during the repayment period, your lender could seize your water park equipment.
Long-term equipment financing vs. equipment lease
Some small business equipment financing options allow you to lease the equipment while others let you borrow a loan to buy business equipment.
An equipment lease is similar to leasing other types of equipment or vehicles. You’ll make payments on your piece of equipment through your repayment terms. When your lease is up, you may have the option to renew your lease or purchase the equipment. Depending on the type of equipment, its value, and what you paid during your repayment terms, you can negotiate new loan options or a new lease term with adjusted loan payments.
Small business equipment financing benefits
One benefit of equipment financing loans is funding construction equipment, tools, and other gear for your water park. Some small business equipment financing offers repayment terms on a monthly, quarterly, or annual basis.
Repayment flexibility lets you focus on building your water park business rather than paying back your loan. When you apply for a working capital loan, see what types of repayment options are available so you know how to choose the one that works best for your finances and budget.
Exploring different financing options helps you figure out which one works best for your business needs. You’ll be able to keep up payroll, business services, and regular operations without sacrificing cash flow. If you get a revolving line of credit — like a business line of credit or business credit cards — you can regularly tap into your equipment financing, like a long-term investment in your business.
How to qualify for small business equipment financing
If you’re looking for capital business financing or long-term equipment financing, there are a few places to look for funding. Before you start the application process, make sure you’re eligible for the equipment loan or capital business financing option you’re applying for.
- Credit score: Make sure to check your business and personal credit scores before completing an application. That lets you know if you can borrow with a particular lender first. If you don’t have a business credit score yet, you can use your personal credit score to help qualify for financing.
- Loan choice: Compare options between a business loan, a line of credit, a credit card, SBA loans, equipment leasing, or something else. See which ones are best for your needs when it comes to working capital vs. equipment loans. Look at down payment requirements, interest rates, fees, and repayment terms between different lenders.
- Financing amount: Figure out how much you need to borrow before the application process. That way, you can avoid overborrowing. If you aren’t sure how much you need, think about getting a revolving line of credit so you can use long term equipment financing funds whenever you need to cover your business needs. Also consider lenders who have a minimum and maximum borrowing amount. You may not qualify for specific lenders if you need to borrow more — or less — than what some lenders offer.
- Pre-approval process: Rather than completing one application with just one lender, you can shop around with many different lenders through pre-approval.
If you haven’t been in business for awhile or you’re just starting out, you may not qualify for certain small business equipment financing options. Look at each lender to see if you meet the eligibility requirements before completing a full application.
When you’ve selected a lender, gather the appropriate documents to complete your application, like:
- Your Employer Identification Number (EIN)
- Business license and registration
- Business tax returns for the last few years
- Business bank statements
- Current business financial documents, like a balance sheet, proof of annual revenue, and an income statement
You’ll also need a detailed business plan of how you’ll use your funds. This helps financial institutions figure out if you’re worthy of lending to. If you need money right away, check appropriate small business equipment financing options so you know which banks and lenders are willing to give out loans faster than other lending options.
FAQs about small business equipment financing
Can you get an SBA loan for equipment?
You can use some SBA loans to purchase equipment for your water park. Some SBA loans allow you to use funds for equipment as well as other needs, like hiring workers, covering payroll, and buying other supplies.
Is it hard to get an equipment loan?
It might be easier to get business equipment loans compared to other types of small business equipment financing. Equipment financing is usually a secured type of loan, since the equipment serves as collateral for your loan. If you fail to repay your loan, your lender could seize your equipment.
Do equipment loans require a down payment?
Some small business equipment financing options require a down payment if you want to borrow the full equipment cost. Not all term loans have a down payment requirement, so it’s important to read all the disclosures before signing your loan agreement.
Can you get equipment financing with bad credit?
There are some options that allow small business owners to take out loans with bad credit or don’t require credit approval to take out a loan. You may not get approved by traditional banks if you don’t have the best credit score or history. However, exploring nontraditional options might be the best way to get small business equipment financing for startups or alternative financing options.
How long can you get an equipment loan for?
Equipment loans last anywhere from a few months to many years. Long term equipment financing depends on the type of equipment you’re financing, your down payment (if necessary), your lender, and what kind of business loan you’re getting.
