If the equipment has issues, it’s still your responsibility to continue paying the loan. Warranty or insurance can cover repair/replacement costs depending on the situation. If the item is under warranty, the manufacturer will fix or replace it, but the loan remains in effect regardless. For equipment that’s mission-critical, it’s wise to have insurance or a service plan. In a worst-case scenario, if equipment becomes unusable, you might talk to the lender – but they typically still expect repayment, since the loan was for that purchase. This is why financing should ideally be shorter or equal to the useful life. Some franchise owners proactively replace equipment near end-of-life and may even finance the new replacement while still paying off the old one if needed, but that requires careful cash flow management.