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Kiah Treece is a small business owner and personal finance expert with experience in loans, business and personal finance, insurance and real estate. Her focus is on demystifying debt to help individuals and business owners take control of their finances. She has also been featured by Investopedia, Los Angeles Times, Money.com and other financial publications.
Kiah Treece is a small business owner and personal finance expert with experience in loans, business and personal finance, insurance and real estate. Her focus is on demystifying debt to help individuals and business owners take control of their finances. She has also been featured by Investopedia, Los Angeles Times, Money.com and other financial publications.
Jordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top performer in the mortgage industry and his entrepreneurial success to simplify complex financial topics. Jordan aims to make mortgages and loans understandable.
Jordan Tarver has spent seven years covering mortgage, personal loan and business loan content for leading financial publications such as Forbes Advisor. He blends knowledge from his bachelor's degree in business finance, his experience as a top performer in the mortgage industry and his entrepreneurial success to simplify complex financial topics. Jordan aims to make mortgages and loans understandable.
Lead Editor, Mortgages & Loans
Fact Checked
Updated: May 1, 2024, 12:06pm
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
Equipment loans let businesses invest in the tools and machinery they need to increase efficiency and stay competitive. Equipment financing companies may be willing to finance up to 100% of purchases while providing competitive interest rates and accessible lending standards. This can make it possible for startups and established businesses to invest in growth and continued operations without a huge cash outlay.
Compare the best equipment loans below to find an option that fits your needs.
Our editors are committed to bringing you unbiased ratings and information. Our editorial content is not influenced by advertisers. We use data-driven methodologies to evaluate financial products and companies, so all are measured equally. You can read more about our editorial guidelines and the loans methodology for the ratings below.
12 lenders researched
16 data points evaluated
5 cateogires scored
FEATURED PARTNER OFFER
OnDeck
4.8
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
We picked OnDeck for its variety of business lending products and same-day funding. OnDeck offers a term loan from $5,000 to $250,000 with repayments terms of up to 24 months. You can also access a credit limit of $6,000 to $100,000 through its line of credit with a 12-month repayment term that resets after each withdrawal.
Pros & Cons
Term loans from $5,000 to $250,000
Lines of credit from $6,000 to $100,000
Same-day funding
Low minimum credit score requirement
$100,000 minimum annual revenue requirement
Must have been operating for at least one year
Does not lend to businesses in North Dakota
Details
Eligibility
Minimum credit score: 625
Time in business: One year
Minimum revenue: $100,000 per year
Turnaround time
You can apply and receive a decision from OnDeck on the same day.
Expert’s Take
OnDeck has carved a niche in the realm of alternative lending, offering expedited access to capital for businesses that may not qualify for traditional bank loans. Its big advantage is the availability of funds on the same day or next while not being affected by a hard credit pull. However, this aggressive lending practice also comes at a steep price.
— Abid Salahi, co-founder and CTO, FinlyWealth
Best Equipment Financing Options
BEST OVERALL EQUIPMENT FINANCING
Balboa Capital
4.5
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$5,000 to $250,000
Minimum Credit Score
620
Time in business
1 year
$5,000 to $250,000
620
1 year
Editor’s Take
Balboa Capital gets an A+ rating from the Better Business Bureau (BBB) and has funded over $7 billion in loans in the U.S. When you need cash for equipment, Balboa Capital may offer up to $500,000, depending on the type of collateral you provide.
The application is online, and you could get an approval within an hour. Borrowers can choose from flexible loan terms. While excellent credit isn’t needed to qualify, the higher your credit score, the better your interest rate will likely be.
Pros & Cons
Loans from $5,000 to $250,000
Online application with quick funding
May qualify with just a year in business
$300,000 annual revenue requirement
Not suited for new businesses
Details
Eligibility
Minimum credit score: 620
Time in business: At least one year
Minimum annual revenue: $300,000
Turnaround time
In some cases, you may be able to apply and get funding within the same day.
OnDeck is an online lending platform that has been helping small businesses gain access to financing since 2006. It offers two borrowing solutions that may work well for companies needing fast access to cash.
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
Up to $1 million
Time in business
2 years
Minimum Credit Score
650
Up to $1 million
2 years
650
Editor’s Take
Crest Capital is an equipment leasing and financing company that offers application-only approval, meaning you don’t need to provide additional documents like tax returns, for loans up to $250,000. Application-only approval may offer same-day authorization and does not require financial statements, account balances or balance sheets. Loan terms for these smaller loans are available from 24 to 72 months.
Larger loans are available for up to $1 million with more extensive application requirements. Terms generally range from 24 to 84 months for these loans.
Pros & Cons
Offers application-only approval for loans up to $250,000
Same-day approval available
Does not impose extensive credit requirements
Does not finance companies in business for less than two years
Financing amounts are low compared to competitors
Details
Eligibility: Crest Capital requires a minimum credit score of 650. To be eligible, businesses must also be in operation for at least two years.
Turnaround time: Lending decisions are typically made the same day, and the lender sends funds directly to the equipment vendor.
BEST FOR SHORT-TERM LOANS
OnDeck
4.5
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
We picked OnDeck for its variety of business lending products and same-day funding. OnDeck offers a term loan from $5,000 to $250,000 with repayments terms of up to 24 months. You can also access a credit limit of $6,000 to $100,000 through its line of credit with a 12-month repayment term that resets after each withdrawal.
Pros & Cons
Term loans from $5,000 to $250,000
Lines of credit from $6,000 to $100,000
Same-day funding
Low minimum credit score requirement
$100,000 minimum annual revenue requirement
Must have been operating for at least one year
Does not lend to businesses in North Dakota
Details
Eligibility
Minimum credit score: 625
Time in business: One year
Minimum revenue: $100,000 per year
Turnaround time
You can apply and receive a decision from OnDeck on the same day.
Expert’s Take
OnDeck has carved a niche in the realm of alternative lending, offering expedited access to capital for businesses that may not qualify for traditional bank loans. Its big advantage is the availability of funds on the same day or next while not being affected by a hard credit pull. However, this aggressive lending practice also comes at a steep price.
— Abid Salahi, co-founder and CTO, FinlyWealth
BEST FOR SMALL- TO MID-SIZED BUSINESSES
National Funding
4.5
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
National Funding offers equipment financing up to $150,000. Borrowers can use their funds for new or used business equipment, such as medical, restaurant, office and construction equipment. Funds can also be used as farm loans and commercial fleet vehicle financing.
Pros & Cons
Low minimum credit score requirement
Financing Up to $150,000
Funds can finance new or used equipment
Low loan amount compared to competitors
Details
Eligibility: National Funding recommends a minimum credit score of 575 to qualify for its equipment financing. Your business must also have been in operation for at least six months. National Funding requires minimum gross annual sales of $250,000.
Turnaround time: Most of National Funding’s loans are disbursed within 24 hours of approval. However, this is subject to receipt of required documentation, underwriting guidelines and processing time by your bank.
BEST FOR FAST APPROVAL
US Business Funding
4.5
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
$10,000 to $50 million
Time in business
2 years
Minimum Credit Score
US Business Funding does not disclose this information
$10,000 to $50 million
2 years
US Business Funding does not disclose this information
Editor’s Take
US Business Funding offers flexible terms that range from three months to 10 years. Loans are available for up to $50 million with a full financial package, but borrowers can access up to $75,000 with a one-page credit application.
The lender’s rate qualifying tool makes it easy to shop for loans and is based on borrowing needs, industry, time in business and other relevant factors. Approval and funding are fast and applicants get a dedicated financial consultant to assist throughout the borrowing process.
Pros & Cons
Offers fast, 60-second approval
24-hour funding available
95% approval rates
Does not publish maximum APRs
Businesses may need to be in business for at least two years
One-page application only available for loans up to $75,000
Details
Eligibility: To qualify for most of US Business Funding’s loan programs, a company must have been in business for at least two years. Exceptions exist, however, and it may be possible to qualify based on company creditworthiness. The lender also has a program for businesses six months or older and freelancers who can demonstrate time in business with a business checking account or tax returns. Overall, the company boasts a 95% approval rate.
Turnaround time: Approval can often be completed within a few hours. Funding speeds are also fast and borrowers typically receive funds within 24 to 48 hours after acceptance.
BEST FOR NEW BUSINESSES
National Business Capital
4.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
National Business Capital is a fintech marketplace that provides equipment financing with less extensive qualification requirements than other lenders. Loans are available through a network of more than 75 lenders and range up to $5 million. Terms range from one to five years.
The application is only one page long and requires just three months of bank statements—tax returns are not required. What’s more, there is no time-in-business requirement for certain borrowers. Borrowers also work with a personal loan advisor who simplifies the lending process.
Pros & Cons
No time-in-business requirement for certain borrowers
Works with a wide range of business types
Network includes over 75 lenders
Terms are limited to one to five years
Funding times start at three days
Does not publish APRs and other fees online
Details
Eligibility: Applicants with a credit score of at least 650 are not subject to minimum time-in-business or gross sales requirements. Likewise, there is no minimum credit score requirement for borrowers that have been in business for at least six months and can demonstrate at least $120,000 in annual gross sales. The application process only requires a soft credit pull, which doesn’t hurt your credit.
Turnaround time: The approval process reportedly takes a few hours to a few days, and funding may be completed in three days or less.
BEST FOR POINT-OF-SALE FINANCING
Currency Finance
4.0
Our ratings take into account loan cost, loan details, eligibility and accessibility, customer experience and application process. All ratings are determined solely by our editorial team.
Loan amounts
Up to $500,000
Time in business
2 years
Minimum Credit Score
625
Up to $500,000
2 years
625
Editor’s Take
Formerly Currency Capital, Currency Finance is a financial services company that offers point-of-sale financing to numerous equipment trading platforms. Partner sites include, but are not limited to, Machinery Trader, Crane Trader, Forestry Trader and AuctionTime. The company also offers financing for private sales, but prospective borrowers must contact the lender directly for more information.
Pros & Cons
Used by many online heavy machinery sales platforms
Terms available up to 72 months
Eligibility requirements are transparent
Does not publish APRs online
Origination fees range from 0% to 5% depending on the lender
Funding speeds are slower than some competitors
Details
Eligibility: Currency Finance borrowers must have at least 20% equity in their business to qualify. Eligibility borrowers must also have been in business for at least two years and demonstrate annual business revenue of at least $75,000. Borrowers should also have a FICO score of at least 625.
Turnaround time: Lending decisions may be available in just a few hours, but the funding process can take a week or more. Ultimately, turnaround time depends on when the application is completed, the type of loan and whether additional information or documentation is required.
Methodology
We reviewed 12 popular lenders based on 16 data points in the categories of loan details, loan costs, eligibility and accessibility, customer experience and the application process. We chose the best lenders based on the weighting assigned to each category:
Loan cost: 35%
Loan details: 25%
Customer experience: 20%
Eligibility and accessibility: 10%
Application process: 10%
Within each major category, we also considered several characteristics, including available loan amounts, repayment terms and applicable fees. We also looked at minimum credit score and time in business requirements and the geographic availability of the lender. Finally, we evaluated each provider’s customer support tools, borrower perks and features that simplify the borrowing process—like online applications, prequalification options and mobile apps.
Where appropriate, we awarded partial points depending on how well a lender met each criterion.
Consider these tips when comparing equipment financing:
Where possible, prequalify. Some equipment financing lenders offer a prequalification process. This means prospective borrowers can share details about their financing needs, revenue and other relevant information to determine loan amounts, rates and repayment terms they may qualify for. This process typically only requires a soft credit inquiry, which has no impact on your credit score.
Find a financing amount that meets your needs. Each lender offers different amounts of financing. Evaluate each lender’s options based on the equipment you need to finance to ensure the loan will cover your needs.
Look out for additional fees. Some lenders offer fee-free equipment loans that don’t require borrowers to pay origination fees, late payment fees, prepayment penalties or any other common loan costs. However, this is not always the case. Confirm a lender’s fee structure when shopping for the best terms. Factor additional fees into your decision-making process.
Evaluate the lender’s customer support options. Consider the lender’s support options before signing the loan agreement if you’ve found a lender that’s prepared to offer the money you need at acceptable terms. Customer support can make a huge difference down the line if you encounter issues with repayment. Research the lender’s customer service resources and read reviews to make sure it’s a good fit.
What Is Equipment Financing?
Equipment financing is a type of loan that enables small businesses to purchase the equipment and machinery needed to do business. This may include everything from small items like electronics to large manufacturing machinery. There are different types of equipment financing, the most common having fixed interest rates with set monthly payments.
How Equipment Financing Works
Equipment financing is offered through many traditional and online business lenders, with loan amounts ranging widely based on the cost of the items being financed. Likewise, loan repayment terms generally mirror the usable life of the equipment—often between three and 10 years. Lenders typically let businesses finance between 80% and 100% of the equipment purchase, but a down payment of around 15% is most common.
Interest rates are also lender-specific but may range anywhere from 2% to 20%—or even lower if you qualify for dealer or manufacturer financing. Traditional banks and credit unions may have the most competitive rates and repayment terms but usually have more stringent qualifications. Equipment financing is also available through online lenders, often with faster funding speeds and lower credit score requirements.
After applying for equipment financing, funding can be received in as few as two business days—though this also varies by lender and loan type. Monthly payments are then spread out over a loan term extending from as few as three years to at least 10 years. Equipment financing is secured by the equipment being purchased, so if the borrower defaults on the loan, the lender can repossess the collateral and resell it to recoup its losses.
Equipment Financing vs. Equipment Leasing
Equipment leases differ from financing in that the business owner is paying to use the equipment for a set period of time rather than owning the underlying equipment, as is the case with financing. Leasing lowers the upfront cost of obtaining equipment and reduces the impact of depreciation on a business’ bottom line.
For that reason, equipment leasing may be a better option for business owners who don’t plan to use the equipment for very long—usually three years or less. Businesses that plan to keep the equipment for longer may benefit more from equipment financing.
How to Get Equipment Financing
The process of applying for equipment financing varies by financial institution, but there are some general guidelines you can follow. Take these steps to get equipment financing business loans through a bank or online lender:
Evaluate the business’ needs. Before getting equipment financing, evaluate how much you need to borrow and whether it’s a necessary expense. Also, calculate whether the new piece of equipment or machinery will increase the efficiency of the business’ operations or otherwise improve profitability or the company’s competitive edge.
Check your personal and business credit reports. Equipment financing is secured by the underlying collateral, but lenders still want to know that borrowers are likely to repay the loan. Check your personal credit score and, if available, your business credit score before applying for a loan. This can help you evaluate your approval odds and provide insight into ways to improve your credit profile before applying. Borrowers should have a personal credit score of at least 650 to qualify.
Shop around for the best deal. Lenders offer a range of financing options, interest rates and repayment terms. For this reason, some financial institutions may be a better fit for your business’ needs than others. Take time to find a lender that offers the type of financing you need along with competitive rates and repayment terms that match your budget.
Submit a formal application. Once you identify a lender that fits your borrowing parameters, submit an application through its website or at a branch. Each lender has its own application procedures and requirements, so contact the financial institution for more information on how to apply for equipment financing.
Many manufacturers and vendors also offer equipment financing. If you don’t want to work with a bank—or don’t think you’ll qualify for traditional financing—search for a vendor that offers in-house financing on the equipment you need. Likewise, many vendors offer equipment leasing arrangements that don’t require a down payment or rigorous eligibility requirements.
Can You Get Equipment Financing With Bad Credit?
It is possible to get equipment financing with bad credit, but it may be necessary to make a larger down payment or pay higher interest rates. Because equipment financing is secured, lenders may be more comfortable extending loans to borrowers with subpar credit or startups that don’t have an established business credit profile.
There are several types of equipment financing available, so it’s necessary to identify a business’ needs as well as each lender’s eligibility requirements and costs. Evaluate these factors when choosing an equipment financing loan.
Business Needs
Before choosing an equipment financing loan, evaluate why the financing is necessary and whether the equipment will help the business improve efficiency or otherwise add to its bottom line. To do so, consider the following questions:
How vital is the equipment to the business’ ability to operate? Likewise, is the loan necessary to replace existing equipment or build on current operations?
Will the equipment improve the business’ efficiency or the quality of products and services? Will the equipment increase the business’ revenue or decrease the cost of operations?
Is the equipment necessary to stay competitive in the business’ industry or market?
How much does the equipment cost, and how much is available for a down payment?
How quickly does the business need the funds?
How long will the equipment last or remain in use?
Ultimately, each business’ needs dictate the type and size of equipment financing loan it needs. In some cases, equipment financing may not be the best option, or purchasing new equipment may not be a savvy business decision.
Eligibility Requirements
It’s necessary to look at eligibility requirements when comparing equipment financing so you know whether you’re likely to qualify for a loan at a competitive rate. Eligibility requirements vary by lender, but equipment financing companies generally consider these eligibility factors:
Industry. An applicant’s industry impacts its approval odds as well as the required down payment and available interest rates. This is because some industries pose more risk to lenders than others. For example, businesses in the construction industry are often considered riskier than those in the transportation industry.
Length of time in business. In general, an applicant should be in business for at least 12 months to qualify for equipment financing. Startups can still access equipment loans, but they must demonstrate sufficient cash flow and may need to provide a larger down payment.
Annual revenue. Businesses with at least $50,000 in annual revenue have greater approval odds for equipment financing than less financially stable applicants. Lenders may require applicants to provide financial records and tax returns to demonstrate the business’ ability to repay the loan.
Credit scores. Applicants should have a personal credit score of at least 650 to qualify for equipment financing. That said, borrowers with low credit—or a limited credit profile—may still qualify based on the business’ revenue.
Cost of Equipment Financing
Equipment loan borrowers generally pay interest rates spanning anywhere from 2% to 20%. However, equipment financing also may come with application fees and origination fees that add to the overall cost. Keep in mind, however, that application fees may be a red flag, as lenders should never charge a fee before an applicant is approved for financing. Business owners should expect to pay origination fees equal to around 3% of the total loan amount.
Finally, most equipment financing requires a down payment of around 15% or 20% of the purchase price, though this number varies and some lenders don’t require down payments at all. When choosing an equipment financing loan, compare providers based on the overall cost of financing.
Equipment financing loan rates vary by lender, borrower creditworthiness, amount of time in business and the type of loan. However, rates typically range from 2% to 20%. The most competitive interest rates are available to established businesses that are creditworthy and have demonstrably stable revenue.
How do you qualify for equipment financing?
Businesses qualify for equipment financing based on their industries, length of time in business, annual revenue and general creditworthiness. Applicants in less risky industries—like transportation—are more likely to qualify for equipment financing with lower down payments and interest rates.
Likewise, established businesses and business owners with strong personal credit scores have better approval odds and interest rates than startups and those with bankruptcy or other financial issues in their credit histories.
Can startups get equipment financing?
Startups can get equipment financing—but it may be necessary to provide a larger down payment or pay higher interest rates than available to established businesses. Not only do new businesses not have established credit scores, but they also lack the history of financial records and revenue that lenders look for during the approval process.
Startups can improve their chances of approval by providing a strong business plan and revenue projections and by having a creditworthy owner personally guarantee the loan. A personal guarantee legally requires the individual to repay any unpaid business debt with their personal money. Alternatively, startup owners may look to business credit cards or less traditional forms of financing like hard money loans, which are secured by your property.
Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circumstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results.
Forbes Advisor adheres to strict editorial integrity standards. To the best of our knowledge, all content is accurate as of the date posted, though offers contained herein may no longer be available. The opinions expressed are the author’s alone and have not been provided, approved, or otherwise endorsed by our partners.
Kiah Treece is a small business owner and personal finance expert with experience in loans, business and personal finance, insurance and real estate. Her focus is on demystifying debt to help individuals and business owners take control of their finances. She has also been featured by Investopedia, Los Angeles Times, Money.com and other financial publications.
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