Finance the Equipment Your Business Needs

Equipment financing is a type of business funding specifically designed to help companies purchase or lease equipment needed for operations. The equipment itself serves as collateral, which often makes it easier to qualify for compared to unsecured loans. This can include machinery, vehicles, technology, medical equipment, restaurant equipment, construction equipment, and more.

Equipment Loans: You borrow money to purchase equipment and own it outright once the loan is paid off. You can depreciate the asset, and there may be tax benefits. Equipment Leasing: You rent the equipment for a set period with monthly payments. At the end of the lease, you may have options to purchase, return, or upgrade. Leasing often has lower monthly payments and allows for easier equipment upgrades.

Equipment financing typically ranges from $25,000 to $1,000,000+, depending on the equipment value, your business qualifications, and lender requirements. Some lenders may finance up to 100% of the equipment cost, while others require a down payment of 10-20%. The amount you qualify for depends on your business revenue, credit score, time in business, and the equipment's value.

Most equipment financing lenders prefer a credit score of 600 or higher, though requirements vary. Higher credit scores (680+) typically qualify for better rates and terms. Some specialized equipment lenders may work with lower credit scores if you have strong revenue and the equipment has good resale value. The equipment serving as collateral makes this type of financing more accessible than unsecured loans.

Equipment financing approval is typically faster than traditional business loans. Many lenders can provide pre-approval within 24-48 hours. Full approval and funding usually takes 3-7 business days, depending on the equipment value, documentation requirements, and lender processes. Larger equipment purchases or more complex transactions may take 1-2 weeks.

Most business equipment can be financed, including: Manufacturing machinery and tools, Commercial vehicles and trucks, Restaurant and food service equipment, Medical and dental equipment, Construction equipment, Technology and computers, Office furniture and fixtures, Agricultural equipment, Printing and packaging equipment, Fitness and gym equipment. The equipment must typically be used for business purposes and have a useful life that extends beyond the loan term.

Down payment requirements vary by lender and your qualifications. Some lenders offer 100% financing with no down payment, especially for well-qualified borrowers or newer equipment. Others may require 10-20% down. Factors affecting down payment requirements include your credit score, time in business, equipment type and age, and the lender's policies. A larger down payment may help you secure better rates.

Yes, many lenders finance used equipment, though terms may differ from new equipment financing. Used equipment typically requires a larger down payment (15-25%) and may have shorter loan terms. The equipment's age, condition, and resale value are important factors. Some lenders have age limits (e.g., equipment must be less than 10 years old). Used equipment may have slightly higher interest rates than new equipment.

Equipment financing rates typically range from 5% to 30% APR, depending on several factors: your credit score and business financials, equipment type and age (new vs. used), loan amount and term length, down payment amount, and lender type (bank, online lender, manufacturer financing). Well-qualified borrowers with strong credit and established businesses can often secure rates in the 5-12% range. Rates are generally lower than unsecured business loans because the equipment serves as collateral.

If you default on equipment financing, the lender can repossess the equipment since it serves as collateral. This process typically involves: Initial late payment fees and penalties, communication from the lender about bringing the account current, potential repossession of the equipment if payments aren't made, negative impact on your business credit score, and possible legal action for any remaining balance after equipment sale. It's important to communicate with your lender early if you're experiencing financial difficulties, as they may offer solutions like payment restructuring or temporary forbearance.