Equipment financing is a commercial loan that helps small business owners acquire, upgrade or replace essential or heavy equipment, such as restaurant refrigerators, vehicles or commercial copy machines. Equipment financing can help avoid a substantial strain on your business's cash flow from and upfront purchase. There may even be equipment financing options available to startups and businesses with bad credit.
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Here are several business equipment financing companies that may offer equipment financing.
| Lender | Best for | Loan amount | Starting interest rates | Minimum credit score | Time to funding |
|---|---|---|---|---|---|
| National Funding | Bad credit | Up to $150,000 | Starting at 4.99% | 575 | 24 to 72 hours |
| Currency | Fast funding | $10,000 to $100,000 | APR 7.50% to 12.50% | 625 | 24 to 72 hours |
| Commercial Fleet Financing | Commercial vehicles | From $10,000 | Not disclosed | 640 | 24 hours |
| Taycor Financial | No down payment | $500 to $2,000,000 | Starting at 3.49% to 28.00% | 550 | 4 to 24 hours |
| CIT | Large amounts | Up to $500,000 | Annual interest rates starting at 5.49% | Not disclosed | 24 hours |
To appear on our list of best equipment financing companies, lenders needed to meet the following criteria:
If you’re working to improve your credit score but still have equipment financing needs, then National Funding could be a good option for you. The minimum credit score it accepts is 575 and it only requires a minimum of six months in business, making it more accessible than many other lenders offering equipment financing.
You can get financing up to $150,000 for equipment you might need for your business, including office equipment, restaurant equipment or commercial vehicle financing. The interest rates start at 4.99% and, for most customers, payments will be monthly. If approved, you could see funding within 24 to 72 hours.
If you need immediate funds for equipment, then Currency may be an option to consider. This lender also offers working capital loans and commercial loans for other business needs.
For equipment financing, Currency looks for a minimum credit score of 625. If you meet the criteria, you could see funding in 24 to 72 hours with an APR between 7.50% and 12.50%. The minimum it offers is $10,000, up to a maximum of $100,000.
If you’re looking for equipment financing specifically to build a commercial vehicle fleet or to buy a vehicle, then Commercial Fleet Financing is an option worth considering. It offers equipment financing starting at $10,000.
While the company doesn’t disclose its interest rates, it does note on its website that its rates can compete with those of your local bank or credit union. Commercial Fleet Financing also notes that it can provide funding in as little as 24 hours, and looks to work with borrowers with credit scores of 640 or higher.
Taycor Financial can offer you funding in as little as four to 24 hours. Amounts range between $500 and $2,000,000 in funding for equipment financing.
Taycor’s interest rates can be as low as 3.49%, and go up to 28.00%. You’ll need a credit score of at least 550. Once you’re granted your funding, you’ll have a repayment term of 12 to 84 months. It’s flexible with its payment schedule, so you can make payments on one that works best for you.
CIT, a division of First Citizens Bank, offers equipment financing up to $500,000 if you only fill out an application (though it allows up to $1,000,000 if you also offer financial statements). It can finance for term lengths of 6 to 72 months, with annual interest rates starting at 5.49%. Once approved you could have your funding within 24 hours.
Financing from CIT can be used for buying items like inventory, equipment and technology, among others, to help you run your business — plus, it’s got flexible repayment terms to fit a large range of business needs as well.
Equipment financing is a secured loan, where the equipment you purchase acts as collateral. Since your equipment serves as collateral, failure to make payments could result in the lender repossessing it. But once you repay the full loan amount, you’ll own the equipment outright, without any liens.
Lenders typically cover at least 80% of the equipment cost, which means that you pay the remaining amount via a down payment. You’ll repay the loan over a fixed period of time plus interest.
Equipment financing companies typically offer rates from 5% to 30%. For example, if you run a printing business and need a new digital press, it may cost you $100,000. You could apply for a heavy equipment loan equal to 80% of the equipment’s cost ($80,000), plus 5% interest (a total of $84,000). You’d pay back the loan on a fixed schedule until it’s paid off.
To qualify for equipment financing, lenders will typically examine your credit score, time in business and annual revenue.
Personal credit score: Lenders will examine your personal credit score to determine eligibility. Many online lenders, like CIT and Funding Circle have minimum credit score requirements in the 600s.
Time in business: Some lenders may have a minimum time in business requirement of two years, but there are online lenders that only require six months in operation.
Annual revenue: Traditional banks may require minimum annual revenues of $250,000.
When applying for equipment financing the lender may require the following documents:
Yes, some equipment lenders only require six months in business to qualify for equipment financing, allowing startups to finance any necessary equipment within their first year of business.
Yes, some lenders only require minimum credit scores as low as 575.
Typical equipment loan interest rates range from 5% to 30%.
Yes, lenders may provide equipment financing options for pre-owned equipment.