Best Equipment Financing in February 2024

Compare lenders for equipment loans that can help you get the right tools — at the right time.

How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
Privacy Secured  |  Advertising Disclosures

Best Equipment Financing in February 2024

By Tara Mastroeni | Edited by Abigail Bassett and Janet Schaaf | January 30, 2024
How Does LendingTree Get Paid?
LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

How Does LendingTree Get Paid?

LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.
LenderUser RatingsBest forMax. loan amountStarting interest ratesTerm LengthTime in Business
(98)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

High-revenue businesses$150,000Not disclosed24 to 60 monthsSix monthsGet business loan offers
User ratings coming soonCommercial vehicles$1,000,000Not disclosed36 to 60 monthsNot disclosedGet business loan offers
Taycor Financial lender logo
(155)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Startups$2,000,0004.99%12 to 84 monthsNoneGet business loan offers
User ratings coming soonFast funding$500,0005.49%6 to 72+ monthsNot disclosedGet business loan offers
User ratings coming soonOnline term loan$500,00011.29%6 to 84 monthsTwo yearsGet business loan offers
Bank Of America
(18)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Rate discountsFrom $25,000 (no max.)6.75%Up to 60 monthsTwo yearsGet business loan offers
(27)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Bad credit$1,500,000Factor rates from 1.10 to 1.404 to 15 monthsSix monthsGet business loan offers
User ratings not applicableSBA loan$5,000,000Prime + 3.00%120 monthsTypically two yearsGet business loan offers
(692)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Smaller loan amounts$250,00035.40%*Up to 24 monthsOne yearGet business loan offers
(13)
User Ratings & Reviews rating-reviews-tooltip-icon

Ratings and reviews are from real consumers who have used the lending partner’s services.

Flexible payment options$1,000,000Not disclosedStarting at 24 monthsNot disclosedGet business loan offers

Learn more about how we chose our picks.

Equipment financing lenders at a glance

National Funding: Best for high-revenue businesses

Max. amount$150,000
Term length24 to 60 months
Starting interest rateNot disclosed
Min. credit score600
Min. time in business6 months
Min. annual revenue$250,000
ProsCons

  Low minimum credit score requirement

  Offers equipment leasing with no down payment or collateral requirement

  Low borrowing limits

  1.00% - 2.00% origination fee

Commercial Fleet Financing: Best for commercial transportation

Max. amount$1,000,000
Term length36 to 60 months
Starting interest rateNot disclosed
Min. credit score640 or higher is preferred
Min. time in businessNot disclosed
Min. annual revenueNot disclosed
ProsCons

  Ideal for business owners with commercial transportation needs

  Quick one-page application process

  May require a down payment for borrowers with poor credit

  Lack of transparency around average interest rates

Taycor Financial: Best for startups

Taycor Financial lender logo
Max. amount$2,000,000
Term length12
Starting interest rate4.99% to 28.00%
Min. credit score550
Min. time in businessNone
Min. annual revenueVaries by product, as low as $48,000
ProsCons

  Time in business requirement allows for startups

  Low minimum credit score requirement

  Interest rates may be in the double digits

  A longer loan term could mean paying more interest over time

First Citizens Bank Equipment Finance: Best for fast financing

Max. amount$500,000
Term length6 to 72 months
Starting interest rate5.49%
Min. credit scoreNot disclosed
Min. time in businessNot disclosed
Min. annual revenueNot disclosed
ProsCons

  Can receive funds as fast as one day

  100% financing available

  No minimum time in business specified

  Lack of transparency about minimum credit score requirements

Funding Circle: Best for online term loans

Max. amount$500,000
Term length6 to 84 months
Starting interest rate11.29%
Min. credit score660
Min. time in business2 years
Min. annual revenue$400,000 for SBA 7(a) loans, not disclosed for other loan types
ProsCons

  Typically no effect on your personal credit score to apply

  Minimum annual revenue requirement not disclosed

  Collateral is generally required

  Doesn’t offer specific equipment loans

Bank of America: Best for rate discounts

Bank Of America
Max. amountStarting at $25,000 (no published maximum)
Term lengthUp to 60 months
Starting interest rate6.75%
Min. credit scoreNot disclosed
Min. time in business2 years
Min. annual revenueVaries by product, as low as $50,000
ProsCons

  Offers a business rewards program with rate deductions

  Ideal for in-person support and guidance

  Requires $250,000 in annual revenue

  Lack of transparency about minimum credit score requirements

Fora Financial: Best for bad credit

Max. amount$1,500,000
Term length4 to 15 months
Starting interest rateFactor rates from 1.10 to 1.40
Min. credit score500
Min. time in business6 months
Min. annual revenue$180,000
ProsCons

  Low minimum credit score requirement

  Offers prepayment discounts

  Can’t have any open bankruptcies

  Limited funding options

SBA 7(a) loan: Best SBA loan for equipment financing

Max. amount$5,000,000
Term length120 months
Starting interest ratePrime + 3.00%
Min. credit scoreTypically 680
Min. time in businessTypically 2 years
Min. annual revenueVaries by industry
ProsCons

  Capped interest rates

  Long repayment terms

  Collateral and/or a personal guarantee may be required

  Long processing time (five to 10 business days) compared to online lenders

OnDeck: Best for smaller loan amounts

ondeck logo
Loan amounts$5,000 to $250,000
Starting interest rate35.40%*
Term length (months)Up to 24 months
Minimum credit score625
Minimum time in businessOne year
ProsCons

  Same-day funding available

  Shorter time in business requirement

  Doesn’t disclose minimum interest rate

  Low borrowing cap

*This rate reflects the estimated starting APR offered to at least 5% of OnDeck customers. It doesn’t reflect the minimum APR offered by the company.

U.S. Bank: Best for flexible payment options

Loan amounts$1,000,000
Starting interest rateNot disclosed
Term length (months)Starting at 24 months
Minimum credit scoreNot disclosed
Minimum time in businessNot disclosed
ProsCons

  Flexible payment options (monthly, quarterly or annually)

  Finance up to 125% of equipment cost

  Lack of transparency around loan terms

  Equipment is used as collateral for the loan

What is equipment financing?

Equipment financing is a business term loan that enables companies to purchase equipment needed to operate their businesses — such as computers, vehicles or large machinery.

An equipment loan is a type of asset-based financing, meaning the equipment acts as collateral in a secured business loan.

Equipment financing vs. equipment leasing

You can rent equipment with no or low upfront costs with equipment leasing. While leasing seems cheaper than an equipment loan since you don’t need to provide a down payment, you’ll likely pay more in the long run.

Also, you won’t be able to claim depreciation deductions with an equipment lease since you won’t officially own the equipment.

Equipment financingEquipment leasing
Payment termsEquipment loans cover the costs of equipment in exchange for periodic repayments over a specified termThe borrower makes periodic payments to rent equipment over a specified term
OwnershipBorrower owns the equipmentLender owns the equipment
Down paymentTypically requiredNot typically required
CostsCosts less in the long termCosts more in the long term
DepreciationTax deductibleNot typically tax deductible

Capital lease vs. operating lease

  • A capital lease allows you to rent equipment with the option to buy at the end of the lease term. On the downside, you can’t cancel a capital lease.
  • An operating lease is similar to a conventional rental agreement: You make regular payments but will never own the equipment. However, as the lessee, you can usually cancel the lease with adequate prior notice.

How to get equipment financing

To qualify for equipment financing, lenders will typically look at the following:

  • Personal credit score: Lenders will examine your personal credit score to determine eligibility. Many online lenders, including Commercial Fleet Financing, have minimum credit score requirements in the 600s.
  • Time in business: Some lenders have a minimum time in business requirement of two years, but certain online lenders only require six months or less in operation. For example, Taycor Financial has no minimum time in business requirements.
  • Annual revenue: Traditional banks may require minimum annual revenues, which vary greatly. For example, Funding Circle requires $400,000, whereas Bank of America requires $250,000.

Commonly required equipment financing documents

When applying for equipment financing, the lender may require the following:

  • Equipment quote
  • Recent bank statements
  • Business plan
  • Personal and business tax returns
  • Personal credit score
  • Driver’s license

How to compare equipment financing

It’s important to shop around for equipment financing in order to ensure that you’re securing the best rate and terms available to you. Here’s a look at five factors to consider while weighing your options.

Interest rate: The interest rate you’re given can greatly impact your cost of borrowing and, as a rule of thumb, picking the loan with the lowest interest rate will help you save money. Business loan interest rates can vary greatly between lenders, so be sure to gather loan offers from multiple lenders before making your decision.

Repayment term: Your equipment financing loan offers may come with different repayment terms. In general, longer repayment terms come with lower monthly payment amounts, while shorter repayment terms offer lower interest charges over the life of the loan. Whichever route you choose to take, just make sure that you’ll be able to keep up with the repayment schedule on an ongoing basis.

Funding time: Funding times can also vary between lenders. Some lenders offer same-day funding while others can take a few days or weeks to complete a funding request. Do your best to choose a lender whose funding schedule suits your needs.

Additional fees: Some lenders charge extra fees, like origination fees or prepayment penalties. Be sure to read the fine print of your loan agreement so that you’ll be prepared for any fees that come your way.

Loan purpose: Some equipment financing loans come with restrictions on what you can buy with the funds. Check to ensure that the loan you choose is a match for your business type and intended purchase. If not, don’t be afraid to explore other options.

Pros and cons of equipment financing

ProsCons

  Fast funding: Online lenders offer fast equipment loans (typically within two business days).

  Interest rate: Since equipment loans are secure, you’ll benefit from comparatively lower business loan interest rates.

  Fixed payments: You can spread your cost over time with fixed payments.

  Down payments: Equipment loans may require large down payments (typically 20%).

  Extends equipment lifetime: Loan terms increase the life of the equipment, which may become obsolete.

  Lien or personal guarantee: With equipment loans, lenders typically require a lien and personal guarantee in addition to collateral.

How we chose the best equipment financing

We reviewed more than 25 lenders to determine the overall best 10 equipment financing loans. To make our list, lenders must meet the following criteria:

  • Minimum time in business requirement of two years or less
  • Minimum credit score of 500+
  • Rates and terms: We prioritize lenders with more competitive fixed rates, fewer fees and greater options for repayment terms, loan amounts and APR discounts.
  • Repayment experience: For starters, we consider each lender’s reputation and business practices. We also favor lenders that report to all major credit bureaus, offer reliable customer service and provide any unique perks to customers, like interest rate discounts or flexible repayment schedules.

Best equipment financing summary

Frequently asked questions

An equipment loan is designed to help you purchase or repair machinery and equipment for your business. Additionally, you can use other types of small business loans to finance equipment.
 
Equipment loans generally require regular payments with accruing interest. Payment plans vary by lender and loan type but can include daily, weekly, monthly, seasonal or deferred options.

No, leasing means you’re renting the equipment. With equipment financing, you are borrowing money to buy the equipment outright instead.

Yes, some equipment lenders only require six months in business to qualify for equipment financing — and some don’t have any time-in-business requirements. This allows startups to finance any necessary equipment within their first year of business.