How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Here are 9 equipment financing options
Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
---|---|---|---|---|
National Funding - Equipment Financing with Fundera by NerdWallet | 4.5/5 Best for Equipment financing with no down payment | $150,000 | 600 | with Fundera by NerdWallet |
Bank of America - Equipment loan | 4.5/5 Best for Bank equipment financing | Undisclosed | 700 | |
SBA 7(a) loan with Fundera by NerdWallet | Best for SBA equipment loans | $5,000,000 | 650 | with Fundera by NerdWallet |
Triton Capital - Equipment financing with Fundera by NerdWallet | 4.0/5 Best for Fast equipment financing | $250,000 | 575 | with Fundera by NerdWallet |
JR Capital Equipment Financing with Fundera by NerdWallet | 4.0/5 Best for Equipment financing for heavy equipment | $10,000,000 | 620 | with Fundera by NerdWallet |
OnDeck - Online term loan with Fundera by NerdWallet | 5.0/5 Best for Equipment financing for startups | $250,000 | 625 | with Fundera by NerdWallet |
Funding Circle - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Online equipment loans for businesses with strong credit | $500,000 | 660 | with Fundera by NerdWallet |
Fora Financial - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Equipment financing for bad credit | $1,500,000 | 570 | with Fundera by NerdWallet |
SBA CDC/504 loan | Best for Low-interest equipment loans | $5,000,000 | 680 | |
Here are 9 equipment financing options
Best for Equipment financing with no down payment
Best for Bank equipment financing
Max Amount
Undisclosed
Min. Credit Score
700
Best for SBA equipment loans
Best for Fast equipment financing
Best for Equipment financing for heavy equipment
Best for Equipment financing for startups
Best for Online equipment loans for businesses with strong credit
Best for Equipment financing for bad credit
Best for Low-interest equipment loans
Max Amount
$5,000,000
Min. Credit Score
680
I'M INTERESTED IN:
Our pick for
Equipment financing with no down payment
National Funding offers equipment loans with flexible qualifications and no down payment requirement.
National Funding - Equipment Financing
with Fundera by NerdWallet
Max loan
$150,000
Min. Credit score
600
with Fundera by NerdWallet
Our pick for
Bank equipment financing
Bank of America’s equipment loans can be used for a wide range of business needs, from purchasing heavy-industrial equipment to smaller office equipment.
Bank of America - Equipment loan
Max loan
Undisclosed
Min. Credit score
700
Our pick for
SBA equipment loans
The long repayment terms and low interest rates available through an SBA 7(a) make them a good option for large ticket purchases like equipment.
SBA 7(a) loan
with Fundera by NerdWallet
Max loan
$5,000,000
Min. Credit score
650
Apr range
11.50-15.00%
with Fundera by NerdWallet
Our pick for
Fast equipment financing
Triton Capital offers business equipment loans with fast processing times with funding typically within two business days.
Triton Capital - Equipment financing
with Fundera by NerdWallet
Max loan
$250,000
Min. Credit score
575
Apr range
5.99-34.99%
with Fundera by NerdWallet
Our pick for
Equipment financing for heavy equipment
JR Capital offers both equipment loans and leases with terms that start at three years and don’t typically require a down payment.
JR Capital Equipment Financing
with Fundera by NerdWallet
Max loan
$10,000,000
Min. Credit score
620
Apr range
6.99-18.00%
with Fundera by NerdWallet
Our pick for
Equipment financing for startups
OnDeck’s term loan is an option for startup businesses that have been in operation for a year and need a lump sum of money to purchase equipment.
OnDeck - Online term loan
with Fundera by NerdWallet
Max loan
$250,000
Min. Credit score
625
Apr range
27.20-99.90%
with Fundera by NerdWallet
Our pick for
Online equipment loans for businesses with strong credit
For established businesses with solid credit, Funding Circle’s business term loan can be used for almost any business purpose including the financing of equipment and machinery.
Funding Circle - Online term loan
with Fundera by NerdWallet
Max loan
$500,000
Min. Credit score
660
Apr range
15.22-45.00%
with Fundera by NerdWallet
Our pick for
Equipment financing for bad credit
With a low minimum credit score requirement, Fora Financial’s term loan can be used for a variety of purposes including the purchase of equipment.
Fora Financial - Online term loan
with Fundera by NerdWallet
Max loan
$1,500,000
Min. Credit score
570
with Fundera by NerdWallet
Our pick for
Low-interest equipment loans
SBA 504 loans offer low interest rates and the funds can be used to purchase long-term equipment and machinery.
SBA CDC/504 loan
Max loan
$5,000,000
Min. Credit score
680
Apr range
5.00-7.00%
What is equipment financing?
How equipment financing works
Equipment financing rates and terms
- Anecdotally, equipment financing interest rates range from 4% to 45% APR.
- Generally, terms on business equipment loans are based on the anticipated life of the equipment or machinery you’re purchasing. A shorter term may have you scrambling to make payments, and a longer term could mean you’ll be paying for the equipment after you stop using it.
Equipment loans vs. equipment leasing
Equipment loans | Equipment leasing | |
---|---|---|
How it works | You borrow money from a lender to purchase equipment. | You rent equipment from a lender. |
Ownership | You own the equipment at the end of the loan term. | The lender owns the equipment. At the end of the lease, you may have the option to renew or buy the equipment. |
Cost | Higher monthly payments, but costs less over time. | Lower monthly payments, but costs more over time. |
Best for | Equipment you plan to use for longer than 36 months. | Equipment you plan to use for 36 months or less. |
Pros and cons of equipment financing
Pros
- Affordable. Equipment loans can provide competitive interest rates and long terms. SBA 7(a) loans, for example, typically offer terms up to 10 years for equipment purchases.
- Equipment ownership. You’ll own the equipment outright once the loan is repaid. If you need cash for other business purposes, you might arrange a sale-and-leaseback agreement with the equipment finance company; that involves selling the equipment to a lender in return for quick cash and then leasing it back from that lender.
- Self-collateralizing. Because the equipment is often used as collateral for the loan, you may not need to rely as heavily on personal credit, time in business or other collateral to qualify. This could help startups and businesses with bad credit qualify for equipment financing.
- Tax savings. At tax time, the interest you’ve paid is deductible, and you may also qualify for a depreciation tax benefit.
Cons
- Outdated equipment. If the financed equipment becomes outdated, you’ll need to sell or dispose of it.
- Down payment. An equipment loan may require a high initial down payment.
- Maintenance costs. When you buy equipment, you are typically responsible for maintenance costs.
- No trial run period. When you commit to buying equipment, you often give up the opportunity to try out the equipment — something that would be available through a short-term lease.
Where to get equipment financing
Online lenders
Banks and credit unions
SBA lenders
Specialized equipment financing companies
Get equipment financing in your industry
- Learn more about gym equipment financing.
- Compare the best financing options for restaurant equipment.
- Find online lenders that offer dental equipment financing.
- Review options for farm equipment loans.
How to apply for an equipment loan
1. Determine the size of your loan
2. Review your qualifications
3. Compare lender offers
- Interest rate. One of the main factors that determines the cost of a loan is the interest rate. A lower interest rate can often save you money.
- Loan fees. Additional fees such as origination and processing fees add to the cost of a loan. Large loan fees can, in some cases, offset the benefits of a lower interest rate.
- Annual percentage rate. APR uses the interest rate plus loan fees to provide the total cost of the loan. It can be helpful in comparing loan offers with different rates and fees to determine the overall cost of each loan.
- Repayment term. The repayment term affects your monthly payment amount and the total interest you pay. A shorter repayment term may save you money, but the monthly payment shouldn’t be more than your budget allows.
- Prepayment penalties. Some lenders charge a fee when a borrower pays off their loan early. A loan with a prepayment penalty may not be the right fit if you think you may want to pay it off before the term ends.
- Funding time. There are times you may need to prioritize funding speed for a loan. However, keep in mind that faster funding often means higher interest rates and shorter terms.
4. Gather documentation and apply
- Basic information about you and your business.
- Personal bank statements and tax returns.
- Business bank statements and tax returns.
- Business financial statements.
- Description of equipment and estimated cost.
5. Review equipment loan offer and accept
Find the right business loan
Methodology
Wondering if you qualify?
It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.