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If you have bad credit, you can still get equipment financing from online lenders. Although these lenders have more flexible credit requirements than banks or credit unions, they will still check your credit history as part of the application process.
Be wary of any company that promises “no credit check” or “guaranteed approval,” as these may be predatory lenders or scammers looking to take advantage of your business.
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Why equipment financing requires a credit check
Equipment lenders require a credit check to evaluate your financial history and determine your risk of defaulting on a loan. They use this information — along with your other credentials — to decide whether or not to approve your application, as well as set your interest rate and repayment terms.
Because the equipment you’re looking to purchase serves as collateral on your small-business loan, however, lenders may be more flexible with their eligibility requirements. You may not need to rely as heavily on your credit history or time in business to qualify for equipment financing.
How to get equipment financing with bad credit
You can get equipment financing with fair or bad credit — even though lenders will still pull your credit history. Some equipment lenders may provide funding to small-business owners with personal credit scores in the 500s, although they’ll likely charge higher interest rates and offer shorter repayment terms.
If you have bad credit (a score below 630), here are three tips to help you get equipment financing for your business.
1. Organize your business’s finances
Before you start comparing lenders and submitting loan applications, you should organize your finances to understand your business’s qualifications and where you stand from a lender’s perspective.
You’ll want to gather any documents that highlight your business’s strengths, like cash flow or annual revenue, especially if you’re concerned about your credit score. You can also prepare standard application documents such as bank statements, tax returns, profit and loss statements, and balance sheets.
2. Boost your application
There are other ways you can boost your equipment financing credentials before submitting an application:
- Build up your credit. You can check your personal credit score and try to build it up to help your loan application. You can look for errors on your credit report and dispute them with the applicable credit bureau, make more frequent payments, as well as pay down debt.
- Offer additional collateral. Although the equipment you’re purchasing serves as collateral on the loan, you might provide additional collateral, such as property or other equipment, to further secure the financing.
- Increase your down payment. Equipment lenders may require a down payment of up to 20%. If you can offer a larger down payment on your business loan, it may help increase your chances of approval, as well as lower your monthly payments.
- Get a co-signer. A co-signer with strong credit may be able to help you qualify for an equipment loan if you have fair or bad credit. However, note that your co-signer will be held responsible for the debt if you can’t repay.
- Provide a detailed business plan. Not all lenders require a business plan for a loan application, but providing one can give additional insight into your company’s goals and strategies for achieving them. This information can help instill more confidence in the lender.
3. Research and compare multiple lenders
When looking for bad credit equipment financing, you should consider several different lenders to find the best deal for your business. As you evaluate your options, you can compare factors such as:
- Maximum loan amount.
- Repayment terms and schedule.
- Interest rates and fees.
- Collateral and/or down payment requirements.
- Funding speed.
- Application process.
- Lender reputation and customer support.
Bad credit business loans typically have higher interest rates and shorter repayment terms than other types of financing, so it’s even more important to evaluate the cost of the loan and make sure it’s something you can afford.
Best bad credit equipment financing options
| Product | Max loan amount | Min. credit score | Learn more |
|---|---|---|---|
 National Funding - Equipment Financing NerdWallet Rating Apply now with Fundera by NerdWallet | $150,000 | 600 | Apply now with Fundera by NerdWallet |
 Triton Capital - Equipment financing NerdWallet Rating Apply now with Fundera by NerdWallet | $250,000 | 575 | Apply now with Fundera by NerdWallet |
 JR Capital Equipment Financing NerdWallet Rating Apply now with Fundera by NerdWallet | $10,000,000 | 620 | Apply now with Fundera by NerdWallet |
 Balboa Capital - Equipment Financing | $500,000 | 620 | |
 CAG Truck Capital Commercial Truck Financing | Undisclosed | Undisclosed |
National Funding
Best for: Startups.
If you’re a startup with bad credit, National Funding may be a worthwhile option for equipment financing. This lender offers equipment loans or equipment leases up to $150,000 with repayment terms of up to
60
months.Interest on this financing is charged as a factor rate, starting as low as 1.1 for borrowers that have excellent credit. You should always translate a factor rate into an APR to get a better sense of how much the loan actually costs.
National Funding can fund applications in as little as 24 hours — and offers a discount for borrowers to repay their loans early.
To qualify for this equipment financing, you’ll need a minimum credit score of
600
, at least 6
months in business and at least $250,000 in annual gross sales.Triton Capital
Best for: Low starting rates.
Triton Capital can be a good option for fast, affordable equipment financing. The lender offers funding for both used and new equipment across a wide range of industries.
You can get an equipment loan up to $250,000 with terms ranging from
12
to 60
months. Interest rates start as low as 5.99
%. You can apply for Triton equipment financing online and receive same-day approval. Funding typically occurs within one to two business days.To qualify, you’ll need a minimum credit score of
575
, a minimum annual revenue of $250,000 and at least 24
months in business.JR Capital
Best for: No down payment.
JR Capital can finance new or used equipment up to $10 million — with no down payment required. Repayment terms on these equipment loans typically vary from
36
to 72
months and interest rates range from 6.99
% to 18
%.You can apply for JR Capital’s equipment financing easily online, and access a simplified one-page application for loans up to $350,000. Funding may take up to 48 hours, but in some cases, can be available the same day.
To qualify, you’ll need a minimum credit score of
620
and at least 24
months in business. JR Capital does not have a formal annual revenue requirement.Balboa Capital
Best for: Same-day funding
If speed is your priority, you might consider Balboa Capital for equipment financing. During regular business hours (Monday through Friday, 7 a.m. to 4 p.m. PST), Balboa can provide one-hour approval decisions and access to funds within the same day.
Balboa offers financing for new or used equipment, up to $500,000. Repayment terms typically range from
24
to 60
months, although low-cost equipment agreements may have shorter terms. Interest rates range based on your business’s credentials, your loan amount and repayment terms.To qualify for equipment financing from Balboa, you’ll need a minimum annual revenue of $100,000, a minimum credit score of
620
and at least 12
months in business.CAG Truck Capital
Best for: Commercial truck financing.
CAG Truck Capital may be a good option if you’re looking for new or used semi truck financing. CAG specializes in equipment financing for semi trucks, dump trucks and long hood trucks, even offering a unique program for higher-mileage vehicles.
CAG Truck Capital offers flexible qualification requirements; the lender is willing to work with startups and borrowers with bad credit. Although it doesn’t list specific minimum requirements online, it does state that startups and borrowers with a credit score under 600 may require an additional down payment.
Similarly, interest rates start as low as
10
%, but ultimately vary based on your credit and financial history, among other factors. Startups and borrowers with bad credit may receive higher rates.You can complete a loan application online and CAG’s representatives will work with you to find a custom solution for your needs. Approvals are available as fast as the same day.
Looking for equipment financing in a specific industry? Check out our guides for:
Alternatives to bad credit equipment financing
If you can wait to apply for funding, building up your credit will help you access more affordable equipment financing options. On the other hand, if you need capital more quickly, you might consider these alternatives:
- Equipment leasing. Unlike equipment financing, leasing allows you to rent the equipment you need from a lender or vendor. You use the equipment for a set period of time, make monthly payments and at the end of your agreement, you return the equipment. You may also have the option to start a new lease or buy the equipment. Some equipment leasing companies can work with borrowers with bad credit.
- Short-term loans. Short-term business loans may be a good option for smaller equipment purchases that can be repaid in 24 months or less. These loans are available from online lenders who typically have flexible qualification requirements. Short-term loans can have high interest rates, however, and frequent payments may impact cash flow.
- Microloans. These loans are typically offered in amounts up to $50,000 and issued by nonprofit or community lenders. Microlenders often have flexible qualifications and may be willing to work with borrowers who have bad or no credit. These organizations also tend to provide educational training for business owners and may be able offer resources to help you manage your finances.
- Business grants. Small-business grants provide free funding that can be used for a variety of purposes, including equipment purchases. Although grant applications can be time-consuming and competitive, they don’t typically include a minimum credit score requirement — making them a good option if you can secure them.
- Merchant cash advances. With a merchant cash advance, or MCA, you receive a lump sum of capital and repay it using a percentage of debit and credit card sales, plus a fee. These products usually fund quickly and are easy to qualify for — even if you have bad credit. MCAs are also one of the most expensive types of business financing, however, and can create a cycle of debt that’s difficult to break. In general, you should consider all other loan options before a merchant cash advance.
Frequently Asked Questions
No credit check equipment financing means a lender does not pull your credit history when evaluating your loan application. Most equipment lenders, however, require a credit check — even if they work with businesses with bad credit.
You may be able to qualify for equipment financing with a credit score as low as 575. Because the equipment you’re purchasing serves as collateral on the loan, some lenders may not weigh your credit history as strongly when evaluating your application.
A stronger credit score, however, will help you qualify for an equipment loan with the most competitive rates and terms.
Equipment loans can be easier to get than other types of small-business loans. The equipment you purchase serves as collateral on the loan, meaning you may not have to rely as heavily on other criteria, such as personal credit or time in business to qualify. Startups and businesses with bad credit may qualify for equipment loans.
A version of this article originally appeared on Fundera, a subsidiary of NerdWallet.
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