Skip to content

Equipment Financing: 9 Best Companies and Lenders of 2024

By Randa Kriss
Last updated on February 6, 2024
Edited bySally Lauckner
Fact checked and reviewed

⏰ Estimated read time: 8 minutes

Banks, online lenders and specialized equipment financing companies offer loans to help you purchase costly equipment and machinery for your business.

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

Equipment financing is a loan for purchasing machinery and equipment essential to running your business. You can use an equipment loan for anything from office furniture and medical equipment to farm machinery or commercial ovens.
Small-business equipment loans are available from bank, online and SBA lenders. There are also specialized equipment finance companies that focus solely on this type of small-business loan.

How much do you need?

with Fundera by NerdWallet

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

LenderNerdWallet RatingMax loan amountMin. credit scoreNext steps

Funding Circle - Online term loan

with Fundera by NerdWallet

4.5/5

Best for Online equipment loans for businesses with strong credit

$500,000660

with Fundera by NerdWallet

OnDeck - Online term loan

with Fundera by NerdWallet

5.0/5

Best for Equipment financing for startups

$250,000625

with Fundera by NerdWallet

Fora Financial - Online term loan

with Fundera by NerdWallet

4.5/5

Best for Equipment financing for bad credit

$1,500,000500

with Fundera by NerdWallet

National Funding - Equipment Financing

with Fundera by NerdWallet

4.5/5

Best for Equipment financing with no down payment

$150,000600

with Fundera by NerdWallet

Triton Capital - Equipment financing

with Fundera by NerdWallet

4.0/5

Best for Fast equipment financing

$250,000575

with Fundera by NerdWallet

TAB Bank - Term loan

Best for Bank equipment financing

$300,000660

SBA 7(a) loan

with Fundera by NerdWallet

Best for SBA equipment loans

$5,000,000650

with Fundera by NerdWallet

SBA CDC/504 loan

Best for Low-interest equipment loans

$5,000,000680

Bank of America - Equipment loan

4.5/5

Best for Traditional bank equipment financing

Undisclosed700

Here are 9 equipment financing options

Best for Online equipment loans for businesses with strong credit

Funding Circle

Max Amount

$500,000

Min. Credit Score

660

Best for Equipment financing for startups

OnDeck

Max Amount

$250,000

Min. Credit Score

625

Best for Equipment financing for bad credit

Fora Financial

Max Amount

$1,500,000

Min. Credit Score

500

Best for Equipment financing with no down payment

National Funding

Max Amount

$150,000

Min. Credit Score

600

Best for Fast equipment financing

Triton Capital

Max Amount

$250,000

Min. Credit Score

575

Best for Bank equipment financing

TAB Bank

Max Amount

$300,000

Min. Credit Score

660

Best for SBA equipment loans

U.S. Small Business Administration

Max Amount

$5,000,000

Min. Credit Score

650

Best for Low-interest equipment loans

U.S. Small Business Administration

Max Amount

$5,000,000

Min. Credit Score

680

Best for Traditional bank equipment financing

Bank of America

Max Amount

Undisclosed

Min. Credit Score

700

I'M INTERESTED IN:

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

Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.
May fund quickly

Max loan

$500,000

Min. Credit score

660

Apr range

15.22-45.00%

Funding Circle is an option for established businesses that are financing an expansion or refinancing debt.

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

OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.
May fund quickly

Max loan

$250,000

Min. Credit score

625

Apr range

35.40-99.90%

OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.

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

Fora Financial can be a good fit for borrowers who may fall short of qualifying for traditional bank financing or young but established small businesses looking for speedy financing.

Max loan

$1,500,000

Min. Credit score

500

Fora Financial can be a good fit for borrowers who may fall short of qualifying for traditional bank financing or young but established small businesses looking for speedy financing.

with Fundera by NerdWallet

Our pick for

Equipment financing with no down payment

National Funding offers equipment financing with flexible qualifications and no down payment requirement.

National Funding - Equipment Financing

with Fundera by NerdWallet

Borrowers who can't qualify for more traditional loan options might consider National Funding for fast access to capital.

Max loan

$150,000

Min. Credit score

600

Borrowers who can't qualify for more traditional loan options might consider National Funding for fast access to capital.

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

4.0
NerdWallet rating 

with Fundera by NerdWallet

Triton Capital offers fast equipment loans up to $250,000 for businesses in a range of industries.
4.0
NerdWallet rating 

Max loan

$250,000

Min. Credit score

575

Apr range

5.99-34.99%

Triton Capital offers fast equipment loans up to $250,000 for businesses in a range of industries.

with Fundera by NerdWallet

Our pick for

Bank equipment financing

With an online application process, TAB Bank’s business term loan can be used to finance equipment purchases or for other business activities.

TAB Bank - Term loan

TAB Bank offers competitive interest rates for business owners with strong credit — and can sometimes fund faster than an SBA loan.

Max loan

$300,000

Min. Credit score

660

Apr range

8.99-35.99%

TAB Bank offers competitive interest rates for business owners with strong credit — and can sometimes fund faster than an SBA loan.

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

7(a) loans are issued by private lenders and backed by the SBA. They offer long repayment terms and low interest rates.
Lowest interest rate

Max loan

$5,000,000

Min. Credit score

650

Apr range

11.50-15.00%

7(a) loans are issued by private lenders and backed by the SBA. They offer long repayment terms and low interest rates.

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

SBA 504 loans are designed to promote business growth and job creation through the purchase or upgrade of major fixed assets.

Max loan

$5,000,000

Min. Credit score

680

Apr range

5.00-7.00%

SBA 504 loans are designed to promote business growth and job creation through the purchase or upgrade of major fixed assets.

Our pick for

Traditional 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

Bank of America offers equipment loans starting at $25,000 with no set limit and loan terms of up to 5 years when secured by business assets.

Max loan

Undisclosed

Min. Credit score

700

Bank of America offers equipment loans starting at $25,000 with no set limit and loan terms of up to 5 years when secured by business assets.

How Much Do You Need?

with Fundera by NerdWallet

What is equipment financing?

Equipment financing refers to a loan that's used to purchase business machinery and equipment. These loans are typically structured as term loans that you repay, with interest, over a specific period of time.
You can use equipment financing to buy assets such as office and computer equipment, industrial machinery and business vehicles.

How equipment financing works

Equipment financing is a type of asset-based financing, which means the equipment itself is collateral for the loan.
You can get an equipment loan equal to up to the full value of the equipment you’re looking to purchase — depending on which equipment finance company you use and your business’s qualifications.
Some small-business lenders may also pay for soft costs, such as delivery, installation, warranties, assembly and other one-time expenses required to get your equipment set up and running. Certain equipment financing companies will finance a portion of these costs on top of the full value of your equipment — offering, for example, 125% financing — 100% for the equipment, 25% for soft costs.
Other equipment financing companies, however, may finance only a percentage of the cost of the equipment, say 75%, and allot the remainder of the loan (25%) to your soft costs.
Because soft costs typically require a large investment upfront when you purchase your equipment — and don’t add value to the equipment long term — it can be helpful to find an experienced equipment financing company that will finance some of these expenses.
This way, you’re receiving the same interest rate to finance your soft costs as you are for the rest of your equipment loan — and you don’t have to use funds you have on hand or take out a separate loan to cover them.

Equipment financing rates and terms

Repayment terms and interest rates on equipment financing can vary depending on the equipment finance company, your business’s qualifications and how long the equipment you’re purchasing is projected to have value.
  • 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 financing vs. equipment leasing

Lenders may offer equipment leasing as an alternative to equipment loans. With equipment leasing, you rent the equipment from a vendor, lender or specialized equipment leasing company. At the end of the lease, you return the equipment, renew the lease or buy the equipment.
Equipment financing
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

Online equipment finance companies can offer access to equipment financing with more flexible qualifications than traditional bank or SBA loans. Some online lenders work with startups or businesses with bad credit.
Many online business lenders also offer streamlined application processes and fast financing — in some cases, funding loans within 24 hours.
Equipment loans from online equipment financing companies are typically more expensive than bank or SBA loans, however, with shorter terms and higher interest rates.

Banks and credit unions

Although banks and credit unions generally offer small business equipment loans with the most favorable interest rates and terms, they also have strict eligibility requirements. To qualify for equipment financing from a bank, you’ll typically need strong personal credit, several years in business and excellent financials.
If you can meet these requirements, however, getting an equipment loan from a bank or credit union will likely be your most affordable option. Plus, some institutions, such as Bank of America and U.S Bank have business divisions devoted to equipment financing across different industries. In addition to equipment financing, Wells Fargo also has an inventory of used commercial and industrial equipment available for sale to businesses.

SBA lenders

As an alternative to traditional bank financing, you might work with an SBA lender (typically a bank or credit union) to get an SBA loan. SBA loans have long terms — generally up to 10 years for equipment loans — and low interest rates. They also allow you to use the equipment you’re purchasing, as well as equipment you already own, as collateral.
To qualify for an SBA loan, you’ll generally need a good personal credit score, 690 or higher (although some SBA lenders may have lower score requirements), and strong business finances.

Specialized equipment financing companies

There are specialized equipment financing companies that offer loans based on the type of equipment you need for your business such as transportation equipment financing, commercial truck financing, communication equipment financing and farm equipment financing, among others.
These equipment financing companies can offer experts who are knowledgeable about the specific type of equipment you want to purchase for your business, something that may not be available at a bank or online lender. However, keep in mind that interest rates and terms offered by these finance companies are unlikely to be as favorable as those offered by a bank.
Get equipment financing in your industry:

How to apply for an equipment loan

The loan application process will vary by lender, but here are some steps to help you start the process:

1. Determine the size of your loan

Knowing the loan amount you need to purchase equipment will help you narrow your search for lenders who can offer that amount. It can also be used to estimate the amount of debt you can afford and monthly payments.

2. Review your qualifications

Number of years in business, personal and business credit scores and annual revenue are some common factors used by lenders to qualify a business for financing. Knowing how you compare to lender requirements can save you time in finding the right loan.

3. Compare lender offers

To find the best loan for your needs, you should get offers from multiple lenders and compare factors such as interest rates, fees, repayment terms and prepayment penalties.

4. Gather documentation and apply

Whether you apply online or in person, you’ll typically need the following to start the application process:
  • 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 loan offer and accept

After you receive the loan offer, review the terms and conditions carefully to make sure they match your expectations. If you have any questions, talk to your lender before you sign the business loan agreement.

Find the right business loan

The best business loan is generally the one with the lowest rates and most ideal terms. But other factors — like time to fund and your business’s qualifications — can help determine which option you should choose. NerdWallet recommends comparing small-business loans to find the right fit for your business.
Former NerdWallet writer Andrew L. Wang contributed to this article.
Last updated on February 6, 2024

Methodology

NerdWallet’s review process evaluates and rates small-business loan products from both traditional and online lenders.
We collect over 30 data points on each lender, taking into account features we consider to be small-business friendly, including: transparency of rates and terms, flexible payment options, fast funding times, accessible customer service, reporting of payments to business credit bureaus and responsible lending practices.
Each equipment financing option on this list meets the following criteria:
- Maximum loan amount of at least $150,000. - Transparent rates and repayment terms. - Funding available within two weeks of applying. - Personal credit score requirements of 700 or below. - No more than two years in business required.

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.

Learn more

Frequently Asked Questions

Close
Smart money moves for your small business

Create a free account to grow your business with tailored insights and explore small business products.

Close
Smart money moves for your small business

Create a free account to grow your business with tailored insights and explore small business products.