Best Equipment Financing and Loans of 2024
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Equipment financing is a type of small-business loan used to purchase tools and machinery for your business. Equipment lenders typically use the equipment being purchased as collateral for the loan, and some lenders may finance up to 100%, meaning you won’t be required to make a down payment.
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.
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8 best equipment financing loans
| 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 |
 SBA 7(a) loan Apply now with Fundera by NerdWallet | $5,000,000 | 650 | Apply now with Fundera by NerdWallet |
 OnDeck - Online term loan NerdWallet Rating Apply now with Fundera by NerdWallet | $250,000 | 625 | 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 |
 Bank of America - Equipment loan NerdWallet Rating | $750,000 | 700 | |
 First Citizens Bank Equipment Financing | Undisclosed | 640 | |
 U.S. Bank Equipment Financing | $1,000,000 | Undisclosed |
A closer look at our top equipment financing picks
National Funding
National Funding - Equipment Financing
$150,000
Qualifications:
Minimum credit score: 600.
Minimum time in business: 6 months.
Minimum annual revenue: $250,000.
National Funding offers equipment loans up to $150,000 with no down payment requirement. You may be able to qualify with just 6 months in business — making this a good option for startups. National Funding can approve your application in as little as 24 hours and offer funding as soon as the next business day.
SBA 7(a) loan
SBA 7(a) loan
$5,000,000
Qualifications:
Must be a for-profit U.S. business.
Unable to access credit on reasonable terms from non-government sources.
Financial qualifications determined by individual lender.
SBA 7(a) loans are available up to $5 million and offer repayment terms up to 10 years for equipment purchases. These loans offer long repayment terms and low interest rates, making them a good option for large-ticket purchases, like equipment or machinery. 7(a) loans are a good option for established businesses, as you’ll likely need multiple years in operation and solid credit to qualify.
OnDeck
OnDeck - Online term loan
$250,000
Qualifications:
Minimum credit score: 625.
Minimum time in business: 12 months.
Minimum annual revenue: $100,000.
OnDeck offers a short-term loan that can be used to purchase equipment, up to $250,000. Repayment terms are available for up to 24 months. OnDeck is a particularly good option if you need financing quickly, as you may get access to your funds the same day you sign your contract. Even if you don’t get same-day funding, OnDeck can provide capital within a few days.
Triton Capital
Triton Capital - Equipment financing
$250,000
with Fundera by NerdWallet
Qualifications:
Minimum credit score: 580.
Minimum time in business: 24 months.
Minimum annual revenue: $150,000.
If you have a lower credit score, Triton Capital may be a good option for equipment financing. Triton accepts a minimum credit score of 580 — the lowest of the options on our list. You can use funds from Triton to purchase new or used equipment, but loans max out at $250,000.
JR Capital
JR Capital Equipment Financing
$10,000,000
with Fundera by NerdWallet
Qualifications:
Minimum credit score: 620.
Minimum time in business: 24 months.
No minimum annual revenue requirement.
JR Capital offers equipment loans and leases up to $10 million — a larger maximum than many other lenders offer. JR Capital allows you to finance any type of business equipment, including trucks, trailers, construction equipment and farming equipment. Repayment terms range from 24 to 84 months and loans don’t require a down payment.
Bank of America
Qualifications:
Minimum credit score: 700.
Minimum time in business: 24 months.
Minimum annual revenue: $250,000.
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. Loans start at $25,000 and repayment terms are available up to 60 months. Bank of America offers competitive rates, starting at 6.25%. If you’re a Preferred Rewards member, you may be able to access interest rate discounts.
First Citizen Bank
First Citizens Bank Equipment Financing
Undisclosed
Qualifications:
Minimum credit score: 640.
Minimum time in business: 24 months.
First Citizens Bank offers customizable equipment financing that can be structured to meet your individual tax or accounting needs. These custom repayment plans typically have terms up to 60 months. First Citizens provides up to 100% financing for both new and used equipment — and can fund equipment loans or leases faster than other bank lenders.
U.S. Bank
U.S. Bank Equipment Financing
$1,000,000
Qualifications:
Minimum time in business: 24 months.
U.S. Bank can offer up to 125% equipment financing that includes soft costs such as installation, tax and freight. The lender issues loans up to $1 million and allows you to finance multiple pieces of equipment on one contract. U.S. Bank also offers flexible repayment options (monthly, quarterly or annually).
How we chose the best equipment loans
NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including:
Transparency of rates and terms.
Flexible payment options.
Fast funding times.
Accessible customer service.
Reporting of payments to business credit bureaus.
Responsible lending practices.
We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.
How to compare equipment financing offers
To find the best equipment loan for your needs, you can follow certain tips to help you determine what’s best for your business and compare lenders and offers.
Make sure you understand the total cost of the loan: Your interest rate is one of the main factors that determines the cost of a loan; however, any additional fees (for example, origination or processing fees) will add to the total loan cost. Large loan fees can, in some cases, offset the benefits of a lower interest rate.
An annual percentage rate (APR) uses the interest rate plus loan fees to provide the total cost of the loan and can be helpful in comparing loan offers with different rates and fees to determine the overall cost of each loan.
When you pause to think about total cost, it’s also a good time to think about the upfront cost of a down payment. Many equipment lenders are willing to finance 100%, but any money you can put down may help your chances of approval and save you money in the long run by reducing the amount you need to borrow.
Have an idea of your ideal repayment terms in mind: The repayment term affects both 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.
Some equipment lenders charge a fee when a borrower pays off their loan early, while others reward early repayment with prepayment discounts. The ability or incentive to pay off your equipment early allows you to make the best decision for your business without worrying about extra fees.
Think about time to funding: There are times you may need to prioritize funding speed for a loan, especially when it comes to equipment that may have limited availability. Online and specialized equipment lenders may offer faster funding than banks; however, that often means higher cost.
Vet your lender’s experience financing equipment: Just like your lender vets you, you can also vet it. Every lender is different, but there can be benefits — such as industry knowledge, personalized experience and timing — to a specialized lender, or at least one that has financed large equipment purchases before.
What is equipment financing?
Equipment financing refers to a loan that's used to purchase business machinery and equipment. Equipment loans are typically structured as term loans that you repay, with interest, over a specific period of time.
You can use equipment loans to buy assets such as office and computer equipment, industrial machinery and business vehicles.
» MORE: Best business auto loans
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 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 finance some of the 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 vs. equipment leasing
Equipment leasing may be an option when you’re unable to get an equipment loan or it isn’t the right fit for your needs. With equipment leasing, you rent the equipment from a vendor, lender or specialized equipment leasing company.
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. |
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. 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.
Pros and cons of equipment financing
Affordable: Equipment loans can provide competitive interest rates and long terms.
Equipment ownership: You’ll own the equipment outright once the loan is repaid.
Self-collateralizing: Since the equipment is often used as collateral for the loan, there may be less reliance on personal credit, time in business or other collateral.
Tax savings: The interest you’ve paid is tax deductible, and you may also qualify for a depreciation tax benefit.
Outdated equipment: If the financed equipment becomes outdated, you’ll need to sell or dispose of it.
Down payment: May require a high initial down payment.
Maintenance costs: When you buy equipment, you are typically responsible for maintenance costs.
No trial run period: You often give up the opportunity to try out the equipment — something that would be available through a short-term lease.
» MORE: Best startup business loans
Equipment financing rates and terms
Repayment terms and interest rates on equipment loans 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.
Additional fees can include origination fees, prepayment penalties or late or returned payment fees. Origination fees can be a flat fee or a percentage of the loan amount, usually between 0.5% and 4%.
Generally, terms on business equipment loans are based on the anticipated life of the equipment or machinery you’re purchasing.
NerdWallet’s equipment loan calculator can be used to estimate your monthly payments as well as the total cost of your loan.
Where to get equipment financing
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