Even if your credit isn’t perfect, you can still get the equipment your business needs. Online lenders offer flexible equipment financing options for business owners with bad credit — though they’ll still check your credit history when you apply.
Just be wary of any company that promises “no credit check” or “guaranteed approval.” Those claims can be red flags for scams or predatory lenders.
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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
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
First, organize your finances to understand your business’s qualifications and where you stand from a lender’s perspective.
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 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. Look for errors on your credit report and dispute them with the applicable credit bureau, make more frequent payments and pay down debt.
- Offer additional collateral. Although the equipment you’re purchasing serves as collateral on the loan, you might provide additional collateral. You can use property or other equipment to further secure your 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, consider several different lenders to find the best deal for your business. As you evaluate your options, 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.
Equipment loan calculator
Best bad credit equipment financing options
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| Product | Max loan amount | Min. credit score | |
|---|---|---|---|
 National Funding - Equipment financing Nerdwallet Rating with NerdWallet Small Business | $150,000 | 600 | with NerdWallet Small Business |
 Triton Capital - Equipment financing Nerdwallet Rating with NerdWallet Small Business | $250,000 | 575 | with NerdWallet Small Business |
 eLease - Equipment financing Nerdwallet Rating with NerdWallet Small Business | Undisclosed | 550 | with NerdWallet Small Business |
 JR Capital - Equipment financing Nerdwallet Rating | $10,000,000 | 620 | |
 Balboa Capital - Equipment financing with NerdWallet Small Business | $500,000 | 620 | with NerdWallet Small Business |
 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. The lender provides equipment loans and equipment leases — and offers a discount for borrowers to repay their loans early.
🗒️ Key details:
- Maximum loan amount: $150000.
- Repayment term: 24 to 60 months.
- Interest rate: Factor rates 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.
- Speed: As fast as 24 hours.
✅ Qualifications:
- Minimum credit score: 600.
- Minimum time in business: 6 months.
- Minimum annual revenue: $250000.
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.
🗒️ Key details:
- Maximum loan amount: $250000.
- Repayment term: 12 to 60 months.
- Interest rate: 5.99% to 34.99%.
- Speed: Within one to two business days of approval.
✅ Qualifications:
- Minimum credit score: 575.
- Minimum time in business: 24 months.
- Minimum annual revenue: $250000.
» MORE: How to finance used equipment
eLease
Best for: Large loan amounts.
eLease offers equipment financing with no maximum loan amount. You’ll need to show sufficient finances, however, to access larger loans.
🗒️ Key details:
- Maximum loan amount: No maximum.
- Repayment term: 24 to 60 months.
- Interest rate: 7.5% to 22%.
✅ Qualifications:
- Minimum credit score: 550.
- Minimum time in business: 6 months.
- Minimum annual revenue: No minimum requirement.
JR Capital
Best for: No down payment.
JR Capital can finance new or used equipment — with no down payment required. You can apply for JR Capital’s equipment financing easily online, and access a simplified one-page application for loans up to $350,000.
🗒️ Key details:
- Maximum loan amount: $10 million.
- Repayment term: 24 to 84 months.
- Interest rate: 5.99% to 18%.
- Speed: Within 48 hours of approval (in some cases, same-day funding available).
✅ Qualifications:
- Minimum credit score: 620.
- Minimum time in business: 24 months.
- Minimum annual revenue: No minimum 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.
🗒️ Key details:
- Maximum loan amount: $500000.
- Repayment term: 24 to 60 months (low-cost equipment agreements may have shorter terms).
- Speed: As fast as the same day.
✅ Qualifications:
- Minimum credit score: 620.
- Minimum time in business: 12months.
- Minimum annual revenue: $100000.
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.
🗒️ Key details:
- Repayment term: 24 to 84 months (depends on the age of the truck and life expectancy of the engine).
- Interest rate: As low as 8.9% (startups and borrowers with bad credit may receive higher rates).
- Speed: Approvals as fast as the same day.
✅ Qualifications:
- No minimum credit score or time in business requirement.
- Annual revenue depends on the industry and is flexible for startups.
- Minimum 20% down payment. Startups and borrowers with a credit score under 600 may require an additional down payment.
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. Equipment leasing allows you to rent the equipment you need from a lender or vendor. You use the equipment for a set period of time and make monthly payments. 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. These loans can be a good option for smaller equipment purchases that can be repaid in 24 months or less. Short-term loans are available from online lenders who typically have flexible qualification requirements. These loans can have high interest rates, however, and their 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 and other resources for business owners.
- Small-business grants. Grants provide free funding that you can use for a variety of purposes, including equipment purchases. Grant applications can be time-consuming and competitive, but they don’t typically include a minimum credit score requirement.— This makes them a good bad-credit option if you can secure them.
- Merchant cash advances. With a merchant cash advance (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
What is no credit check equipment financing?
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.
What credit score do you need for equipment financing?
You may be able to qualify for equipment financing with a credit score as low as 550. 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.
Is it hard to get an equipment loan?
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.
Methodology
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.
To come up with our list of the best equipment financing options for bad credit, we selected lenders with a minimum credit score requirement of 629 or less.
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.
