PrimeRates provides access to personalized business loan offers through our simple and quick pre-qualification application. Once you’re pre-qualified, you can select the best offer for you and finalize the business loan application with the lender.
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Our simple application takes less than 5-7 minutes to complete.
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Choose the offer that best fits your needs by comparing loan amounts and terms.
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Finalize your loan offer with the lender you selected to receive your funds.
Equipment financing is the process of borrowing money to fund a major equipment purchase.
An equipment finance agreement will include the interest rate at which you’re borrowing the money, any extra fees, and the terms, or timeframe in which you have to repay the funds.
Instead of having to pay for the entire cost of a piece or multiple pieces of equipment upfront, you can take out a loan that allows you to repay the cost of the equipment in installments over a certain period of time.
While most lenders won’t want to extend the terms of the loan beyond the average lifetime of the equipment, some provide repayment terms of up to 25 years. However, most equipment financing agreements come with repayment terms between two and 10 years.
In general, business loans can be a bit of a headache to qualify for, especially when compared to using other types of financing like credit cards and personal loans. Business loans, including equipment financing, often require a mountain of paperwork including proof of licensing, profit and loss statements, financial projections, and a detailed written business plan.
Many lenders also require certain qualifications to be met before approving applicants for a business loan. Some of these requirements include a certain amount of annual revenue or a minimum amount of time in business. For example, Bank of America requires business applicants to have a minimum of 2 years in business operation and $250,000 in annual revenue.
As an alternative to using equipment loans, some business owners may find more success using in-house financing from the equipment vendors themselves. Personal loans and credit cards are other common ways that business owners choose to finance their equipment purchases.
Business owners across almost every industry may find themselves with a need to finance an equipment purchase.
There are many different types of business equipment that can be financed including kitchen appliances, manufacturing equipment, construction machinery, office equipment and furnishings, medical equipment, and even commercial vehicles.
No matter what type of business equipment you are looking to obtain, using financing can make your purchase more accessible and affordable.
There are a variety of different equipment financing options for business owners to take advantage of, including:
In order to obtain equipment financing, you will need to meet the minimum credit score requirements of the vendor or financial institution you are applying through.
Whether you are using in-house financing, a traditional bank, or an online lender for your business equipment financing, you will most likely need to pass a credit check. Most lenders want to see a credit score of at least 660 in order to approve applicants for the best rates.
If your credit score is less than ideal, you may still be able to obtain financing from online lenders and credit unions who have more lenient application requirements. You can also consider using the services of a cosigner or coborrower in order to obtain your equipment loan.
Some business loans take a long time, up to 30-60 days, to go through the underwriting process and obtain approval. Even SBA-backed loans involve a significant amount of red tape and require applicants to submit a great deal of paperwork such as financial statements and a business plan.
On the other hand, equipment financing can be faster to obtain. Online lenders are often more likely to have a faster underwriting process and more lenient application requirements. In some cases, you may be able to obtain your funds within just a few business days. Likewise, in-house financing often offers one of the quickest ways to get your equipment in a rush.
As an alternative to using these types of financing, business owners can also consider taking out a personal loan to pay for their business expenses including equipment. Personal loans can be used for whatever purchases the borrower needs, often fund within a few business days, and do not require as much documentation as business loans do.
While the minimum credit score needed will depend on each individual lender, applicants still need to have a ballpark idea of what credit score is too low to qualify. Getting prequalified from a few different lenders can help you determine whether or not you will be able to obtain a loan.
Applicants can compare rates and minimum credit scores from online lenders such as Prosper and Upgrade in order to see who has the most lenient credit score requirement. For example, Upgrade will approve applicants with scores as low as 560, although interest rates may be high.
While the interest rate on your equipment purchase is dependent on a variety of factors including your credit score and the lender that you choose to borrow from, you can expect to see rates between 4% and 30% APR on equipment financing. Applicants with lower credit scores will pay more in interest, while those with prime credit scores will receive the best rates.
Applicants may also encounter various loan fees including origination fees, underwriting fees, late payment fees, and early prepayment penalties. Be sure to read through your financing terms before agreeing to your business loan or equipment purchase.
Equipment leasing offers business owners another alternative to equipment financing. In some cases, leasing may be the better financial choice for your company.
Leasing your business equipment entails renting the equipment directly from the vendor or from a specialized financing company. At the end of the lease period, business owners can either convert the lease to a purchase or return the equipment, often for a newer model.
Leasing may be a better option for those equipment purchases that require an upgrade every few years in order to stay up to date with the latest technology. Many equipment leases also offer the advantage of built-in service agreements which can save business owners money on maintenance and repairs.
Equipment purchases have their own set of advantages. Getting financing for a purchase may be easier to obtain than a lease since equipment loans are secured by the equipment itself. You may also get a better deal on an equipment purchase than when using a lease. On the other hand, equipment loans may require a sizeable down payment and can often take longer than a lease to obtain. Some business loans can take up to 30-60 days for approval.
Although repayment periods will vary from lender to lender, business financing for equipment purchases often spans between 2 to 10 years. Terms may also vary depending on the type of equipment purchased and the expected lifetime of that equipment. Extended loan terms of up to 25 years may be available from some lenders and loan programs.
A shorter term allows you to pay off the loan balance faster with larger monthly payments, while a long term loan allows you to take advantage of more affordable payments at the cost of paying more in interest over the lifetime of the loan.
Businesses will need to evaluate what financing period is best for them and how large of a monthly payment they can afford to pay.
In order to qualify for an equipment financing loan, you should have good to excellent credit and extensive, positive credit history. Because equipment financing loans are larger than many personal loans and potentially higher risk to the lender than other types of funding, they can be difficult to qualify for. If you don’t have stellar credit or have some negative remarks on your report, some lenders may allow you to apply with a co-signer or business co-owner with a stronger financial history.
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| Loan Amount: | $10,000 – $350,000 |
| APR Range: | 8.00% – 25.00%% |
| Time to Fund: | Typically 7 days |
| Loan Term: | Up to 3 years |
| How To Qualify: | 680+ Personal Credit Score $250,000+ Annual Revenue |
| Great Option For: | Borrowers With Good Credit Short & Medium-Term Financing |
| Click “Check Rates” to apply to Credibility Capital Apply Now | |
Credibility Capital is an online lender that works with businesses that have a high annual revenue and high credit scores.
 Term Loan |
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| Loan Amounts | $2,000 to $250,000 |
| APR Range | 24.00% to 99.00%% |
| Repayment Terms | Up to 3 years |
| Time to Funding | Typically 1 – 5 days |
| Click “Check Rates” to apply to StreetShares Check Rates | |
StreetShares offers business term loans ranging up to $250,000 to borrowers with good credit and strong cash flows.
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| Loan Amounts | $5,000 to $500,000 |
| APR Range | As low as 9.99% |
| Repayment Terms | Term loans up to 3 years |
| Time to Funding | As fast as 1 day |
| Click “Check Rates” to apply to OnDeck Check Rates | |
OnDeck offers loans of up to $500,000 to borrowers across a range of credit scores.
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| Loan Amount: | $30,000 – $350,000 |
| APR Range: | 9.7% – 11.04% |
| Time To Fund: | As soon as 7 days |
| Loan Term: | 10 Years |
| How To Qualify: | 675+ Personal Credit Score $100,000+ Annual Revenue |
| Great Option For: | Borrowers With Good Credit SBA Loans |
| Click “Check Rates” to apply to SmartBiz Apply Now | |
Smartbiz offers large SBA loans with some of the lowest interest rates in the industry.
Why they may be a good option for equipment financing: Smartbiz’s loan terms can be as long as 10 years and can range up to $350,000.
For Fast SBA loans: While many SBA loans can take months to fund, Smartbiz’s loans fund in as little as a week.
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| Loan Amounts | $1,000 to $100,000 |
| APR Range | 10.1% to 79.8% |
| Repayment Terms | 3 to 6 months |
| Credit Score | No minimum personal credit score required |
| Time to Funding | A few minutes to several days |
| Click “Check Rates” to apply to FundBox Apply Now | |
Fundbox offers loans of up to $100,000 to borrowers across a range of credit scores.
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| Loan Amount: | $5,000 – $2 million |
| APR Range: | 6.00% – 24.00%% |
| Time to Fund: | As early as same day |
| Loan Term: | One to five years |
| How To Qualify: | 620+ Personal Credit Score $120,000+ Annual Revenue |
| Great Option For: | Equipment Financing Competitive Interest Rates |
| Click “Check Rates” to apply to Currency Capital Apply Now | |
Currency Capital offers large business loans to borrowers with average credit scores.
Best Option For Equipment Financing: Currency Capital connects borrowers to lenders so they’re able to evaluate a variety of loan offers and find the product that’s best for them. This allows applicants to compare several equipment financing lenders at once to determine the lowest annual percentage rate and most flexible repayment term that fits their needs.
While some lenders require an in-person meeting or telephone interview, some applications are completely online, and decisions are made within minutes. Whether you’re applying in-person or exclusively online, you’ll need to have a few documents handy, including a driver’s license, bank statements, your credit score, business tax returns, and an equipment quote.
Unfortunately, almost no company will lend to you without a prior credit check. However, companies like OnDeck and Fundbox will work with borrowers who have average or poor credit scores.
» MORE: No Credit Check Business Loans
Whether you have excellent or poor credit, or are a new or established business, it’s possible to find the equipment financing option that’s right for you. No matter what your business or financial history looks like, take the time to compare several lenders’ offers in order to find the agreement with the lowest annual percentage rate and repayment terms that fit your budget.
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