Equipment Financing for Business
Fund the equipment your business needs without draining working capital.
Check If You Qualify
What Are Equipment Financing?
Equipment financing lets businesses acquire the machinery, vehicles, technology, or specialized equipment they need without paying the full cost upfront. The equipment itself serves as collateral, making approval faster and more accessible — even for high-risk industries and businesses with imperfect credit. Section 179 tax deduction eligibility, 100% financing on many programs, and terms up to 84 months make equipment loans and leases one of the most cost-effective ways to preserve working capital while acquiring revenue-generating assets. Most programs require at least 6 months in business, verifiable monthly revenue, and a minimum credit score of 550.
Equipment Financing vs. Equipment Leasing: Which Is Right for Your Business?
Equipment financing (a loan) builds ownership equity in the asset — at the end of the term, the equipment is yours. Equipment leasing provides lower monthly payments and the flexibility to upgrade to newer models at lease-end, making it ideal for technology or rapidly evolving equipment. Most businesses choose financing for long-lived assets like heavy machinery, construction equipment, or medical devices, and leasing for technology, vehicles, or equipment with faster depreciation cycles. Both structures qualify for Section 179 immediate expense deduction under current IRS rules, up to the annual limit. Vendor financing programs — offered directly through equipment manufacturers and dealers — can provide the most competitive rates for name-brand equipment purchases.
- Equipment loan: Build ownership equity, full deduction via Section 179
- Equipment lease (capital/finance lease): Lower payments, upgrade at end of term
- Operating lease: Off-balance-sheet treatment, return equipment at term end
- Vendor financing: Manufacturer-backed rates often lower than third-party lenders
- Sale-leaseback: Convert owned equipment into working capital without selling it
- Soft costs (installation, training, shipping) often included in financed amount
Equipment Financing Rates, Terms & Qualification
Equipment financing interest rates range from 4% to 16% annually depending on the borrower's credit profile, equipment type, and loan term. Most equipment financing is self-collateralizing — the equipment itself secures the loan — which makes it accessible to high-risk businesses and startups. Businesses with as little as 6 months in operation can qualify for equipment financing when the equipment has strong resale value. Used equipment is financed alongside new equipment in most programs. The 100% financing option — no money down — is available for businesses with solid credit, while startups or high-risk applicants may be required to put 10% to 20% down.
- Interest rates: 4%–16% per annum depending on credit and equipment type
- Loan terms: 24 to 84 months (most commonly 36–60 months)
- Finance up to 100% of equipment cost with qualifying credit
- New and used equipment eligible in most programs
- Section 179 deduction: Deduct full purchase price in year of acquisition
- High-risk industries accepted due to self-collateralizing equipment structure
Who This Is For
Equipment Financing are best suited for businesses that match one or more of the following profiles:
- ›Businesses that need to purchase or lease machinery, vehicles, or technology to operate or expand revenue
- ›High-risk operators who cannot access conventional bank equipment loans due to industry classification
- ›Companies looking to preserve working capital by financing equipment rather than paying cash upfront
- ›Businesses with equipment that needs upgrading or replacement to remain competitive
- ›Operators in equipment-intensive industries: construction, medical, food service, manufacturing, and transportation
How It Works
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1
Identify the Equipment
Determine the specific equipment you need — new or used. Equipment financing works for a wide range of asset categories from commercial vehicles to specialized medical devices.
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2
Apply With Equipment Details
Submit your application with the equipment invoice or vendor quote, equipment details (age, make, model for used), and basic business financials. No lengthy paperwork required upfront.
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3
Credit & Equipment Review
The lender reviews both the equipment's value and your business profile. Because the equipment is collateral, credit requirements are more flexible than unsecured programs.
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4
Approval & Documentation
Receive approval typically within 24–72 hours. Sign the financing agreement — an equipment loan note or lease agreement. No real estate closing or attorney required.
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5
Vendor Paid, Equipment Delivered
The lender pays the vendor directly. You take possession of the equipment and monthly payments begin per your agreed schedule. Ownership transfers at end of term (for loan structures).
Key Benefits
- Finance up to 100% of equipment cost
- Terms from 24 to 84 months
- Section 179 tax deduction eligible
- New and used equipment financed
- Soft costs (installation, training) often included
- Available to high-risk industries and startups
Common Use Cases
- ›Medical and dental equipment
- ›Restaurant and food service equipment
- ›Construction and heavy machinery
- ›Technology and IT infrastructure
- ›Manufacturing and production equipment
Qualification Factors
Approval is subject to underwriting. The following factors influence eligibility and offer terms:
Equipment Type & Value
The financed equipment is the primary collateral. New equipment from established vendors is easier to finance than old, heavily depreciated, or highly specialized machinery with limited resale market.
Time in Business
Most programs require 6–12 months of operating history. Startups may access limited programs with a personal guarantee and a larger down payment.
Monthly Revenue
Revenue thresholds apply. Lenders want to confirm monthly cash flow can service the equipment payment. Most programs require $8,000–$15,000+ in average monthly deposits.
Credit Score
Equipment financing is more credit-accessible than unsecured programs. Scores of 550+ are frequently approved due to the equipment's collateral value reducing lender risk.
Down Payment
Many programs are zero-down. Others require 10%–20% down for lower credit profiles, used equipment, or specialty items with limited resale value.
Industry
High-risk industries are accepted because the equipment itself — not the industry — secures the loan. Cannabis, firearms, adult entertainment, and other high-risk operators regularly access equipment financing.
What to Prepare
Have the following documents ready to accelerate underwriting and funding:
- Equipment invoice or quote from the vendor (including make, model, and serial number for used)
- 3–6 months of business bank statements
- One-page business application
- Government-issued ID for all principal owners
- Business entity documents (if financing in an LLC or corporation name)
- Prior equipment financing history or trade references (if available — helps demonstrate repayment reliability)
Pros & Cons
Advantages
- ✓Equipment itself serves as collateral — reducing credit barriers compared to unsecured loans
- ✓Preserves working capital and cash reserves for operations
- ✓Section 179 tax deduction may allow full first-year expense of the financed amount
- ✓Available to high-risk industries with limited bank access
- ✓Flexible structure: purchase financing or lease options available for different business needs
Considerations
- ×Only works for equipment purchases — not suitable for general working capital needs
- ×Equipment depreciation means collateral value declines over time — limiting refinance options
- ×Specialty equipment with limited resale market may be difficult to finance or carry higher rates
- ×Lease structures may carry higher total cost of ownership than outright financing
- ×Early payoff penalties may apply depending on lender program and structure
Frequently Asked Questions
What types of equipment can be financed?
Nearly any business-use equipment qualifies — commercial vehicles, heavy machinery, medical devices, restaurant equipment, technology, construction equipment, manufacturing systems, and more. If it generates revenue for your business, it can likely be financed.
Do I need a down payment for equipment financing?
Many equipment financing programs offer 100% financing with no down payment for qualified businesses. Startups or high-risk applicants may be required to put 10%–20% down depending on lender, credit profile, and equipment type.
Is it better to finance or lease equipment?
Financing builds ownership equity and is better for long-lived assets you will use for many years. Leasing offers lower monthly payments and upgrade flexibility — better for technology or equipment that becomes obsolete quickly.
What is the Section 179 equipment deduction?
Section 179 allows businesses to deduct the full purchase price of qualifying financed equipment in the year it is placed in service, up to current IRS limits. This can significantly reduce your effective cost of acquiring new equipment.
Can high-risk businesses qualify for equipment financing?
Yes. Because the equipment itself secures the loan and has tangible resale value, equipment financing is one of the most accessible funding types for businesses in high-risk industries that cannot qualify for unsecured loans.
Can I finance used equipment?
Yes. Most equipment financing programs accept used equipment, though lenders consider the age, condition, and remaining useful life when determining loan-to-value ratios. Newer used equipment in good condition typically finances at the same terms as new.
How quickly can equipment financing be approved and funded?
Most equipment financing applications receive a decision within 24–72 hours. Once approved, the lender pays the vendor directly and you take possession of the equipment — typically within 3–7 business days of signing the financing agreement.
Related Funding Resources
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