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There are many times when a business may need to purchase equipment. The right equipment can not only be necessary for day-to-day operations but can also help a business grow, expand, and improve efficiency. But costly equipment may be out of the budget for many small- and medium-sized businesses.
Equipment doesn’t just mean heavy machinery. For instance, small companies up to $50 million a year in revenue spend 6.9% of that revenue on IT costs. This is enough to impact many businesses' bottom line.
Similar to personal loan products, companies can get the equipment they need through loans from equipment financing lenders. These loans provide flexible access to tens (or even hundreds) of thousands of dollars when your business needs them most.
To help you find the best equipment financing for you and your unique business needs, we have provided the following guide. We compared more than 10 of the top industry leaders looking at factors like repayment terms, loan limits, credit score and business history requirements, fees, and even the types of equipment that can be purchased with those funds.
Best Overall : Crest Capital
Our top overall pick for the best equipment financing for small businesses is Crest Capital because it offers equipment loans of up to $1 million and many of the loans receive a decision in just a few hours.
Same-day approval for most loans
Will finance 100% of costs
No closing costs
Loans up to $1 million
Only requires 2 years financial history to apply
Financing not offered to startups
Collateral requirements are vague
Crest Capital was established in 1989 as a small- and medium-sized business funding and leasing lender, growing establishments across the nation. This lender prides itself on saying "yes" when the bank says "no" and makes it easy to get fast approvals on the funds businesses need most.
We chose Crest Capital as our overall top pick for the best equipment financing because it offers such a broad (yet competitive) range of products and services. Through Crest, businesses can get up to $1,000,000 in equipment funding with loan repayment terms ranging from 24 to 72 months (84 months is available on larger loans above $250,000). If you’re borrowing less than $250,000, there are no income statements required, speeding up the process even more.
Both new and used equipment can be financed with Crest, from a variety of different industries. Businesses are able to finance up to 100% of the equipment expenses—including “soft costs” like delivery fees, taxes, or installation—with same-day approval in many cases.
Crest offers financing with no closing costs or business liens. Collateral may be required, though this lender doesn’t publish specifics.
Equipment financing from Crest is offered to both small, mom and pop establishments as well as medium-sized businesses. While you will need to have a good credit score, it’s OK if your credit history is limited. Crest just won’t approve your funding request if your credit includes a past history of missed payments, discharged balances, or irresponsible credit account management (i.e.: a limited history is OK here while a bad history is not).
Crest Capital does not offer larger loans to startups. Generally, your business will need to have been operational for at least two years in order to get approved for a credit equipment.
Best for Expanding Businesses : National Funding
For expanding businesses, National Funding is the best choice for equipment financing. It only requires you to be in business for only six months and has a low credit score requirement for approval.
No down payment
Low FICO score requirement
Excellent consumer reviews
Equipment can be new or used
Equipment financing maxes out at $150,000
No matter the industry or type of equipment necessary, National Funding is there to help businesses with at least six months in business get the funding they need most to expand.
National Funding offers equipment financing of up to $150,000 with credit decisions in as little as 24 hours. There are no equipment limits through this lender, either. Whether you want to buy or lease either new or used equipment, National Funding is willing to provide the funds.
Borrower requirements are fairly straightforward: you’ll need to have been in business for at least 6 months, have a FICO credit score of 575 or higher, and be able to provide an equipment quote from the vendor or seller.
Financing is available to businesses in all 50 states and the District of Columbia. There is no down payment required. In determining the length of the loan, the company is flexible and things are done on a case by case basis. Terms can be short or over a decade.
Best for Bad Credit : Currency
It’s tough to get any business loan with bad credit, but this is especially true when you’re buying equipment that can run into the hundreds of thousands of dollars. With loan options for all credit profiles, Currency is our top lender choice for subprime equipment financing.
Loans for most credit profiles
Financing up to $500,000
Online approval is usually fast and same-day funding is possible
No down payment required
Maximum repayment term is 72 months
Loan fees may apply
When it comes to shopping around for the best equipment funding for your business, credit can play a significant role. Not only will your credit score impact the rate you’ll receive, but it can even limit the terms you’re offered or exclude you from certain lenders altogether.
That’s why Currency is our top lender pick for business borrowers with bad credit. The company offers funding to customers with most credit profiles. Just expect subprime credit scores to potentially result in lower funding limits and/or higher interest rates.
Equipment financing through Currency provides borrowers with up to $500,000. Approval is often fast and same-day funding is sometimes possible. No down payment is required, though choosing to put cash down may result in better financing terms.
Five years is the most common term and six is sometimes possible. Loan origination fees may apply.
Best for Heavy Equipment : Balboa Capital
With reasonable eligibility requirements and same-day funding in many cases, Balboa Capital earns our top nod for heavy equipment financing. They offer up to $500,000 with competitive interest rates to boot.
Qualify for financing in an hour
Same-day funding is available
Financing up to $500,000
Excellent consumer ratings
Credit score requirements are contradictory
Limited repayment terms available
$100,000 annual revenue requirement
Doesn't lend to brand new businesses or startups
Heavy equipment is one of the most expensive pieces of machinery that a small business could need or purchase. It’s no wonder, then, that so many businesses turn to equipment financing when shopping around for heavy machinery, versus buying with cash.
Our top choice for heavy machinery financing would be Balboa Capital. This lender offers up to $500,000 in equipment funding with repayment terms from 24 to 60 months. Applying online is simple and doesn’t require a bunch of business financials; you’ll usually have a credit decision within an hour, and same-day funding is available in many cases.
In order to get heavy machinery financing through Balboa, your business will need to be operational for at least a year and have an annual revenue of $100,000 or more. The company says that all credit is considered, but also says they look for at least a score of 620. This is slightly confusing.
Best for Used Equipment : US Business Funding
Whether you’re looking to purchase new or used business equipment—or even purchase directly from a third-party—US Business Funding is willing to finance the transaction, earning it our top spot for used equipment.
New, used, and third-party sales accepted
Equipment loans from $5,000 to $50 million
Credit decision in 60 seconds
24-hour funding available
Repayment terms up to 72 months
100% soft cost roll-in allowed
95% loan approval
Only $75,000 available with short-form application (no financials)
Most programs require a two-year business history
All financing is technically a “lease”
Offering financing options in any number of industries, US Business Funding is there for a variety of businesses and equipment needs.
With US Business Funding most equipment loans are between $10,000 and $2 million. However, loans as low as $5,000 and high as $50 million are possible. If you plan to borrow $75,000 or less, you can do so with a one-page credit application, and there is no need for lengthy financials. Beyond $75,000, however, you should expect to provide a range of business and financial documentation.
Equipment financing is offered for new or used equipment. Where US Business Funding stands out, though, is that it also allows for purchases of equipment from third parties, which may be helpful depending on your industry and the exact equipment you’re looking to buy.
In order to qualify for most financing programs through US Business Funding, your business will need to have been operational for at least two years. However, there is a program option for businesses that are at least six months old and another for one year old businesses.
Credit approval takes only 60 seconds. Many applicants receive funding in as little as 24 hours, and the lender currently boasts a 95% approval rate. Repayment terms are up to 72 months depending on the program. Interest rates are as low as 3.5% APR right now, though you can expect your rate to vary based on things like the financing terms you request, your business’ history, and credit score.
Lastly, you can roll in 100% of the costs involved with your equipment purchase, including “soft costs” like installation, delivery, training, and more.
It’s important to note that all of this lender’s programs are equipment leases. With that said, there are programs where at the end of the lease, you can purchase the equipment for $1 if you want to keep it ($1 Buy Out).
Best for Large Loans : CIT Bank
Offering up to $500,000 with a quick online application (and up to $1 million with financials), CIT Bank makes it quick and easy to get a large equipment financing loan for your business.
Up to $500,000 without financials
Online application takes as little as three minutes
Flexible repayment terms
New or used equipment allowed
With capital equipment financing, up to $100 million is possible
Same-day funding not available
Credit score thresholds may be high
Business history required
Earning our pick for best large equipment financing is CIT Bank, an institution that has been offering financing options to consumers for more than a century. CIT is a division of First Citizens Bank. The bank is a top 20 U.S. financial institution and has over 600 branches across 22 states.
CIT Bank offers equipment loans of up to $1 million to small businesses, with repayment terms ranging from six to 72 months in length. With a simple application-only loan, you can borrow up to $500,000 without needing to submit any additional records. If you’re willing to compile and turn over financials, you can borrow up to $1 million. Need even more money? CIT’s Capital Equipment Financing program offers up to $100 million (and beyond, in some cases), with repayment terms up to 10 years in length.
CIT Bank’s online application takes only three minutes to complete and submit, and funding can take as little as one business day. Financing is offered for both new and used equipment, and rates are currently as low as 5.49% APR.
You will be asked to show business history of some length. In many cases, credit score requirements can be quite high. Also, same-day financing is not available, but approved funds can be in your account as soon as the next day.
Financing options are quite flexible as well. You can choose between monthly, seasonal, and deferred repayment options, depending on what works for you and your business. CIT Bank also offers a $1 Buyout option, either as a lease or as an equipment financing agreement (EFA). With a fair market value lease, you have the option to purchase your equipment at the end of the term or simply return it, and CIT also allows for net 30-, 60-, or 90-day payments.
What Is Equipment Financing?
If you own a small business and need to purchase equipment of any kind, the cost can often be prohibitive. With equipment financing, though, you can either take out a loan or lease that equipment from an equipment financing lender.
This allows you to get the machinery or other equipment you may need to operate, expand, or profit, without needing to pay the full cost upfront.
What Are the 3 Types of Financing?
There are three different types of financing that you may encounter: debt financing, equity financing, and combination financing. Each of these differs from leasing.
Debt financing is your typical installment loan; you borrow a one-time, fixed amount from a lender and then pay it back over time according to your loan agreement. Equity financing is where you receive funding in exchange for a portion of the equity in your business; you are not obligated to repay the capital you received as part of an equity financing.
Combination financing is a blend of the two. In many cases, this means accepting capital in exchange for equity in a business, with the understanding that at least a portion of those funds will be paid back over time.
All three of these differ from leasing in that leasing is not necessarily a path to ownership. Rather than receiving funding and purchasing equipment, for instance, a lease agreement purchases the equipment for you. At the end of your lease term, you will no longer have a payment to make but the equipment won’t belong to you, either.
In some cases, there may be a buy-out clause, where you can purchase the equipment for a very small price if you still want it at the end of the lease.
How Long Can You Finance Used Equipment?
Finance terms may vary by lender, borrowed amount, and equipment type. You can typically expect to finance used equipment for somewhere between two and seven years, however.
Some lenders may cut this off at five years, especially for used or lower-cost equipment, while others might give you as many as 10 years to repay the loan.
What Credit Score Is Needed to Finance Equipment?
As with most financial products, the better your credit, the better the financing options and products offered to you. When it comes to equipment financing for your business, you should plan to have a credit score of at least 650 to 700 if you want to receive the most competitive interest rates and repayment terms.
There are some lenders willing to forgo these limits, though, accepting scores as low as 575 or even considering all credit scores. However, a low score or negative credit history may result in limited financing options and more expensive lending in the end.
How We Chose the Best Equipment Financing Companies
We looked at and compared the top 10 equipment financing lenders in order to provide this comprehensive guide. In order to choose the top company for each category, we compared factors such as financing options offered and the type of equipment that could be purchased. We also looked at the typical speed for both credit decisions and funding, fees and penalties involved in the loan, and what sort of borrower requirements were in place.