7 Best Equipment Financing Companies and Loan Options

Best for Small Businesses: Clarify Capital

Why it's a good choice: Clarify Capital supports thousands of small businesses nationwide and across a wide range of industries. With flexible eligibility and a network of over 75 lenders, we help streamline the application process to provide your business with fast, same-day funding.

Loan Amount Range: $10,000-$7 Million

Minimum Credit Score: 550

Pros:

• Easy online application process

• APR rates as low as 6%

• Seasoned loan advisors for support

• No collateral loans available

Cons:

• Possibly short repayment terms with higher interest rates

• Certain products and services not available in every state

Loan Details:

• Requires a minimum $10,000 monthly revenue

• 6+ months in business for loan eligibility

• Loan terms range from six months to two years

• Won't impact your credit

Best for SBA Loans: Small Business Administration

Why it's a good choice: The U.S. Small Business Administration (SBA) offers a wide selection of loans that are flexible to use for any business need, including purchasing equipment. Since the SBA guarantees a percentage of every SBA loan, most small business owners can secure them with low down payments and interest rates.

Loan Amount Range: Up to $5 Million

Minimum Credit Score: 650

Pros:

• Capped interest rates

• Flexible loan repayment terms

• Variety of loan options available

Cons:

• Most loans require collateral

• Lengthy application process

Loan Details:

• Must demonstrate a need for funds

• Requires an unlimited personal guarantee

Best for Traditional Equipment Loan: Bank of America

Why it's a good choice: To purchase general-purpose equipment, Bank of America offers equipment financing as well as a line of credit with fixed rates as low as 6.75%. Through its business rewards program, you can take advantage of up to a 0.75% discount on interest rates.

Loan Amount Range: $25,000-$5 Million

Minimum Credit Score: 700

Pros:

• 0% interest on medical practice loans the first six months

• Fixed-rate loans with terms up to five years

• Discounts for veterans and through rewards program

Cons:

• Lengthy application process

• May not reveal interest rate until loan contract

• Application submissions must be in person

Loan Details:

• Offers up to 100% financing for certain loan options

• Minimum two years in business eligibility

• Requires $250,000 in annual revenue

Best for Poor Credit: OnDeck

Why it's a good choice: OnDeck offers lines of credit and term loans, including same-day loans, for small businesses to purchase necessary equipment in a quick turnaround time. It also reports on-time payments to credit bureaus, helping you build business credit over time.

Loan Amount Range: $5,000-$250,000

Minimum Credit Score: 625

Pros:

• Available to businesses with poor credit

• Offers same-day funding up to $100K

• Quick application process

Cons:

• Generally high APR rates (starting at 35.4%)

• Requires a lien on your business and a personal guarantee

• Services not available in every state

Loan Details:

• Must qualify for the prepayment benefit to cover 100% interest

• 0%-4% origination fee based on the total loan amount

Best for Fast Approval: Ameris Bank

Why it's a good choice: Ameris Bank offers up to $500K for equipment financing, which is helpful for companies purchasing heavy machinery. Quick loan approval within the hour is also available, but hard collateral is required.

Loan Amount Range: $5,000-$500,000

Minimum Credit Score: 620

Pros:

• Quick approval process, possibly within the hour

• Same-day funding for approved borrowers

• Flexible loan terms

Cons:

• Potential fees (e.g., equipment inspection fee and documentation fee)

• Requires minimum $100K in revenue

Loan Details:

• Monthly repayment plan for equipment financing; daily/weekly for short-term loans

• Requires a business operation of at least a year

• Term lengths range from two to five years

Best for Startups: Fundbox

Why it's a good choice: Fundbox is willing to work with businesses with less than six months in operation, which is advantageous for startups. It also has a low credit score requirement, offering same-day approval and next-day loans.

Loan Amount Range: $1,000-$150,000

Minimum Credit Score: 600

Pros:

• Open to borrowers with bad credit

• Allows early repayment with no fees

• Supports startups in business less than a year in operations

• Can receive funds within one business day

Cons:

• Short repayment terms (maximum 24 weeks)

• Potentially high APR rates

Details:

• $100,000 minimum annual revenue for eligibility

• Same-day approval with next-day funds

• Weekly repayment schedule

Best for Established Businesses: Funding Circle

Why it's a good choice: Funding Circles offers a wide selection of loans for small businesses as well as long-term loans up to seven years. It also doesn't require applicants to meet a minimum revenue.

Loan Amount Range: $25,000-$500,000

Minimum Credit Score: 660

Pros:

• Loan terms range from six months to seven years

• No minimum revenue requirement

• No prepayment penalty on loans

Cons:

• Borrowers must provide a personal guarantee

• Origination and late fees for missed payments

Loan Details:

• Monthly repayments

• At least two years in business

• No bankruptcies within the past seven years

What Is Equipment Financing?

Equipment financing is a business financing solution that allows you to purchase business equipment through a loan. Instead of paying for large machinery or technology up front, you can spread the cost over time, making it more manageable for your cash flow.

This type of small business loan is used for:

• Medical and dental equipment

• Construction equipment and vehicles

• Office tech, computers, and software

• Restaurant and commercial kitchen equipment

Once the loan is paid off, the borrower owns the equipment outright. Most equipment financing loans are secured by the equipment itself, eliminating the need for additional collateral.

How Equipment Financing Works

The process behind equipment financing loans is straightforward. You choose the type of equipment you need, apply for financing, and upon approval, receive funds to make your purchase. Repayment terms and monthly payments are determined based on the equipment's value, your credit score, and the expected lifespan of the asset.

Many lenders offer same-day approval with minimal documentation. Some may also include equipment leasing as an alternative, where you return the asset at the end of the lease term rather than owning it.

Pros and Cons

Understanding the pros and cons of equipment financing helps you decide whether this funding option aligns with your business needs.

Pros:

• Financing up to 100% of equipment value

• Often no need for extra collateral

• Accessible to poor credit (as low as 550 credit score)

• May offer tax savings through deductions

Cons:

• Limited only to leasing or purchasing equipment

• Possibility of high interest rates

• Origination fees and documentation costs may apply

Equipment Financing vs. Equipment Leasing

Though you can use them for the same purpose, there is a difference between equipment financing and equipment leasing. With an equipment loan, you purchase and own the equipment even though it serves as collateral.

With leasing equipment, on the other hand, you pay the vendor for the use of the equipment for an agreed term and return it afterward. You don't own the equipment.

An easier way to understand equipment financing compared to leasing is to think of renting versus owning a home.

When renting a home, you live in it for the duration of your lease but have to renew it to continue living there, and the landlord remains the owner. However, with homeownership, you pay a mortgage to purchase and live in the home as your own, and it serves as collateral if you default on the loan.

How To Get an Equipment Loan

Fortunately, receiving equipment financing is easier since the equipment will serve as collateral. However, requirements for small business owners may still vary by lender. Here are ways to prepare for an equipment loan and narrow your lender options.

1. Check Your Eligibility

When applying for general business loans, lenders typically look at personal credit score, time in business, and annual revenue. They'll also consider the value of your equipment, including the condition and resale value, to determine how much you can qualify for and your ability to repay the loan.

2. Gather Required Documents

Most lenders also request proof of your business's performance credit history. They'll likely ask for documents, including bank statements, your business plan, personal and business tax returns, personal credit score, and any licenses or certifications (if applicable).

3. Complete and Submit Your Application

The last step is to apply online and wait for approval. Traditional banks and credit unions can take several weeks to confirm the approval. Fortunately, online lenders like Clarify Capital can get same-day approval.

Discover Equipment Loans With Clarify Capital

When it comes down to it, having efficient machinery and advanced technology can make or break your business. If and when a big equipment purchase is necessary, equipment financing can supply the funds you need without breaking the bank.

Our Clarify Capital team works with a network of over 75 lenders, helping you find equipment financing options with the best rates. Get started today by contacting our dedicated advisors or applying online.

FAQs About Equipment Financing

This section covers the top FAQs about equipment financing, interest rates, credit score requirements, and how to choose the best lender.