Question 1

What is equipment financing?

Accepted Answer

Equipment financing is a loan or lease used to purchase business equipment, machinery, vehicles, or other fixed assets. The equipment itself serves as collateral for the loan, which means down payments are typically low (0 to 20%) and qualification is based on the equipment value and the business's cash flow rather than real estate collateral.

Question 2

What types of equipment can be financed?

Accepted Answer

Equipment financing covers a wide range of business assets including heavy machinery, construction equipment, trucks and vehicles, medical and dental equipment, restaurant and food service equipment, manufacturing equipment, computers and IT infrastructure, office furniture, and fitness equipment. If the asset has a useful life and retains value, it can typically be financed.

Question 3

What are typical terms for equipment financing?

Accepted Answer

Equipment financing terms typically range from 12 to 60 months, depending on the equipment's useful life. The loan is fully amortizing (no balloon payment), and the monthly payment is fixed. Some lenders offer terms up to 84 months for longer-lived assets like heavy machinery.

Question 4

What are the interest rates for equipment financing?

Accepted Answer

Equipment financing rates typically range from 6% to 20% depending on the borrower's credit, the equipment type and age, the loan term, and the lender. New equipment from established manufacturers typically gets lower rates. Used equipment or specialized machinery may carry higher rates.

Question 5

What credit score is needed for equipment financing?

Accepted Answer

Most equipment financing lenders require a minimum credit score of 620 to 680. Some lenders offer programs for scores as low as 550, but with higher rates and larger down payments. Because the equipment serves as collateral, the credit requirements are generally more flexible than unsecured business loans.

Question 6

Can I finance 100% of the equipment cost?

Accepted Answer

Yes. Many equipment financing programs offer 100% financing (no down payment) for borrowers with strong credit and established business history. The loan covers the full purchase price of the equipment. Some programs also cover soft costs like installation, training, and delivery.

Equipment Financing

Program Parameters

Equipment We Finance

Loan vs. Lease vs. Sale-Leaseback

Equipment Loan

Equipment Lease (TRAC / FMV)

Sale-Leaseback

Frequently Asked Questions

Get Approved for Equipment Financing