Funding guide
Equipment Financing: Loans and Leases for Business Equipment
Equipment financing is a loan or lease used to buy business equipment, where the equipment itself serves as collateral. Because the asset secures the deal, approval is often easier than unsecured loans, terms usually match the equipment's useful life (2–7 years), and you may finance up to 100% of the cost.
Last updated October 23, 2026
What is a equipment financing?
With an equipment loan you own the equipment from day one and the lender holds a lien until it's paid off. With a lease, the lessor owns it and you pay to use it, often with an end-of-term buyout ($1 out or fair market value).
Providers weigh the equipment's resale value, your credit and time in business. New businesses can often qualify with a larger down payment.
- Amount
- $5k – $5M
- Term
- 2 – 7 years
- Cost
- 6% – 30% APR
- Speed
- 1 – 10 days
- Credit
- 600+
Source: industry estimates compiled by BusinessFundingQuote.com; actual terms are set by each provider.
Requirements
- Equipment quote or invoice
- 1+ year in business (startups possible)
- 600+ credit typical
- Bank statements; financials for large tickets
Pros and cons
Pros
- Equipment is the collateral
- Preserves working capital
- Fixed payments
- Possible tax advantages
Cons
- Only for equipment purchases
- Down payment may be required
- Equipment can depreciate faster than the loan
Who it's best for
- Trucking, construction, medical, restaurants
- Replacing or upgrading machinery
- Businesses that want to preserve cash
Equipment Financing vs alternatives
| Option | Amount | Term | Typical cost | Speed | Credit |
|---|---|---|---|---|---|
| Equipment Financing | $5k – $5M | 2 – 7 years | 6% – 30% APR | 1 – 10 days | 600+ |
| Business Term Loans | $25k – $2M | 1 – 10 years | 8% – 45% APR | 1 day – 4 weeks | 650 – 680+ |
| SBA Loans | $50k – $5M | 10 – 25 years | Prime + spread (capped) | 30 – 90 days | 680+ |
| Startup Business Loans | $5k – $250k | 6 months – 7 years | Varies widely | 1 day – 8 weeks | 650+ preferred |
| Working Capital Loans | $5k – $1M | 3 – 24 months | Varies by product | 1 – 5 days | 550 – 680+ |
Run the numbers with our Equipment Financing Calculator.
Frequently asked questions
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Get my free quoteEquipment Financing by industry
- Equipment Financing for Restaurants
- Equipment Financing for Trucking
- Equipment Financing for Construction
- Equipment Financing for Medical Practices
- Equipment Financing for Dental Practices
- Equipment Financing for Retail Stores
- Equipment Financing for Auto Repair Shops
- Equipment Financing for Salons & Barbershops
- Equipment Financing for Ecommerce
- Equipment Financing for Landscaping
Related funding options
Written by
BusinessFundingQuote Editorial Team
Small business finance writers
Reviewed by
Funding Review Desk
Reviewed for accuracy against current market practices
Rates and ranges on this page are typical market estimates for educational purposes, not offers. How we make money.