Need Equipment Financing? Here Are Your Best Options

7 min read • Aug 24, 2021 • Katherine O'Malley

Small business owners often purchase equipment to keep up with customer demand or changing markets. Sometimes these purchases are planned, which means they’ll fit your budget. But more often than not, you’ll face an unplanned purchase or a big-ticket item that might be out of your cash flow reach. Luckily, equipment financing can help you buy the equipment you need, when you need it.

Equipment financing is similar to a home mortgage or a car loan in your personal life— except you use equipment financing to buy business equipment. Perhaps it’s for a significant expenditure like a 6-burner stove for your restaurant, or it could be as simple as buying a new printer for the office without dipping into your rainy-day fund.

Whatever your use case may be, you have alternatives on sources for equipment financing. It may feel daunting to sort through all the options, but we’ve got you covered with a review of some of the leading choices available today.

What Is Equipment Financing?

In a nutshell, equipment financing is a business loan used to buy equipment. Our guide can give you all the information you need to know about equipment financing.

The short version: many companies offer equipment financing options that include online applications. These can be completed in minutes and have the potential to deliver funds in as little as 1 day.

Just because the application process is easy doesn’t mean you can skip the due-diligence part of this decision. Like any loan, you’ll need to take the time to understand the terms of the offer, including the interest rate, the loan amount, and any applicable fees or down payment requirements. You should also run through ROI calculations to decide if now’s the right time to purchase the equipment.

The essential thing to remember: don’t limit yourself. If there is a piece of equipment that would help grow your business, then take the necessary steps to secure the funding to reap the rewards. Luckily, equipment financing options vary, which means it’s easier than ever to find funding to meet your qualifications and needs.

How Can Equipment Financing Be Used?

Equipment financing covers so many possible purchases. Sure, we all picture something big and impressive when we think of equipment—a backhoe or a piece of packaging machinery.

But you can also use equipment financing on a smaller scale. Do you need to replace your laptop with a newer model? Equipment financing to the rescue.

You can also buy intangible items with equipment financing like software to digitize your ordering and service processes or even a firewall to protect your business from cyberattacks.

Best Equipment Financing Options

Your bank may offer equipment financing options, but that’s typically a slow, arduous process. To help you minimize the effort of securing funding, we’ve compiled a list of equipment financing companies to consider.

Each company has unique qualification criteria (e.g., requirements for minimum time in business or minimum credit scores) and different loan products. Items to consider before you apply include:

  • What amount of funding do you need?
  • How long have you been in business?
  • What’s your annual revenue?
  • When do you need the financing (turnaround time to receive funds)?
  • What’s your credit score?
  • Does the funding need to be Section 179 friendly?
  • What payment terms are you willing to accept (e.g., length of the loan, fees and interest rate, down payment and collateral requirements, prepayment options)?

Once you’ve answered some of those questions, it’s time to take a look at the top companies offering equipment financing.

CIT

As a national bank and not a finance company, CIT’s qualification process may be more stringent than some of the other options we’ve reviewed.

Highlights:

  • Funding amounts: up to $500,000 (application only), or $1 million (with financials)
  • Required time in business: not specified on their website
  • Turnaround time: as fast as 1 day to receive funds
  • Prepayment options: potentially, depending on terms
  • Used equipment financed: yes

Crest Capital

Crest Capital uses the phrase “we help successful companies become more successful”—which means startups and businesses with bad credit need not apply.

Annual loan requalifications are not required. Generally speaking, if you make timely payments, they leave you alone.

Highlights:

  • Funding amounts: $5,000–$500,000+
  • Required time in business: operational for a minimum of 2 years
  • Turnaround time: approval in hours, time to funds not specified
  • Prepayment options: not specified
  • Used equipment financed: yes

Currency

As a marketplace lender, Currency’s baseline criteria for funding can be flexed depending on the lender. Suppose you need accommodation for a poor credit score or a specific loan term length: in that case, there might be options through Currency if you accept that fees or interest rates will vary accordingly.

Highlights:

  • Funding amounts: up to $500,000
  • Required time in business: preferably a minimum of 2 years
  • Turnaround time: varies based on the application
  • Prepayment options: depends on the lender
  • Used equipment financed: unspecified, likely depends on the lender

Funding Circle

Funding Circle provides for equipment financing via its term loan program. They do not operate in the state of Nevada.

Highlights:

  • Funding amounts: between $5,000–$500,000
  • Required time in business: minimum 2 years in business
  • Turnaround time: typically 3–10 days
  • Prepayment options: depends on the loan terms
  • Used equipment financed: yes, since this is technically not an equipment financing loan

Lendio

Lendio is fueling the American dream with more than 300,000 small business loans to date and more than $12 billion funded. With our nationwide network of 75+ lenders and easy 15-minute application, there’s a good chance we’ve got you covered even if you think you might not qualify.

Highlights:

  • Funding amounts: between $5,000–$500,000
  • Required time in business: typically at least 12 months
  • Turnaround time: can be as fast as 24 hours
  • Prepayment options: depends on the lender
  • Used equipment financed: depends on the lender

National Funding

National Funding helps businesses with bad credit scores, but they still require a credit score check for applicants. Under certain circumstances, some equipment leases may be eligible for a “Guaranteed Lowest Payment” (similar to a price-match option with qualification criteria attached).

Highlights:

  • Funding amounts: up to $150,000
  • Required time in business: 6 months 
  • Turnaround time: can be as soon as 24 hours to receive funds
  • Prepayment options: some contracts are eligible for early pay-off discounts
  • Used equipment financed: yes

Whatever you do, don’t let your lack of funding hold you back. Apply today and see if equipment financing is right for your business.

Katherine O'Malley

Katherine O'Malley is a contributor to the Lendio blog. A technology geek at heart, she splits her time between traveling, freelance writing, database administration work, and implementing SEO on her travel blog. In her free time, she loves to research the challenges small-to-midsize tourist suppliers face and find ways that technology can help them out.