Equipment purchases tend to be some of the largest expenditures faced by small businesses, so it makes sense that a lot of organizations turn to lenders to cover this expense. However, some customers encounter high interest rates and restrictive application processes. Luckily, we’re here to guide you through the best providers.
| Written by Anthony Edmundson, updated on 10/20/2021 Financially Reviewed by Gordon Scott, CMT on 7/20/2021 |
| At a glance — There are dozens of alternative lenders that offer great rates and terms on equipment financing loans, making it easier than ever to find affordable deals. On this page, our experts will present the best equipment financing lenders. |
Too busy for the full read? Here's the summary of the Best Equipment Financing Options for 2022
Established in 2010, Credibly is a solid business loan company. Its central purpose is to better the speed, choice, cost and experience of its clientele. After a short time in business they ranked number 35 on the Inc. 500 list, launched numerous programs, and achieved an A+ BBB accreditation. They have funded more than $1 Billion to more than 19,000 businesses throughout America.
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Features
Credibly charges an origination fee of 2.5% of the total loan amount. They provide same day funding and their APR starts from just 1%. You can borrow amounts of up to as much as $400,000 and no borrowing fee will be incurred. However, you will need a credit score of at least 500, will need to prove at least 6 months in business, and a monthly income of $15,000. You don’t need to provide any collateral.
Our thoughts
During its time in business Credibly has shown itself to be a trustworthy and reliable small to medium-sized business fund provider. It offers customizable options with transparent and low rates. Credibly is dedicated to assisting small businesses with their growth and expansion.
Fora Financial is a direct lender that provides small business loans and merchant cash advances via an online platform. The company is based in New York and was established in 2008. The company provides approval in as little as 24 hours, funding in just three days.
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Features
Fora Financial tailors every small business loan to meet the requirements of your business. Loan terms, amounts, and requirements may differ. It offers loan amounts of between $5,000 to $5,00,000 and loan terms of up to 16 months. However, you will need to prove you have been in business for at least 12 months, that you have a minimum of $15,000 in gross sales, and that you have no open bankruptcies or dismissed bankruptcies within the past year.
Our thoughts
Fora Financial is a top option as they offer loan amounts up to $500,000 and no obligation, a free quest so you can discover how much you can loan for your small business within minutes.
Fundbox is an online lender that offers small business owners a line of credit. This provides them with the funding they require to develop and expand their startup business. Fundbox also currently provides a PPP loan funding program (Paycheck Protection Program).
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Features
Fundbox does not charge interest on its line of credit, rather it charges a weekly fixed fee, which your business will have to pay on each withdrawal. You can receive an approximate figure of the minimum total cost of a withdrawal and minimum weekly payments by making use of a calculator on Fundbox’s website. Note that this is the minimum Fundbox charge for such terms.
Our thoughts
Fundbox provides lines of credit with speedy funding, simple application, and flexible requirements. The total cost might be greater than a credit card, yet it is comparable to other products on the market. With easy repayment schedules and quick financing, Fundbox is a solid choice for your financing requirements.
Fundera is a loan marketplace that has partnered with some of the biggest industry names in order to provide some of the best rates and terms in the business.
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Fundera Features
Fundera offers the lowest starting rates on our list at just 4%, although it’s likely you’ll need excellent credit to access this. That being said, those with bad credit are welcome to apply to see what’s available and there’s no hard pull to your rating if you feel like pulling out at any time before signing.
Our thoughts
Fundera has one of the best industry reputations for equipment financing and it’s relatively easy to qualify for one of their loans. It’s definitely worth checking Fundera out. Read full Fundera review.
Lendio is a business loan marketplace that has an impressive network of more than 300 partner lenders. This greatly increases your chances of finding a good deal on equipment financing.
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Lendio Features
Lendio has impressively long repayment terms of up to five years, which is rare for equipment financing. Plus, starting rates are a very respectable 7.5% and the flexible borrowing amounts mean businesses can cover small purchases right the way through to major expenditures.
Our thoughts
While Lendio has some of the best rates and terms around, you’ll need to meet some tough eligibility criteria and only 65% of applicants will be approved. If you have good credit, though, this should be your first port of call. Read full Lendio review.
GoKapital is a relatively new alternative lender that puts flexibility and customer service at the forefront. Plus, no eligibility criteria are disclosed and the platform encourages all applications.
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GoKapital Features
GoKapital allows borrowers to purchase equipment up to the value of $5 million and has generous five-year repayment plans. Interest rates are better than you’d find at traditional banks and funding can be in your account within three days.
Our thoughts
GoKapital might not be as transparent as some providers on our list but it makes up for this with top-notch customer service and a solid all-around equipment financing package. Read full GoKapital review.
Kapitus caters to an incredibly wide range of industries and just about any major equipment purchase you can think of will be covered here. It’s a little tough to find detailed information on rates, but the platform has built up a strong reputation over the last couple of years.
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Kapitus Features
Kapitus offers up to 100% financing on equipment loans, so the sky’s the limit in terms of what you’d like to purchase. Coupled with a simple application process and fast funding, you’re definitely on to a winner. However, keep an eye out for the strict eligibility criteria as only well-established businesses will be able to apply.
Our thoughts
Kapitus is definitely worth a look, especially if you work in a niche industry and have struggled to get financing elsewhere. Read full Kapitus review.
We’ve scoured the online lending industry to hunt down the platforms with the best rates, most generous terms, and highest borrowing limits. Take a look at our table below to get an idea of what to expect.
Company | Max/Min Loan | Loan Rates | Special Requirements | Get a loan |
Up to $400,000 | As little as 1% | At least 6 months in business and monthly income of $15,000,and a credit score 500+ | Speedy pre-approval application process. | |
$5,000 to $500,000 | Not stated | At least 12 months in business, no open bankruptcies or dismissed bankruptcies within the past year, minimum of $15,000 in gross sales | ||
$1000 to $150,000 | Not stated | At least six months in business Personal credit score of 600 or higher At least $100,000 in annual revenue | ||
Up to 100% of the value of the equipment | 4% - 40% | Credit scores of 620 are preferred, but those with lower ratings can still apply. Annual revenue of $120,000 Over two years in business | Funding will usually take at least two days | |
$5,000 - $5 million | Starting from 7.5% | A credit score of 650 Business must have been in operation for 12 months $50,000 minimum annual revenue | You can secure funding at Lendio in just 24 hours | |
$30,000 - $5 million | 6% - 35% | Eligibility criteria aren’t disclosed | Funding can be secured in 3 - 5 days | |
Up to 100% of the value of the equipment | Not disclosed | A credit score of 650 Three years of business operations | You may be approved within 24 hours |
Equipment financing loans are used to purchase specific assets which are then used as collateral for the loan. Lenders cater to a huge range of small businesses and industries. Equipment purchases tend to cover quite large expenses, such as commercial ovens for restaurants, a fleet of vehicles for a delivery business, office furniture, fixtures and fittings, and industrial machinery.
If you default on your loan, the provider will be able to seize the equipment purchased to cover the debt. However, this is still a little less risky for borrowers than taking out a standard working capital loan, as no other business assets are at risk.
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Underwriting standards for equipment financing vary across lenders, but you’ll usually find some common themes:
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Business equipment financing is usually viewed as a more cost-effective and lower-risk way to acquire machinery than other forms of financing. Plus, with heavy equipment financing, you get to maintain your cash reserves because you don’t need to purchase the item outright. Each lender that offers equipment financing and small business equipment loans will have different terms, but you can usually find a lender that will finance around 80% of the asset’s total purchase price.
Generally speaking, you will need to pay the initial 20% of the cost and then repay your lender over the term of the agreement in regular payments. The amount you borrow will usually determine the length of the loan.
A lot of different factors go into determining your rates when applying for equipment financing. However, as a very rough guide, you can expect the following:
| Average Rates | Origination Fees | Down Payment |
| Between 4% - 30% | 0% to 5% | 0% - 20% of the asset |
Of course, your credit rating, financial history, profit and loss information, and monthly revenue will all play big parts in the final terms you’re offered. In addition, lenders will apply other undisclosed criteria and platforms are very reluctant to share exactly how your final rates are calculated. Generally, the better your credit score and higher your income, the lower your final rate.
Opting for finance will almost always be more expensive than buying the asset outright, but it has a much smaller impact on your cash flow.
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If you’ve got your eyes on a piece of gear that could help boost the sales of your business, there’s a good chance that equipment finance could work for you. There are now more top-quality providers than ever before on the market and the application process is incredibly straightforward.
In many cases, you could receive your funding in as little as 24 hours and it’s a great way to spread the cost of a big expense. Some might find that equipment financing is a little restrictive or that eligibility requirements are a little strict, but this shouldn’t put too many customers off. If you’ve got a good credit score and a history of solid business performance, we highly recommend financing your next equipment purchase with a loan to stay on top of your costs.
