The best equipment loans for bad credit should offer low credit score requirements, quick access to funding, and good customer service. While you may not qualify for a lender’s lowest rates with bad credit, these loans should still be able to offer competitive rates and terms compared with other lenders.
Here are my top picks for the seven best equipment loans for bad credit.
- Lendio: Best overall for multiple options
- Smarter Finance USA: Best for flexible qualifications
- National Funding: Best for small financing amounts
- Clarify Capital: Best for low credit scores
- SBG Funding: Best for high approval rates
- First Capital Business Finance: Best for custom loan options
- Balboa Capital: Best for fast funding speeds
Best Equipment Loans for Bad Credit at a Glance
Provider | Maximum Loan Amount | Estimated Starting APR | Maximum Loan Term | Annual Revenue Requirement | Minimum Credit Score |
|---|---|---|---|---|---|
 | $5 million | 7.5% | 10 | $50,000 | 520 |
 | $1 million | 10% | 5 | None | |
 | $150,000 | 15% | 5 | $250,000 | 600 |
 | $5 million | 6% | 6 | $120,000 | 550 |
 | Up to 100% of equipment value | Varies | 7 | $350,000 | 600 |
 | $3 million | 19% | 5 | $96,000 | None |
 | $500,000 | 5% | 5 | $100,000 | 620 |
Lendio: Best Overall for Multiple Options
| |
Rates & Terms | |
Estimated Starting APR | 7.5% and up |
Loan Amount | $5,000 to $5 million |
Repayment Term | 1 to 5 years |
Repayment Schedule | Monthly |
Funding Speed | As fast as 24 hours |
Qualifications | |
Credit Score | 520 |
Time in Business | None, but 12 months is recommended |
Annual Business Revenue | $50,000 |
Minimum Down Payment | Varies |
Why I Like Lendio
Lendio is my pick as the best overall company because of its ability to offer multiple lending options. It’s a broker with over 75 lenders in its network, and submitting just a single application to Lendio can allow you to be considered for each of those lenders, saving you time and money. While other brokers like Clarify Capital are on our list, Lendio has more flexible payment terms and easier qualification requirements.
If you decide to work with Lendio, you’ll be paired with a dedicated funding manager who will assist throughout the loan process. This includes learning about your specific needs to identify the funding solution best suited for your circumstances and educating you about your financing options. If you get approved, funds can be used for nearly any business purpose, including things like vehicles, machinery, appliances, medical equipment, and office furniture.
To apply, visit the Lendio website. Doing so carries no costs and will not impact your credit score. Keep in mind, however, that if additional information is needed, you’ll be contacted by email or phone. It’s important that you watch for these communications, as your loan application will not be considered complete until you have provided all requested documents.
Smarter Finance USA: Best for Flexible Qualifications
| |
Rates & Terms | |
Estimated Starting APR | 10% to 20%+ |
Loan Amount | $10,000 to $1 million |
Repayment Term | 24 to 60 months |
Repayment Schedule | Weekly, monthly, seasonal, and deferred |
Funding Speed | 2 to 4 days from time of application |
Qualifications | |
Credit Score | None, but 600 is recommended |
Time in Business | None |
Annual Business Revenue | None |
Minimum Down Payment | 0% to 35%, plus a $399 documentation fee |
Why I Like Smarter Finance USA
Smarter Finance USA is my pick for business owners seeking flexible qualification requirements because it is the only company in this guide that has no minimum requirements for time in business, revenue, and credit score. The company is a broker with around 40 lenders in its network and operates with no minimum qualification requirements as it prefers evaluating each application on a case-by-case basis to maximize your approval odds.
With that being said, a representative I spoke with did mention that having a credit score below 600 can make it particularly challenging to get financing. Additionally, having compensating factors, such as a large down payment or significant financial reserves, can help offset weaknesses in your application.
Equipment financing is available for a wide range of business uses. Some examples include heavy equipment financing, such as for excavators, cranes, and backhoes. Financing for vehicles and trucks is also available. Smarter Finance USA can issue funding in nearly any industry, including those in healthcare and food service.
To apply, you can visit the Smarter Finance USA website. Applications can typically be completed in under 10 minutes, with funding to follow in two to four days.
National Funding: Best for Small Financing Amounts
| |
Rates & Terms | |
Estimated Starting APR | 15% and up (factor rates as low as 1.11×) |
Loan Amount | Up to $150,000 |
Repayment Term | 24 to 60 months |
Repayment Schedule | Monthly |
Funding Speed | As fast as 24 hours |
Qualifications | |
Credit Score | 600 |
Time in Business | 2 years |
Annual Business Revenue | $250,000 |
Minimum Down Payment | Varies |
Why I Like National Funding
While National Funding offers the lowest maximum loan amount on our list, the provider offers a high level of customer service and personalized service for its customers. For those reasons, I selected it as the best option for businesses with smaller funding needs.
It retains the majority of its loans in-house rather than brokering them out to other lenders. Applications are reviewed on a case-by-case basis, and you’ll work with a dedicated funding specialist who will match you with a loan based on your needs and qualifications. As part of the application, you’ll need to be prepared to provide an equipment quote from a vendor. Businesses with a long track record of performing well financially have the best chances of getting approved.
National Funding typically specializes in short-term financing. As such, it offers an early payment discount of up to 6% on the remaining balance when you pay off your equipment loan early. Before getting a loan, business owners must also agree to a personal guarantee, which is required for all its equipment loans regardless of your business qualifications or the strength of your loan application.
To learn more or to submit an application, visit the National Funding website.
Clarify Capital: Best for Low Credit Scores
| |
Rates & Terms | |
Estimated Starting APR | 6% |
Loan Amount | Up to $5 million |
Repayment Term | 2 to 6 years, but can vary |
Repayment Schedule | Monthly |
Funding Speed | 1 to 2 days |
Qualifications | |
Credit Score | 550-plus |
Time in Business | 6 months |
Annual Business Revenue | $120,000 |
Minimum Down Payment | 0% |
Why I Like Clarify Capital
Clarify Capital is my pick for companies seeking low credit score requirements. Whereas other lenders in our guide have no hard minimum credit score, like Smarter Finance USA, it still has a recommended minimum of 600. And while others listed here, like Lendio, have lower credit score requirements, it can be difficult to secure a more competitive rate compared with Clarify Capital.
With that being said, interested applicants should keep in mind that while rates can start as low as 6%, the company’s best terms are reserved for its most well-qualified applicants. Without excellent credit, you’re not likely to secure the lowest advertised rates. However, Clarify Capital is another broker on our list with over 75 lenders, something that can help you get approved for the best available rates and terms without needing to apply to lenders separately.
In addition to the qualification requirements listed above, you’ll need to have a business bank account so that your business income can be verified, as Clarify Capital will require at least three to four months of statements. If you don’t have a business bank account, you can check out our recommendations for the best business checking accounts.
Funds from a Clarify Capital equipment loan can be used for almost any business-related purpose. Loan proceeds can be used to purchase computers, furniture, construction equipment, farming equipment, vehicles, and much more.
To learn more or to apply, visit the Clarify Capital website.
SBG Funding: Best for High Approval Rates
| |
Rates & Terms | |
Estimated Starting APR | Varies, starting at 3.75% |
Loan Amount | Varies, up to 100% of equipment value |
Repayment Term | 1 to 7 years |
Repayment Schedule | Monthly |
Funding Speed | As fast as 48 hours from time of application |
Qualifications | |
Credit Score | 600 |
Time in Business | 6 months |
Annual Business Revenue | $350,000 |
Minimum Down Payment | 0% |
Why I Like SBG Funding
SBG Funding advertises an overall approval rate of 85% for its loan applications. As a result, business owners concerned about landing an approval can approach SBG Funding with a greater degree of confidence as long as the stated minimum requirements have been met.
Applicants should note, however, that meeting the stated eligibility criteria does not guarantee approval, as there could be additional requirements depending on your specific company’s circumstances and the details of the financing you’re seeking. As with most other lenders, I recommend being able to document compensating factors to offset any weaknesses in your loan application. This can include a large down payment, a large amount of financial reserves, or an upward trend of revenue.
If you decide to work with SBG Funding, you may find as an added benefit that the company may be able to provide custom payment terms to suit your cash flow needs. This can go beyond the typical adjustments of payment length and frequency, as you could even qualify for deferred payments for up to 90 days.
You can visit the SBG Funding website to apply, learn more, or contact a member of the team for any questions you may have. Online applications can be completed in just several minutes, and you can streamline this process by having the last four months of business bank statements ready to send. SBG Funding also does not perform a hard credit pull at any point during the approval process.
First Capital Business Finance: Best for Custom Loan Options
 | |
Rates & Terms | |
Estimated Starting APR | 19% to 35% |
Loan Amount | Up to $3 million |
Repayment Term | 12 to 60 months |
Repayment Schedule | Monthly |
Funding Speed | 24 to 48 hours |
Qualifications | |
Credit Score | None |
Time in Business | None, but 6 months is recommended |
Annual Business Revenue | $96,000 |
Minimum Down Payment | Varies |
Why I Like First Capital Business Finance
First Capital Business Finance is my pick for the best custom loan options. Working with this provider will also allow you to partner with the firm’s financial experts for personalized guidance and strategic insights to help your business and receive assistance throughout the loan process—including getting tailored solutions for your circumstances, transparent loan terms, and a quick approval and funding process.
This lender has the ability to issue equipment financing to business owners with bad credit as it places a larger emphasis on a company’s income, industry type, and time in business. It offers financing for all types of business equipment, with a minimum auction value of $20,000, including commercial trucks, vehicles, construction, office, and heavy manufacturing equipment.
A unique aspect of this provider is the fact that it can issue financing to brand-new businesses with no minimum credit score or time in business. After Lendio, it offers one of the lowest annual revenue requirements of this guide. We do, however, recommend that you have a history of at least six months to boost your approval odds.
To apply, visit the First Capital Business Finance website.
Balboa Capital: Best for Fast Funding Speeds
| |
Rates & Terms | |
Estimated Starting APR | 5% to 20% |
Loan Amount | Up to $500,000 |
Repayment Term | 24 to 60 months, but may vary |
Repayment Schedule | Monthly |
Funding Speed | As fast as same day |
Qualifications | |
Credit Score | 620+ |
Time in Business | 1 year |
Annual Business Revenue | $100,000 |
Minimum Down Payment | None |
Why I Like Balboa Capital
Balboa Capital can offer some of the fastest approval and funding speeds out of all the lenders in our guide. From start to finish, it’s possible to get funding on the same day that you apply—whereas you might have to wait until the next business day with providers like Lendio and National Funding.
Depending on when you submit an application, one-hour approvals are available during regular business hours. The downside, however, is that Balboa Capital does have the highest minimum credit score requirement on our list.
This provider can do this because it offers a streamlined application-only process under certain circumstances. Applications for hard collateral under $500,000 and for soft collateral for up to $350,000 are eligible for this reduced documentation process.
Submitting an initial application to this provider will not affect your score, as Balboa Capital conducts a soft credit pull to determine if you might qualify. If you don’t, no additional credit pulls will be done. To apply, you can visit the Balboa Capital website and complete a form with your business information and the details of the financing you need.
How I Chose the Best Equipment Loans for Bad Credit
The following items were considered in my selection of the best equipment loans for bad credit:
- Minimum credit score requirement
- Other qualification requirements, such as revenue and time in business
- Interest rates and estimated APRs
- Loan amount and repayment terms offered
- Application, approval, and funding speeds
- Ease of application
- Documentation requirements
- Down payment requirements
- Customer reviews and ratings
Check out our guide on how to get a small business loan for tips on not only improving your chances of getting approved but also how to get the best possible rate.
How to Choose an Equipment Loan Lender
When choosing a lender for an equipment loan, ensure you work with one that fits your budget and business needs. Keep the following factors in mind when shopping around.
- Determine your business needs: Depending on your business needs, ensure equipment financing is your best option before proceeding with an application. Consider what kind of equipment you may need to fulfill business operations, how you plan to repay the loan, and if it fits your budget.
- Consider lender qualification requirements: Qualification criteria will vary per lender and will often include factors such as credit score, time in business, and annual income of your business. See to it that you meet the minimum eligibility requirements for a better chance of approval.
- Compare loan costs and terms: You’ll need to ensure the financing you seek is within your budget. You should review loan terms and associated costs when shopping around for a lender, inclusive of a down payment and the monthly repayment amount.
Alternatives to Bad Credit Equipment Loans
Equipment loans are specific to the acquisition of equipment for business purposes. They may come with higher interest rates than other business loans, so if you’re looking to explore all of your financing options, be sure to consider the following alternatives:
- Equipment leasing: An equipment lease allows you to rent business equipment for a limited period of time. Once the lease expires, you must return the equipment. You can read our guide on equipment financing to determine whether a loan or lease is better suited for your business.
- Small business line of credit: A small business line of credit acts as a revolving credit facility, in which you can request a draw, have the funds deposited to your account of choice, and repay the balance over time. You can use it on an as-needed basis, with limited restrictions as long as the funds are used for business purposes. Check out our list of the leading small business lines of credit.
- Rollover for business startups (ROBS): A ROBS gives you access to your personal retirement accounts without having to pay taxes or early withdrawal penalties. You can avoid monthly payments and interest charges that you’d otherwise be paying on a loan. We recommend using a company from our list of the best ROBS providers to walk you through this process.
- Invoice factoring: Invoice factoring provides financing opportunities for businesses that allow them to sell their invoices to sustain cash flow. This can be a good option if you are awaiting payment from customers but need funds more quickly to use for other areas of your business. To start, see our top-recommended invoice factoring companies.
- Home equity line of credit (HELOC): Similar to a business line of credit, a HELOC is a revolving credit facility based on the value of your home. You can use it with limited restrictions and on an as-needed basis. For more information, check out our guide on using a HELOC to fund your business.
Frequently Asked Questions (FAQs)
Yes, you can qualify for financing with bad credit if you can show other strengths in your loan application. You can do this by agreeing to a large down payment or setting aside cash to be used as a security deposit. However, the rate you can get will depend on several other items, such as your time in business, the type of equipment being financed, and business revenue.
Equipment financing can have restricted uses and may be subject to higher rates and fees than other types of business loans. However, they can be useful if you need to acquire a piece of equipment that will benefit your business operations on a daily basis.
Yes, equipment financing is considered debt. Since you’re borrowing money from a lender to finance the acquisition or repairs of a piece of equipment, you’re obligated to repay the lender over time, typically with a monthly principal and interest payment.
Bottom Line
The best equipment financing for bad credit should offer low credit score requirements, competitive rates and terms, and good customer service. With the right lender, obtaining an equipment loan for borrowers with bad credit is possible, and our guide can provide you with various lending options to support your business financing needs.
