7 Best Companies for Equipment Financing With Bad Credit for 2023
This article is part of a larger series on Business Financing.
The best companies for equipment financing with bad credit will have low or no requirements for a credit score. They should also provide flexible loan terms and financing for a wide range of equipment, from heavy machinery to furniture. Note that when applying for equipment financing with bad credit, expect to receive higher interest rates. However, you can qualify for competitive rates depending on your down payment, business revenue, time in business, and type of equipment being financed.
Here are the seven best companies for equipment financing with bad credit:
- Smarter Finance USA: Best overall for businesses with bad credit
- eLease: Best for startups
- National Business Capital: Best for businesses with low credit scores
- Balboa Capital: Best for quick financing
- SBG Funding: Best for long-term financing
- National Funding: Best for smaller financing needs
- First Capital Business Finance: Best for large financing needs
Best Companies for Equipment Financing With Bad Credit at a Glance
Provider |
|
|
|
|
|
|
---|---|---|---|---|---|---|
|
$1 million |
7% to 20% |
60 months |
5 minutes |
None |
None |
Visit Smarter Finance USA | ||||||
|
$500,000 |
8% and up |
60 months |
5 minutes |
500 |
Varies |
Visit eLease | ||||||
|
$5 million |
10% to 60% |
60 months |
5 minutes |
None* |
$120,000* |
Visit National Business Capital | ||||||
|
$500,000 |
5% to 20%+ |
60 months |
2 minutes |
620 |
$100,000 |
Visit Balboa Capital | ||||||
|
$5 million |
3.75% and up |
120 months |
5 minutes |
500 |
$120,000 |
Visit SBG Funding | ||||||
|
$150,000 |
4.99% and up |
60 months |
2 minutes |
575 |
$250,000 |
Visit National Funding | ||||||
|
$5 million |
19% to 35% |
72 months |
2 minutes |
None |
None |
Visit First Capital Business Finance |
*No minimum credit score requirement with six months of business history and at least $120,000 in annual revenue. Business revenue requirement is waived with a credit score of 650-plus.
Smarter Finance USA: Best Overall for Businesses With Bad Credit
Why We Like Smarter Finance USA
We chose Smarter Finance USA as our best overall company for equipment financing with bad credit. Unlike some other companies on our list, it has no hard credit score, time in business, and revenue requirements. Applications are reviewed on a case-by-case basis, and your odds of getting approved will depend on your specific business needs and finances’ strength.
Smarter Finance USA can seek financing options from its network of nearly 40 lenders. With so many, you could see a wide range of rates, but they’ll generally run from 7% to 20%. With bad credit, be aware that you may not qualify for the lowest rates advertised.
Equipment financing is available for several different industries and equipment, including truck financing and heavy equipment, such as cranes, backhoes, and bulldozers. Loan amounts start at $10,000 and go up to $1 million and can be financed for up to 60 months.
You can submit an application online through the Smarter Finance USA website or by calling the company’s toll-free number.
eLease: Best for Startups
Why We Like eLease
With no minimum time in business requirement, eLease is our best company for startups. It also has a low credit score requirement of 500, with no hard requirements for how much revenue your company must generate.
Applications are reviewed on a case-by-case basis, which improves your chances of getting approved. It also means you could see a wide range of rates and down payment requirements. Rates for well-qualified businesses can start at around 8%. With bad credit, rates generally are around 15% or higher. You may also need to have a down payment of 10% or more, depending on the other aspects of your business, such as revenue earned, time in business, and credit score.
eLease offers leasing on equipment used in agriculture, construction, dry cleaning, restaurants, woodworking, and more. If you’re interested in applying, you can complete its online application or call its toll-free number with any questions you have. Visit eLease’s website to apply.
National Business Capital: Best for Businesses With Low Credit Scores
Why We Like National Business Capital
National Business Capital is another great choice for equipment financing and is rated as our best lender for businesses with low credit scores. With no minimum credit score needed, you can qualify for equipment financing as long as you have been in business at least six months and have $120,000 in annual gross sales. If you have a credit score of 650 or higher, the requirements for gross sales and time in business are waived.
Depending on your specific business and loan requested, rates with National Business Capital can be high, generally ranging from 10% to 60%. Although it’s possible to qualify for a loan with no down payment, you might get a better interest rate with a bigger down payment. Loan terms range from one to five years, with loans funding in as little as three days.
In addition to equipment financing, National Business Capital offers other types of loans that you might find useful. These include a business line of credit, Small Business Administration (SBA) loans, and small business loans.
Submitting an application takes just several minutes, and the company will connect you with its marketplace of more than 75 lenders. Visit National Business Capital’s website to apply or get more information.
Balboa Capital: Best for Quick Financing
Why We Like Balboa Capital
If you need funds quickly, Balboa Capital is a good option and can likely get you the funds you need quicker than the other companies in this guide. It has a short application process, can issue same-day approvals, and can fund loans in as soon as 24 hours. To qualify, you’ll need a minimum credit score of 620, at least one year in business, and annual revenue of $100,000.
Although you can qualify for financing with no down payment, you may need to place a security deposit, typically calculated as two months of payments. Balboa Capital offers financing up to $500,000 with terms of up to 60 months. Interest rates tend to range from 5% to 20%, although businesses with bad credit aren’t likely to qualify for the lowest rates available.
Submitting a loan application won’t hurt your credit score. That’s because Balboa Capital conducts a soft credit pull only and will let you know if that is insufficient. Even if you don’t qualify, your credit score won’t have been impacted, and you’ll have only lost the time spent applying for the loan.
You can start the application process on the company’s website or by calling the toll-free number. Visit Balboa Capital’s website for more information.
SBG Funding: Best for Long-Term Financing
Why We Like SBG Funding
Few companies offer terms up to 10 years, making SBG Funding our pick as the best company for long-term equipment financing. You will need a minimum credit score of 500, with six months of running your business and at least $10,000 in monthly revenue.
Paperwork requirements to qualify for a loan are minimal. Other than a copy of your driver’s license and a voided check for your bank account, you should typically only need to provide three months of bank statements and at least one invoice for the equipment being purchased.
Although the company advertises rates starting at 3.75%, you may not qualify for its best rates with bad credit. Loan amounts up to $5 million are available.
If equipment financing isn’t right for you, SBG Funding has other types of financing available. Your options include SBA loans, invoice financing, bridge capital, small business term loans, and business lines of credit.
You can receive a decision as quickly as 24 hours after applying. To apply, visit SBG Funding’s website.
National Funding: Best for Smaller Financing Needs
Why We Like National Funding
National Funding only offers financing up to $150,000, making it the best lender for smaller financing needs. To be eligible, you’ll need to have a credit score of at least 575, with two years in business and $250,000 in annual revenue.
Down payment amounts can vary based on your specific needs and business finances, although the company does provide options for 100% financing. Its rates start at 4.99%, but with bad credit, you may not qualify for the best rates. Equipment can be financed for as long as five years.
In addition to offering equipment loans, National Funding has options for equipment leasing, short-term business loans, working capital loans, and small business loans.
You can begin the process by submitting an application on National Funding’s website or calling the toll-free number. Once you speak with one of the company’s funding specialists, you can expect to receive a decision on the loan in as soon as 24 hours. Visit the website for more information on how to apply.
First Capital Business Finance: Best for Large Financing Needs
Why We Like First Capital Business Finance
With equipment financing up to $5 million, First Capital Business Finance is our pick as the best company for large financing needs. While other companies offer high financing amounts, First Capital also has no set minimums for credit score, business revenue, or time in business. With bad credit, you may be required to have at least a 10% down payment.
Loan amounts from $5,000 to $5 million are available, and you can select a payment term as long as six years. First Capital Business Finance offers financing for a wide range of equipment, including trucks, carpet cleaning equipment, commercial generators, and landscaping. It also has invoice factoring and working capital loans.
Borrowers with bad credit can expect rates anywhere from 19% to 35%. The rate you qualify for will depend on several items, such as your down payment amount, time in business, and business revenue.
If you apply early enough in the day, it’s possible to get a same-day approval on your loan. To apply, visit First Capital Business Finance’s website or call the company’s toll-free number.
How We Evaluated the Best Companies for Equipment Financing With Bad Credit
In determining the best companies for equipment financing with bad credit, we considered the following criteria:
- Transparency of rates and fees on the company’s website
- Quality and quantity of educational content provided
- Minimum credit score, time in business, and revenue requirements
- Interest rates and estimated APRs
- Maximum loan amounts offered
- Loan terms and length of repayment
- Speed of loan approval and funding
- Customer reviews
Alternatives To Equipment Financing
If you can’t get approved for equipment financing or want to find a more affordable type of financing, here are some alternatives to consider:
- Invoice factoring: Best for businesses awaiting payment from customers but needing cash quickly. FundThrough can help you with this type of financing and is rated as our best accounts receivable financing company because of its fast funding times and high advance rates.
- Merchant cash advance (MCA): Good for businesses that cannot qualify for any other type of financing but have a high volume of credit card receipts. As an online marketplace with more than 75 lenders in its network, Lendio can help with this and many other types of financing.
- Rollover for business startups (ROBS): Best for business owners who cannot qualify for other types of financing but have at least $50,000 in retirement accounts. As one of our best overall ROBS providers, Guidant Financial can walk you through the process while remaining fully compliant with IRS requirements.
Frequently Asked Questions (FAQs)
Can I get equipment financing with bad credit?
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, showing that your business is profitable, or setting aside cash to be used as a security deposit. Financing equipment that holds its value very well can also improve the terms of a loan approval.
Where can I get equipment financing with bad credit?
You can get equipment financing with bad credit from banks and online lenders. Companies that review applications on a case-by-case basis and have a large marketplace of lenders are best for improving your chances of being approved.
What rates will I qualify for?
With bad credit, you can expect to receive rates at 15% or higher. However, the rate you can get will depend on several other items, such as your time in business, type of equipment being financed, down payment amount, and business revenue. With so many variables, shop multiple lenders to ensure you’re getting a competitive rate.
Bottom Line
Many companies specialize in providing business owners with bad credit with equipment financing. These loans will come with higher interest rates and fees, but you can keep costs down if you can show you have a strong business.
Having documentation that proves your business has an excellent track record of being profitable—or is willing to place a large down payment—will improve your chances of being approved at a competitive rate. Some lenders review loans on a case-by-case basis, so it’s important to shop multiple lenders to get the best rate possible.