The best equipment loans for a startup business provide financing opportunities to early-stage companies with less than two years in business. These loans should be provided by a lender that has low revenue requirements and favorable rates and terms, suitable for early businesses with limited resources. The best equipment loans for startup businesses should also have a combination of good customer service, competitive rates, flexible loan terms, and low credit score requirements.
Here are our picks for the best equipment loans for startups:
- Smarter Finance USA: Best overall for flexible requirements, rates, and customer service
- Creditfy: Best for long-term equipment financing options
- SBG Funding: Best for high approval rates and custom repayment terms
- Lendio: Best for multiple loan options
- eLease: Best for newer businesses seeking smaller financing amounts
- 1West: Best for simple equipment financing needs
- National Funding: Best for small funding needs and low lease payments
- Balboa Capital: Best for fast approval and funding speeds
Best Equipment Loans for Startup Businesses at a Glance
Maximum Loan Amount | Estimated Starting APR | Maximum Loan Term | Minimum Credit Score | Annual Revenue Required | Time in Business Required | |
|---|---|---|---|---|---|---|
 | $1 million | 6% | 5 years | None | None | None |
 | $5 million | 1.06% | 7 years | None | Not stated | None |
| $5 million | 3.75% average monthly rate | 7 years | 600 | $350,000 | 6 months |
 | $5 million | 7.5% | 10 years | 520 | $50,000 | 0 to 12 months |
 | $500,000 | 8% | 5 years | 500 | None | None |
 | $5 million | 7% | 5 years | 550 | $120,000 | 12 months |
 | $150,000 | 15% | 5 years | 600 | $250,000 | 6 months |
 | $500,000 | 8% | 5 years | 620 | $100,000 | 12 months |
To boost your approval odds, see our tips in our guide on how to get a small business loan. There, you’ll find information on what lenders look for at each stage of the loan process and how best to present yourself to get the best rates available.
Smarter Finance USA: Best Overall for Flexible Requirements, Rates, and Customer Service
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Rates & Terms | |
Estimated Starting APR | 6% to 20%+ |
Loan Amount | $10,000 to $1 million |
Repayment Term | 2 to 5 years |
Repayment Schedule | Weekly, monthly, seasonal, and deferred |
Funding Speed | 2 to 4 days |
Qualifications | |
Credit Score | None but 600 is recommended |
Time in Business | None |
Annual Revenue | None |
Down Payment | 0% to 35% |
Why We Like Smarter Finance USA
Smarter Finance USA is our best overall pick due to having some of the most flexible qualification requirements in our guide. It’s a good option for startups since it reviews each application on a case-by-case basis, which can improve the approval odds of a newer business with limited resources. It also has a network of nearly 40 lenders, giving you the possibility of being able to choose from multiple financing options.
It specializes in equipment loans, and deals heavily with vehicle financing. This includes trucks and heavy equipment such as excavators, cranes, backhoes, and bulldozers. It offers equipment financing for a wide variety of industries, including healthcare practices, food service, construction, and more.
One item to note is that while there is no minimum credit score requirement, you may find it particularly difficult to get approved with a score below 600. Down payment requirements can also vary depending on the strength of your business finances.
To learn more or to apply, visit the Smarter Finance USA website.
Creditfy: Best for Long-term Equipment Financing Options
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Rates & Terms | |
Estimated Starting APR | Monthly rates starting at 1.06% |
Loan Amount | Up to $5 million |
Repayment Term | 3 to 7 years |
Repayment Schedule | Monthly |
Funding Speed | As fast as 24 hours |
Qualifications | |
Credit Score | None |
Time in Business | None |
Annual Revenue | Not stated |
Down Payment | As low as 0% |
Why We Like Creditfy
Creditfy can be a good option for startups looking for long-term equipment financing options, as it offers one of the longest repayment terms in this guide. While Lendio may offer longer repayment terms in some circumstances, Creditfy can offer lower starting rates along with more flexible qualification requirements. This makes it a suitable choice for startups with limited resources or credit history.
It can offer both customized financing and leasing options on new and used equipment, and requires no down payment. Soft costs and service fees can be financed and may include things like delivery expenses, installation, maintenance, warranty, taxes, and other costs. Eligible industries include:
- Automotive
- Agriculture
- Construction
- Energy
- Fitness
- Hospitality
- Industrial
- Manufacturing
- Media
- Medical
- Technology
- Transportation and waste management
Creditfy is highly rated and has a loan approval rate of 90%. It has exclusive partnerships with some lenders and also requires its lending representatives to have a minimum of two years of industry experience to best match you with a suitable lender.
To learn more, you can visit Creditfy’s website to review their loan offerings or submit an application.
SBG Funding: Best for Custom Repayment Terms
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Rates & Terms | |
Estimated Starting APR | 3.75% average monthly rate |
Loan Amount | Up to $5 million |
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 Revenue | $350,000 |
Down Payment | Not stated |
Why We Like SBG Funding
SBG Funding can be a good option for businesses seeking custom repayment terms, which can include terms such as deferred payments for up to three months on certain loans. Loan rates and terms are competitive, and are not subject to a prepayment penalty.
Notably, it has one of the higher revenue requirements listed in our guide. Borrowers should note that while SBG Funding boasts an approval rate of 85%, you’ll still need to have a strong loan application overall. For example, while the minimum credit score requirement is 600, businesses barely meeting that criteria should have strong revenue to offset it.
SBG Funding does not perform a hard credit pull at any point in the approval process, so you can submit an application to see what your options are without any negative impact on your credit score. Be prepared to supply an invoice for the piece of equipment you plan to purchase, and recent bank statements to supplement your application. Applications can be submitted from the SBG Funding website and is a quick process that can be completed in under 10 minutes.
Lendio: Best for Multiple Loan Options
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Rates & Terms | |
Estimated Starting APR | 7.5% |
Loan Amount | $5,000 to $5 million |
Repayment Term | 1 to 10 years |
Repayment Schedule | Monthly |
Funding Speed | As fast as 24 hours |
Qualifications | |
Credit Score | 520 |
Time in Business | 0 to 12 months |
Annual Revenue | $50,000 |
Down Payment | As low as 0% |
Why We Like Lendio
Lendio is a broker that has a network of over 75 lenders. That’s one of the largest on our list when compared to Smarter Finance USA and 1West, and why we chose it as an excellent choice if you’re looking for multiple financing options. With a single loan application, you can be connected with a variety of lenders to provide for your business needs, saving you both time and money.
The company offers equipment financing for nearly any business purpose. Examples of allowable uses include vehicles, machinery, restaurant appliances, office furniture, and medical equipment.
When you work with Lendio, you’ll be paired with a lending specialist who will learn about your business needs, goals, and qualifications to best match you with a lender within its network. You’ll then be presented with options to choose from.
You can apply online from the Lendio website, where the application process can be completed in under 15 minutes. If necessary, you may be notified via email or phone of any additional requirements. If you are asked for additional items, provide them in a timely manner as your application won’t be considered complete until this is done.
eLease: Best for Newer Businesses Seeking Smaller Financing Amounts
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Rates & Terms | |
Estimated Starting APR | 8% and up |
Loan Amount | $3,000 to $500,000 |
Repayment Term | Up to 5 years |
Repayment Schedule | Monthly |
Funding Speed | Typically as fast as 48 hours from time of application |
Qualifications | |
Credit Score | 500 but can vary |
Time in Business | None |
Annual Revenue | None |
Down Payment | 10% is recommended |
Why We Like eLease
eLease has one of the smallest funding amounts available next to National Funding, but still made our roundup because of its competitive rates and flexible qualification requirements. With no minimum time in business required, this can be a good option for a newer company that doesn’t need a large amount of financing.
It can offer funding for a wide range of business industries. You can find a full list on its website, but some examples include:
- Agricultural equipment
- Brewery equipment
- Computer equipment
- Construction equipment
- Dry cleaning equipment
- Fitness equipment
- Medical equipment
- Machinery
- Network equipment
- Restaurant equipment
eLease does not publicly disclose its qualification requirements as they can vary on a case-by-case basis. Specific eligibility criteria will depend on your specific company’s credit, business finances, and down payment amounts. In many cases, a personal guarantee will also be required. However, this shouldn’t discourage startups from applying, it just means that you’ll need to be prepared to furnish proper documentation.
To apply, learn more, or contact the company, visit the eLease website. There, you’ll find the company’s phone number and online link to submit an application in under five minutes.
1West: Best for a Simple Application Process
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Rates & Terms | |
Estimated Starting APR | 7% |
Loan Amount | $10,000 to $5 million |
Repayment Term | 5 to 60 months |
Repayment Schedule | Monthly |
Funding Speed | 1 week |
Qualifications | |
Credit Score | 550 |
Time in Business | 12 months |
Annual Revenue | $120,000 |
Down Payment | Varies |
Why We Like 1West
1West offers financing on nearly any type of used or new business equipment. It’s a broker similar to Lendio that has a network of approximately 50 lenders. It makes our list as the best option for a simple application process due to its unique feature known as Automated Business Lending Engine (ABLE), which can provide financing options at any time of day, without the need to speak with a loan officer.
With that being said, you do still have the option of working with a loan specialist if you need additional assistance.
One downside with 1West is that its funding speed of one week is longer than many of the other providers on our list. For complex scenarios, that funding speed may be even longer. You can check the status of your application through 1West’s online portal, although it can take up to two business days for updates to occur.
You can submit an online application from the 1West website. To expedite the process, you can prepare commonly requested documents, which include the following:
- Three months of business bank statements
- Government-issued identification
- Voided check for your business bank account
National Funding: Best for Small Funding Needs & Low Lease Payments
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Rates & Terms | |
Estimated Starting APR | 15% (factor rate of 1.10× and up) |
Loan Amount | Up to $150,000 |
Repayment Term | 2 to 5 years |
Repayment Schedule | Monthly |
Funding Speed | As fast as 24 hours |
Qualifications | |
Credit Score | 600-plus |
Time in Business | 6 months |
Annual Revenue | $250,000 |
Down Payment | Not stated |
Why We Like National Funding
National Funding offers an equipment financing program that has the smallest maximum loan amount in our guide. Like Balboa Capital, however, working with National Funding means you’ll get excellent service and quick turnaround times. Borrowers can also qualify for an early payment discount if paying off the loan early. For these reasons, it’s a good choice if your funding needs are small or you need a low monthly lease payment.
With National Funding, you can get new and pre-owned equipment loans and leases with no collateral or down payment required. A unique aspect of this provider is that it also offers a program called the Lowest Payment Guarantee, which works by stating that you’ll get the lowest lease payment possible. If you get a lower payment with another lender, National Funding will pay you $1,000.
The provider allows you to work with a dedicated funding specialist to determine financing options best suited for your business needs. To learn more or submit an application, visit the National Funding website.
Balboa Capital: Best for Fast Approval and Funding Speeds
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Rates & Terms | |
Estimated Starting APR | 8% to 20%+ |
Loan Amount | Up to $500,000 |
Repayment Term | 24 to 60 months |
Repayment Schedule | Monthly |
Funding Speed | As fast as the same day |
Qualifications | |
Credit Score | 620 |
Time in Business | 12 months |
Annual Revenue | $100,000 |
Down Payment | None |
Why We Like Balboa Capital
Balboa Capital makes our list since it can offer some of the fastest approval and funding speeds in comparison to other providers in this guide. Applications submitted during regular business hours can receive approvals in as little as one hour, along with same-day funding.
The lender has the ability to issue fast approvals and fundings largely because it allows for an application-only process for certain loans. This process has significantly fewer documentation requirements. Loans for hard collateral can get this streamlined process for up to $500,000, while soft collateral can get it for up to $350,000.
Qualification requirements are stricter than most on this list, however, a variety of factors are taken into consideration for approval. Additionally, this lender’s lowest rates will often require a business to exceed the minimum eligibility criteria. To begin the process, you can get a free, no-obligation quote by completing a form on the provider’s website.
How We Chose the Best Equipment Loans for Startups
The best equipment loans for startup businesses were selected based on the following criteria:
- Interest rates, fees, and estimated APRs
- Qualification requirements
- Minimum down payment
- Loan amount
- Loan terms
- Ease of application
- Application, approval, and funding speeds
- Documentation requirements
- Customer reviews and ratings
How to Choose An Equipment Loan Provider
The best equipment loan for your startup is one that you’re qualified for and will help you achieve your business goals. Keep the following in mind when choosing a loan provider.
- Determine your business needs: Before proceeding with any form of financing, you’ll want to consider how funds from the loan will be used, how you plan to repay the loan, and if your financing options fit your budget. If you need to purchase equipment to fulfill business operations, factor in the total cost of the equipment, how quickly you can pay it off, and if you can afford a down payment.
- Consider lender qualification requirements: Qualification criteria will vary per lender, so you’ll want to shop around and make sure you meet the necessary requirements to potentially qualify for a loan. The weight of criteria can fluctuate depending on factors such as credit score, time in business, and annual revenue.
- Review loan costs and terms: Make sure to factor in the costs associated with getting a loan, including rates, fees, and a down payment. You’ll also want to review the loan terms, such as the repayment term and monthly payment amount.
Alternatives to Equipment Loans
Depending on your budget and business needs, getting an equipment loan may come with higher rates and fees. If you need another financing solution, or are simply want to explore all of your options, you can consider the following alternatives:
- Equipment lease: This allows you to rent and use equipment for the term of the lease, without assuming ownership responsibilities. Once it expires, you must return the equipment to the vendor, although some leases provide you with the option to purchase it. Read our guide on types of equipment financing to learn more about the differences between a loan and a lease.
- Small business line of credit: This can be a good option if you’re having trouble getting approved or do not have the down payment for an equipment loan. Since you can draw funds on an as-needed basis, it can also be used to cover unexpected expenses. See our roundup of the best small business lines of credit.
- SBA loan: For businesses with good credit and strong finances, SBA loans offer favorable low rates due to their government-backed nature. Check out our list of the top-recommended SBA lenders to learn more.
- Rollover for business startups (ROBS): A ROBS allows you to access your retirement account tax- and penalty-free. It’s not a loan, so you won’t have monthly payments or interest expenses. You’ll typically need a minimum investment of $50,000, and we recommend choosing a company from our list of the leading ROBS providers to walk you through the process.
Frequently Asked Questions (FAQs)
In comparison to other forms of business loans, equipment loans can have more flexible qualifications and can be easier to get than other types of financing. However, lenders will have varying qualification criteria and may have more documentation requirements depending on the terms of the loan.
Interest rates for equipment loans typically range anywhere from 6% to 25%. It really depends on the terms of the loan set by the borrower, the assets you’re financing, and your creditworthiness as a borrower.
With an equipment loan, you are purchasing the equipment and get to retain ownership and possession of it once the loan is paid off. With a lease, you are temporarily renting the equipment and must return it once the lease expires. Repair and maintenance responsibilities fall to the owner, and you don’t assume ownership at the end of the lease term. However, some leases do provide you with the option to purchase the equipment. To learn more about the differences between equipment loans and leases, check out our article on equipment financing.
Bottom Line
Equipment loans for startups should offer financing options that are available to early businesses with limited resources, time in business, and credit history. We’ve put together our recommendations for lenders that can provide equipment loans with competitive rates and terms so that you can determine which provider may be suitable for your business needs.
