Equipment financing
Equipment Financing: Fund the Equipment, Let the Equipment Secure It
Equipment financing pays for a specific asset, new or used, from a $10,000 compressor to a $2 million production line, with the equipment itself as collateral. Terms run 2 to 7 years, rates from about 6% for strong credit, approvals down to 600 credit, and funding in 48 to 72 hours. RAN Funding compares bank, captive and independent equipment lenders in one application and tells you whether a loan, a lease or a line fits the purchase.
How Does Equipment Financing Work?
An equipment loan or lease funds a specific purchase (vehicle, machine, medical device, kitchen line, software-and-hardware bundle) and the lender takes a lien on that asset. Because the collateral is built in, approvals lean on the equipment and the business rather than on personal credit alone: 600+ credit opens most programs, 0% to 20% down is typical, terms run 24 to 84 months matched to the asset’s useful life, and rates in October 2026 run roughly 6% to 10% for 720+ credit on hard assets up to 20%+ for weaker files. The lender usually pays the vendor directly and funds in 48 to 72 hours once the invoice is in hand. RAN Funding is a broker; the funding partner sets the approved amount, down payment, rate, fees, term and funding date.
The Asset You Are Buying Is the Security
Equipment lenders underwrite the thing you are buying as much as the business buying it. A titled truck, a CNC machine or a dental chair holds resale value, so the lender’s risk is lower and the pricing and approval odds are better than on an unsecured loan of the same size. New and used both qualify; most lenders accept used equipment up to 10 to 15 years old from a dealer or, with an inspection, a private seller.
We place equipment financing with banks, manufacturer captives and independent equipment lenders, which means we can show you the cheapest offer your file supports, the fastest one, and whether a lease or a Section 179-driven year-end purchase changes the math. Most applicants have offers within one business day.
What to Have Ready Before You Apply
Documents required
- Vendor quote or invoice for the equipment
- Last 3 months of business bank statements (4 in some states)
- Driver’s license and voided business check
- Business tax return and year-to-date financials for amounts over $150,000 to $250,000
- Equipment details for used purchases: year, make, model, hours or miles, photos
Typical partner screening criteria
- Personal credit of 600+; 680+ for the best tiers
- 12+ months in business (6+ in some cases) for application-only programs; 2+ years for the lowest rates
- Revenue that covers the payment comfortably, usually $20,000+ a month
- Equipment from a dealer or verifiable private seller; titled or serialized assets preferred
- No open bankruptcies; no recent equipment repossessions
Ready to See Your Options?
No obligation and a soft inquiry to check. A funding specialist comes back with the offers you qualify for.
The Complete Guide to Equipment Financing in 2026
How an Equipment Loan or Lease Works
You send the vendor quote, the lender approves an amount against it, you sign, the lender pays the vendor, and you take delivery. Payments start 30 days later on a fixed schedule, and at the end of a loan the lien is released. On a lease, the lender owns the asset and you have a purchase option at the end: $1 on a capital lease, fair market value on an operating lease.
Equipment financing timeline
Application-only up to about $250,000 for strong files. Larger or used-equipment deals add a financial review and sometimes an inspection.
Our guide to how equipment financing works covers the mechanics step by step, and equipment loan vs lease explains when each structure wins.
Equipment Financing Rates in 2026
With Prime at 7.00%, equipment rates across our lender network break down by credit tier, and then shift by equipment type and lender.
| Credit tier | Typical APR | Typical down payment | Typical term |
|---|---|---|---|
| Excellent (720+) | 6–10% | 0–10% | 36–84 months |
| Good (680–719) | 8–14% | 0–15% | 36–72 months |
| Fair (640–679) | 12–20% | 10–20% | 24–60 months |
| Challenged (600–639) | 18–28% | 15–25% | 24–48 months |
| Under 600 | 25%+ or asset-based pricing | 20%+ | 24–36 months |
Trucks, construction equipment and medical devices price at the bottom of each range because they hold resale value; restaurant equipment, software-heavy systems and specialized machinery price higher. Bank and captive lenders are cheapest and slowest; independent lenders fund in days at a few points more. Full breakdown by equipment type and lender in equipment financing rates.
Typical equipment financing APR by credit tier, October 2026
Ranges across the RAN Funding lender network with Prime at 7.00%. Titled and hard assets price at the low end of each range.
What Equipment Financing Costs: A Worked Example
| $100,000 at 8% over 60 months | $100,000 at 14% over 60 months | $100,000 at 20% over 48 months | |
|---|---|---|---|
| Monthly payment | $2,028 | $2,327 | $3,043 |
| Total repaid | $121,658 | $139,611 | $146,071 |
| Total cost | $21,658 | $39,611 | $46,071 |
| Section 179 first-year deduction (2026) | $100,000 | $100,000 | $100,000 |
With 100% bonus depreciation and a $2,560,000 Section 179 cap in 2026, the full purchase price is deductible in the year the equipment is placed in service, whether you finance it or pay cash. At a 30% combined tax rate, that is $30,000 back on a $100,000 purchase, which more than covers the first year of interest at any tier above. Details and the December 31 deadline in Section 179 and year-end equipment purchases.
Loan vs Lease vs Line of Credit
| Equipment loan | Capital lease ($1 buyout) | Operating lease (FMV) | Line of credit | |
|---|---|---|---|---|
| Who owns it | You, with a lien | You at the end, for $1 | Lender; you can buy at market value | You |
| Down payment | 0–20% | Usually first payment only | First and last payment | None; draw the amount |
| Payment | Fixed | Fixed, often slightly lower | Lowest | Variable, on balance |
| Tax treatment | Section 179 and depreciation | Section 179 and depreciation | Payments expensed | Interest only |
| Best for | Long-life assets you will keep | Same, with less cash up front | Tech that goes obsolete; short-term projects | Small purchases, repairs, flexible needs |
| Prepayment | Often penalty-free | Varies | Not applicable | Free |
For most owners buying a truck, machine or practice equipment they will run for years, a loan or $1-buyout lease is the right structure and the choice comes down to cash up front. Detail in equipment loan vs lease.
Equipment Financing Requirements
Equipment lenders ask less than SBA or bank lenders because the asset carries the risk. What they do check:
- Credit: 600+ for most programs, 680+ for the best rates. See equipment financing with bad credit for the options under 640.
- Time in business: 6 months for application-only deals.
- Cash flow: three months of bank statements showing the payment fits; tax returns above about $250,000.
- The equipment: a quote from a dealer or verifiable seller; used equipment within age limits (typically 10–15 years) and, above $100,000, an inspection or appraisal.
- Down payment: 0% for strong files on new hard assets, 10–20% for used equipment, start-ups or weaker credit.
- Guarantee: a personal guarantee from owners of 20% or more, as with every business loan.
Full checklist in equipment financing requirements, and the realistic timeline in how fast is equipment financing.
Equipment Financing by Industry
Lenders specialize, and the best pricing comes from matching the asset to a lender that knows it.
| Industry | Typical equipment | Typical terms | Guide |
|---|---|---|---|
| Trucking | Semi-trucks, trailers, reefers | 36–72 months; 10% down | Semi-truck financing |
| Construction | Excavators, skid steers, lifts, dump trucks | 36–84 months | Construction equipment |
| Manufacturing | CNC, presses, robotics, packaging lines | 60–84 months | Manufacturing equipment |
| Medical and dental | Imaging, chairs, lasers, sterilization | 60–84 months; 0% down common | Medical and dental equipment |
| Auto repair | Lifts, alignment, diagnostics, tire machines | 36–60 months | Auto repair equipment |
| Restaurants | Ovens, hoods, refrigeration, POS | 24–60 months; 10–20% down | Restaurant equipment |
| HVAC, plumbing, electrical | Service vans, tools, diagnostic gear | 36–60 months | HVAC, plumbing and electrical equipment |
Buying second-hand? See used equipment financing for age limits, inspections and private-seller rules.
When Equipment Financing Is Not the Right Tool
If the purchase is not a durable, resalable asset, equipment lenders will decline or price it like an unsecured loan: software subscriptions, leasehold improvements, inventory and working capital belong with a term loan or line of credit. If you need the equipment plus a build-out, a second location or a business purchase, an SBA 7(a) can wrap it all into one 10-year loan if you can wait 30 to 60 days. And if the equipment is small and you want flexibility, a line of credit that you draw as needed is simpler than financing a $15,000 purchase on its own.
The Equipment Itself Is the Collateral
Because the lift, truck or imaging unit secures the financing, approvals lean on the asset and the business rather than on your personal credit alone, and the payment is spread across the years the equipment earns for you.
- From $10,000. Up to $2 million through our non-SBA lender network when the business supports it, and up to $5 million through SBA loans for established businesses buying multiple units or production lines.
- Three months of statements. Your last three business bank statements and the vendor quote to start; some states require four.
- One specialist. The same person from application to funding, paid by the funder, not by you.
Go Deeper on Equipment Financing
Rates, requirements, Section 179, loan vs lease, used equipment and industry-specific guides.
What Happens After You Apply With RAN Funding
Your application is handled in house. One RAN Funding specialist reads your statements the same day, presents the file to the best-matched funders in our network for the best deal (not to a list of a hundred), brings the approvals back and compares total payback, payment and term with you. Your information is not resold as a lead, and you are not contacted by lenders you never chose; you hear from one person, in English or Spanish, from the first call through funding and renewal.
- One application, one soft pull, three months of bank statements.
- One specialist, not a call list.
- Offers side by side with total payback before you decide.
- Business financing only: working capital, lines of credit, term loans, equipment, receivables and SBA.
How this differs from a loan marketplace is laid out in RAN Funding vs. Lendio, Fundera and LendingTree.
Equipment Financing Questions, Answered
Can I finance new or used equipment?
Both. Most lenders accept used equipment up to 10 to 15 years old from a dealer, and from a private seller with an inspection or appraisal. Used equipment typically carries a slightly higher rate and a 10% to 20% down payment.
Is the entire purchase price covered?
Often, for strong files buying new hard assets. Lenders may require 10% to 20% down on used equipment, start-ups or weaker credit, and may exclude delivery, installation or taxes. The vendor invoice is part of the application, not a promise of the approved amount.
What credit score do I need?
600 or higher for most programs; 680 or higher for the best rates. Below 600, lenders look for a larger down payment, strong cash flow or a titled asset with clear resale value.
How fast can equipment financing be approved?
Application-only approvals for strong files up to about $250,000 come back the same day or within 48 hours, and the vendor is typically paid within 48 to 72 hours of signing. Used equipment, private sellers and larger amounts add a few days for inspection or financial review.
What is the difference between an equipment loan and a lease?
With a loan you own the equipment from day one and the lender holds a lien. With a lease the lender owns it and you have a purchase option at the end: $1 on a capital lease, fair market value on an operating lease. Loans and $1-buyout leases are treated the same for Section 179.
Can I deduct financed equipment under Section 179?
Yes. Equipment placed in service in 2026 qualifies for Section 179 up to $2,560,000 (phasing out above $4,090,000 in purchases) and for 100% bonus depreciation, whether it is financed or paid in cash. Confirm with your CPA.
What should I compare between offers?
Total amount paid, rate or APR, fees, payment frequency, term, down payment, collateral beyond the equipment, personal guarantee and early-payoff terms. If an offer is a lease, confirm the end-of-term purchase or return requirements.
What happens after approval?
You sign, the lender pays the supplier directly, and delivery is scheduled. Payments usually start 30 days after funding. Confirm who receives the funds and when payments begin before scheduling delivery.
Is RAN Funding the lender?
No. RAN Funding is a business financing broker. We compare offers from bank, captive and independent equipment lenders, and the funding partner determines the approved amount, down payment, rate, fees, term and funding date.
See our application preparation guide and broker and compensation disclosure. Approval and terms depend on the funding partner. Rate ranges are typical of offers in the RAN Funding lender network as of October 2026 and are not an offer of credit. Section 179 figures are for tax year 2026; confirm with your tax advisor. Reviewed 14 October 2026.