What it is
Equipment financing lets you buy machinery, vehicles or technology and pay for it over time, with the equipment as the collateral. Because the lender can repossess and resell the asset, equipment loans are often easier to qualify for than unsecured loans, and approval can be quick. What it costs depends on three things: your credit, what you are buying, and how long you borrow.
Credit sets the starting rate. The equipment type adjusts it: construction and manufacturing equipment hold their value and get the best pricing, while computers and office furniture lose value quickly, so lenders charge more and shorten the term. Used equipment and small down payments also raise the rate.
LoansFlow planning estimates built from published lender ranges. They are not offers.
A good fit if you want
- Buying a specific machine, vehicle or system
- Preserving cash and credit lines for operations
- Matching the payment term to the equipment's useful life
Probably not the right tool if
- Working capital or general expenses
- Buying equipment that will be obsolete before the loan ends
Typical requirements
- An invoice or quote for the equipment
- Time-in-business and bank statements; startups may need a larger down payment
- Credit review of the business and owners
- Proof of insurance on the equipment
Run the numbers
These calculators run in your browser and are estimates, not offers. Change any number to see the effect.
The rates below come from a LoansFlow planning model built from the ranges lenders and rate guides publish: roughly 6% to 11% for strong borrowers and 25% to 40% for the weakest credit. They are illustrative estimates, not offers. Your actual rate depends on time in business, cash flow, down payment and the lender.
Estimated rates by credit profile and equipment type
New equipment with a 10% down payment. Used equipment adds about 1.5 points, a down payment of 20% or more takes off about half a point, and under 5% down adds about one point.
| Credit profile | Construction and earth-moving | Trucks, trailers and fleet vehicles | Manufacturing and CNC machinery | Agricultural equipment | Medical and dental equipment | Restaurant and food service | Office furniture and fixtures | Computers, IT and software-heavy gear |
|---|---|---|---|---|---|---|---|---|
| Excellent (750+) | 7.50% | 8.00% | 7.50% | 7.25% | 8.00% | 8.50% | 8.50% | 9.50% |
| Good (700-749) | 10.00% | 10.50% | 10.00% | 9.75% | 10.50% | 11.00% | 11.00% | 12.00% |
| Fair (650-699) | 14.00% | 14.50% | 14.00% | 13.75% | 14.50% | 15.00% | 15.00% | 16.00% |
| Weak (600-649) | 20.00% | 20.50% | 20.00% | 19.75% | 20.50% | 21.00% | 21.00% | 22.00% |
| Poor (below 600) | 28.00% | 28.50% | 28.00% | 27.75% | 28.50% | 29.00% | 29.00% | 30.00% |
Why the equipment type changes the rate
| Equipment type | Rate adjustment | Typical useful life | Usual maximum term |
|---|---|---|---|
| Construction and earth-moving | +0.00 pts | 10-15 years | Up to 7 years |
| Trucks, trailers and fleet vehicles | +0.50 pts | 7-12 years | Up to 6 years |
| Manufacturing and CNC machinery | +0.00 pts | 10-20 years | Up to 7 years |
| Agricultural equipment | -0.25 pts | 10-20 years | Up to 7 years |
| Medical and dental equipment | +0.50 pts | 7-10 years | Up to 7 years |
| Restaurant and food service | +1.00 pts | 5-10 years | Up to 5 years |
| Office furniture and fixtures | +1.00 pts | 5-10 years | Up to 5 years |
| Computers, IT and software-heavy gear | +2.00 pts | 3-5 years | Up to 3 years |
How to apply
- Get a quoteA written quote from the vendor tells the lender exactly what is being financed.
- Decide: loan or leaseA loan builds ownership. A lease may lower payments and can include an end-of-term buyout; compare total cost.
- Check your creditReview your personal and business credit reports. Fix errors before applying.
- Compare offersGet offers from your bank, the equipment vendor's financing arm and an online lender. Compare APR and total cost.
- Close and take deliveryThe lender usually pays the vendor directly and files a lien on the equipment.
Need a lender, an SBA district office or a free counselor? Use the national directory.
Common questions
Loan or lease?
With a loan you own the equipment and can depreciate it. A lease usually has lower payments and may offer a fair-market-value or fixed buyout at the end. Which is cheaper depends on the buyout and your tax situation.
Is there a tax benefit?
The tax code lets many businesses deduct the cost of qualifying equipment in the year it is placed in service, subject to annual limits that change. Ask your tax professional what applies to you.
Can the SBA finance equipment?
Yes. 7(a) loans and 504 loans (for long-life equipment) can both finance equipment, often with longer terms.
Keep reading
- Term Loan vs. Business Line of Credit: How to Choose
- How to choose a lender
- Debt Service Coverage Ratio (DSCR) Explained, With Examples
- Uncommon ways to finance
- Search federal grants
Sources
General information, not financial, tax or legal advice. LoansFlow is not a lender and this is not an offer of credit. Program rules, limits, fees and rates change; confirm current terms with your lender and the issuing agency. SBA figures reflect SBA.gov and the fiscal year 2027 fee notices (effective October 1, 2026).