Best Equipment Financing Lenders for Small Businesses 2022

In the market for an industrial stand mixer? A forklift, perhaps? Maybe some microscopes? Some other equipment entirely? Regardless, we can help you choose the right lender for your equipment financing needs.

For most businesses, that means Lendio―a funding marketplace that lets you compare equipment financing options. Of course, it’s just one of the lenders we found that can help you take advantage of the low rates and long terms offered by equipment financing.

But enough background. Let’s talk about the best places to actually get equipment financing.

You can technically use many types of business funding―including cash flow financing like short-term loans, invoice factoring, or even your business credit card―to buy business equipment.

Whether you should do that, however, is another matter entirely. Equipment loans have lower interest rates and longer loan terms than many working capital loans do. That can help keep the overall cost of your equipment down. Plus, most equipment loans require monthly payments, while many cash flow loans require weekly payments.

So for our rankings, we’ve stuck with equipment-specific loans rather than general working capital loans.

Of course, you know your business needs and finances best, so we trust you to do what’s right for your business. Just borrow carefully. The last thing you want to do is have a high-interest loan on equipment that will rapidly lose its value.

So you want to get equipment financing, but you also want to make sure you’re getting the best deal on your funding. How do you do it? Well, you might start by applying with Lendio.

Unlike most other companies on this list, Lendio is technically a lending marketplace instead of a direct lender. That means that when you apply to Lendio, your application can qualify you for loans with many different equipment financing companies. In fact, Lendio will actually match you with the lenders that can best meet your needs. You’ll get to compare your matches and see who has the best offer.

Now, this matchmaking process can take a few days, so if you need to purchase your equipment, like, yesterday, then you’ll probably want to go with a different company (see Balboa Capital below).

Keep in mind, too, that Lendio doesn’t guarantee you’ll get the match you want. In other words, you may apply for equipment financing but get matched with online lenders that don’t offer equipment loans. While that might not sound ideal, it’s probably better than just getting rejected outright. And of course, the better your borrower qualifications, the more likely you are to match with a really great equipment loan.

In a nutshell: we think Lendio is the best source of equipment financing for most businesses.

Read Lendio review

SBA loans provide an affordable form of equipment financing―and SmartBiz has made them easier to get than ever before.

Much like Lendio, SmartBiz is actually a lending marketplace and not a lender. But unlike Lendio, SmartBiz specializes in SBA 7(a) loans. These loans come backed by the U.S. Small Business Administration (SBA). Because of that, SBA loans come with strict rules on how much interest lenders can charge and how long terms have to be―to your benefit. SBA 7(a) loans have low interest and long repayment terms, making them great for equipment purchases.

Of course, those strict rules go both ways. To apply for a SmartBiz loan, your business will need to be at least two years old. And while the SBA doesn’t have specific income requirements, you’ll have to prove you make enough revenue to repay your loan. You’ll also need to be patient, since SBA loans take longer to approve and fund than alternative loans do. SmartBiz speeds the process up, but it can still take weeks.

Still, if you can meet the borrower requirements, SBA loans from SmartBiz are a government-backed good deal.

Read SmartBiz review

Do you need your new equipment ASAP? Then you’ll probably like Balboa Capital.

Lending marketplaces, SBA loans, and traditional lenders can take a long time to get you money. Balboa Capital, on the other hand, offers same-day equipment financing. It uses an automated approval process, meaning your application can get answered within an hour. But answers don’t pay for equipment. Luckily, Balboa Capital will also get you funds by the end of the day (in many cases). You can get your equipment in no time.

Note that Balboa Capital advertises loans up to $250,000, but you may be able to get a larger loan by calling them. You’ll just miss out on the speedy application and funding process―which frankly, is the primary selling point. Just know that you have that option.

Mostly, though, we suggest you stick to Balboa’s same-day equipment financing. It’s what makes Balboa Capital a standout lender.

If you like the sound of a lending marketplace like Lendio or SmartBiz, you’ll also like Fundera by Nerdwallet.

Fundera works pretty much the same way as those two companies: You submit a single application, and then Fundera works its magic to find you matching loan offers. So just like other marketplaces, Fundera by Nerdwallet gives you a great shot at competitive interest rates and loan terms. And since Fundera works with a somewhat different set of lenders than Lendio (though there is overlap), it may give you access to loans Lendio can’t.

Of course, Fundera by Nerdwallet has the same downsides you see from Lendio and SmartBiz―specifically a slow funding speed. And its equipment financing in particular comes with higher borrower requirements than many of its other lending options.

But with plenty of lenders to compare offers from, Fundera by Nerdwallet gives you another great marketplace opportunity.

Read Fundera by NerdWallet review

Have some time? Want the best possible rates? Then you want to get equipment financing from a bank―and more specifically, you want Bank of America.

Bank of America has the lowest interest rates we’ve seen on equipment financing. It offers a low standard starting rate, and you can get an even better rate by participating in Bank of America’s loyalty program. The more you use Bank of America, the higher interest rate discount you can get. The result: unbeatable low rates on equipment financing.

The catch? Well, like any traditional bank, Bank of America has pretty strict borrower requirements. To apply, you’ll need a credit score in the high 600s, annual revenue of at least $250,000, and a business over two years old. Those criteria are quite a bit higher than the other equipment financing companies on our list. Plus, Bank of America takes its time with your application and funding. You’ll probably wait at least a week for your money.

Of course, the absolutely killer interest rates still make Bank of America a great source for equipment financing.

Read Bank of America review

Not sold on the equipment lenders we’ve shown you so far? Here are a couple more lenders you might prefer.

• AgDirect - Best for agricultural businesses
• Crest Capital - Most flexible requirements
• U.S. Bank - Another decent bank option

Got an agricultural business? Then you should absolutely apply with AgDirect. It has the lowest interest rates we’ve found on equipment financing. Rates start at less than 3% (Bank of America’s lowest rate for reward members), making its loans very affordable.

Plus, AgDirect offers options for purchasing, leasing, and refinancing―and loans for auction, private party, and dealership purchases. With such low rates and great flexibility, you might wonder why AgDirect didn’t make our top five. Simple: It’s just for agricultural equipment. But if that’s what you need, you’ll have a hard time beating AgDirect.

Crest Capital offers a little more flexibility than most lenders. It doesn’t ask for a specific amount of annual revenue or personal credit score, and its website even notes that it has funded a variety of businesses that get turned down for financing elsewhere.

That’s not to say that Crest Capital will fund you if you have bad credit or an unprofitable business―it specifically looks for profitable businesses that have at least some good credit history. (If you have poor credit, we suggest you look at the best bad-credit business loans instead.) All the same, Crest Capital’s flexible approach to equipment financing makes it a great lender for many smaller or younger businesses.

If you want another good big bank option, we suggest looking at U.S. Bank. It doesn’t publish much information about its equipment financing, so it’s hard to know exactly how good the deals are. But it is a big bank, and big banks usually offer very competitive interest rates and financing terms.

And unlike some large banks (Chase and Wells Fargo come to mind), U.S. Bank doesn’t have any huge scandals that worry us. So while Bank of America might be our top bank for equipment financing, U.S. Bank provides another good option.

As you can see, you can get equipment financing from a number of lenders.

You can compare loan offers with Lendio, take advantage of SBA loans with SmartBiz, get fast funding from Balboa Capital, enjoy a different lending marketplace with Fundera by Nerdwallet, or earn low interest rates from Bank of America―or go with another lender entirely.

The choice is yours. We just hope you enjoy your new business equipment.

Before you accept a loan offer, do the math on how much your equipment financing will cost with our business loan calculator.

We made a list of business lenders that offer financing explicitly for equipment purchases. Then we scored those lenders on their rates, requirements, funding times, customer reviews, and other factors―and the resulting scores gave us the rankings you see here.

Yes, you can finance used equipment―at least in many cases. It will probably depend on the equipment, since your equipment doubles as collateral for the loan.

Think of it this way: a bunch of 10-year-old computers are pretty obsolete, but a 10-year-old skid-steer loader likely has years of usefulness ahead of it.

Your credit score will definitely affect your ability to qualify for equipment financing. Most of our recommended lenders look for a minimum credit score in the mid-to-high 600s, and those without specific credit requirements still want to see that you have pretty good credit.

So if you have poor credit, you may not qualify for true equipment financing. Sorry.

Don’t despair just yet, though, because you may still qualify for other business financing that you can use to purchase equipment. Yes, your rates and other costs will likely be higher, and you’ll probably have a shorter repayment term. But if you’re interested, you can see your best options in our roundup of the best business loans for bad credit.

Generally speaking, you’ll need to have been in business for at least one year to qualify for equipment financing. So depending on how you’re using the word “startup,” you might qualify for equipment loans.

But what if your business is still too young and you can’t wait to get money? In that case, you can check out the best startup business loans and see if any of them will meet your equipment-purchasing needs.

With equipment financing, you get a loan that you use to purchase equipment; with equipment leasing, you simply rent equipment for a monthly fee.

Some business owners prefer equipment financing because it allows them to own their equipment at the end of the loan term. Because equipment loans usually have long terms, financing works best for equipment that won’t become obsolete (or broken) in just a few years. And keep in mind that you may need cash for a down payment on your financing.

Other business owners prefer equipment leasing because it requires less up-front cash (for a down payment). Plus, your equipment lease may come with an option to purchase the equipment at the end of the lease term. If you’re not sure that your equipment will still be needed or current in a few years, leasing might make more sense.

Yes, you can use many types of business funding―including cash flow financing like short-term loans, invoice factoring, or even your business credit card―to buy business equipment.

Whether you should do that, however, is another matter entirely. Equipment loans have lower interest rates and longer loan terms than many working capital loans do. That can help keep the overall cost of your equipment down. Plus, most equipment loans require monthly payments, while many cash flow loans require weekly payments.

Of course, you know your business needs and finances best, so we trust you to do what’s right for your business. Just borrow carefully. The last thing you want to do is have a high-interest loan on equipment that will rapidly lose its value.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.