Equipment financing is a loan or lease arrangement that funds the purchase of business equipment  from trucks to kitchen systems to medical devices. The equipment itself typically serves as collateral, which reduces lender risk and makes approval more accessible than unsecured business loans. Most equipment loans finance 80 to 100% of the purchase price with terms of 2 to 7 years that align with the equipment's useful life. Monthly payments are fixed, and you own the equipment outright at the end of the loan term.

Yes — equipment financing for startups is more accessible than most other business loan types because the equipment serves as collateral. Some lenders will finance equipment for businesses that are less than a year old (sometimes even brand-new businesses) when the equipment has strong collateral value and the borrower has a decent credit score (typically 600+). A down payment of 10–20% may be required for newer businesses. If you're starting up and need equipment to begin generating revenue, this is often the right first financing product.

Equipment financing rates typically range from 5% to 18% APR, depending on your credit score, time in business, the type of equipment, and whether it's new or used. Well-qualified businesses financing new equipment with strong resale value (trucks, medical devices, heavy machinery) access the lowest rates. Newer businesses, lower credit scores, or specialized equipment with limited resale value fall toward the higher end. Because the equipment secures the loan, rates are generally lower than unsecured working capital or revenue-based financing. We compare offers across our lender network to find the most competitive rate for your specific equipment and credit profile.

Yes — used equipment financing is widely available, though rates are typically slightly higher than for new equipment, and some lenders cap the age of equipment they'll finance (often 10–15 years for certain equipment types). The key factor is the equipment's resale value. A 5-year-old Caterpillar excavator with a strong used market is very financeable. A 12-year-old proprietary server may not be. We work with equipment financing specialists across multiple industries who understand the used market for your specific equipment type.

Many equipment loans offer 100% financing with no down payment required — especially for well-qualified borrowers with strong credit and time in business. Some lenders require a soft down payment of 10–20% for newer businesses, lower credit scores, or equipment with lower resale value. If you'd prefer a lower monthly payment, you can always choose to put more down to reduce the financed amount. We'll lay out multiple scenarios so you can choose the structure that fits your cash flow best.

Equipment financing is relatively simple to document. You'll typically need: a completed business loan application, the equipment quote or invoice from the vendor, 3–6 months of business bank statements, and a business license or formation documents. For larger amounts ($100K+), some lenders also want recent business tax returns or a P&L statement. The process is significantly lighter than SBA or conventional bank loans — most equipment loans can be submitted and approved within a few days.

Most equipment loans finance 80 to 100% of the purchase price. Terms run 2 to 7 years, typically structured to align with the equipment's useful life — so you're not still paying for a truck that's been retired. Rates typically range from 5% to 18% APR depending on credit score, time in business, equipment type, and lender. New equipment generally gets better terms than used. Equipment that holds value well (trucks, medical equipment, heavy machinery) qualifies more easily than equipment with limited resale value.

Equipment financing (a loan) means you own the equipment free and clear at the end of the term. You build equity in a business asset. No restrictions on usage, no mileage caps, no return conditions. It's typically the better choice for equipment with long useful lives — trucks, medical devices, heavy machinery — where the total cost of ownership is lower than continuous leasing. Equipment leasing keeps monthly payments lower and makes it easier to upgrade when technology evolves. If the equipment you're acquiring becomes obsolete in 3–5 years (servers, certain tech), leasing can make more sense. Our advisors will help you model both scenarios and pick the structure that's most cost-effective for your specific equipment and business.

Often, yes. Section 179 of the IRS tax code allows many businesses to deduct the full purchase price of qualifying equipment in the year it's placed in service, even if you financed it and have only made a few payments. This means you may be able to finance equipment, preserve your cash, and still take a substantial first-year tax deduction. Bonus depreciation rules may apply as well. The combination of financing plus Section 179 is one of the most cash-efficient ways to acquire equipment. We're not tax advisors, so confirm the specifics with your CPA — but this is a major reason many businesses choose to finance rather than pay cash.