6 Best Equipment Loans for a Startup Business
This article is part of a larger series on Business Financing.
Startups looking for equipment loans and leases should choose a provider with a short time-in-business requirement and low annual revenue requirement. You should also choose a lender with good interest rates with terms that work with your business needs.
The six providers that provide the best equipment loans for a startup business are:
- Smarter Finance USA: Best overall for long-term equipment financing
- National Funding: Best for lower credit score borrowers
- eLease: Best lease options for businesses with poor credit
- Currency Finance: Best for flexible options for small startup businesses
- National Business Capital: Best for access to many leasing companies
- CIT: Best for competitive rates for qualified startups
Best Equipment Loans at-a-Glance
Maximum Loan Amount | Minimum Interest Rate | Minimum Credit Score | Down Payment | Maximum Term | Minimum Time in Business | |
|---|---|---|---|---|---|---|
 | $500,000 | 5% | 600 | 5% | 7 years | 6 months |
 | $150,000 | 5% | 575 | None | 5 years | 6 months |
 | $500,000 | 6% | 500 | 10% | 5 years | No minimum |
 | $500,000 | 6% | 625 | None | 6 years | 2 years |
 | $5 million | 8% | 650* | 20% | 5 years | No minimum |
 | $1 million | 5.49% | 620 | 20% | 6 years | No minimum |
* – No minimum credit score requirement if the borrower has been in business for at least six months with at least $120,000 in gross annual sales.
Smarter Finance USA: Best Overall for Long-term Equipment Financing
With financing for up to seven years, a short time-in-business requirement, and low starting interest rates, Smarter Finance USA is our choice for the best equipment loan or lease for startup businesses. The minimum time in business required is six months, making this a good choice for startups. Smarter Finance USA offers flexible lending options and competitive rates.
Businesses with a personal credit score of at least 600 that can put at least 5% down can qualify for an equipment loan or lease with Smarter Finance USA.
While you cannot apply directly through its website, Smarter Finance USA offers a form to submit your information. There’s also a toll-free number to call if you want more information.
National Funding: Best for Lower Credit Score Borrowers
National Funding is an excellent choice for an equipment loan for startup businesses mainly due to credit availability to borrowers with a credit score of at least 575. National Funding is more willing to lend to lower credit borrowers than others on this list, including some providers that list a lower minimum credit score.
With at least $250,000 in annual revenue and at least six months in business, you can qualify for an equipment loan. In addition, National Funding has an easy application process, quick decision and funding timeline, and early payoff discounts.
National Funding allows you to apply through its website or a toll-free number. The application process involves just a one-page application and three months of bank statements. A decision and funding are promised within 24 hours.
eLease: Best Lease Options for Businesses With Poor Credit
eLease offers equipment leases up to $500,000, with terms of up to five years. eLease is a viable option for startups that are tight on cash or have poor credit, given that there’s no minimum-time-in-business requirement nor a minimum-revenue requirement. Each application is reviewed on a case-by-case basis.
You can download an application from the eLease website or scan a quick response (QR) code from the website to start the application. If approved, you can receive funding within 24 hours.
Currency Finance: Best for Flexible Options for Small Startup Businesses
Startup businesses that have good credit but are tight on cash can benefit from Currency Finance, as it doesn’t require a down payment. However, the interest rates may be higher. Loans may be approved and funded in just one day, making Currency Finance a viable option if you need financing quickly.
Currency has one of the longer time-in-business requirements of any provider listed. The company prefers businesses to have at least two years in operation.
You can start your application directly on Currency Finance’s website. Businesses approved for equipment financing could see funding the same business day.
National Business Capital: Best for Access To Many Leasing Companies
National Business Capital is an online business loan broker that offers a variety of unique financing programs. It emphasizes personalized service and custom-tailored financing. No minimum credit score is required as long as you have at least $120,000 in gross annual sales and at least six months in business. If you don’t meet those requirements, National Business Capital requires at least a 650 credit score.
Your application will be shopped to more than 75 potential lenders to allow you to get the best rates and terms for your equipment loan or lease. You’ll need to submit three months’ worth of bank statements, but tax returns aren’t required.
You can call a toll-free number, schedule a call or apply directly on National Business Capital’s website. Smaller loans can be funded within 24 hours, while larger loan amounts may take up to five days.
Visit National Business Capital
CIT: Best for Competitive Rates for Qualified Startups
Borrowers with great credit and financials may be eligible for equipment financing through CIT. Starting rates of 5.49% are among the best available for startup businesses. Newer businesses may need to put 20% or more down to obtain financing, making this option appropriate only for those with sufficient reserve capital or prior industry experience.
With just an application, you can qualify for an equipment loan or lease of up to $500,000. That amount increases to $1 million if you submit financials. The financing term can go up to 72 months and funding can be as quick as one business day.
You can apply directly through the CIT website. The application takes as little as three minutes. Contracts are sent to you for electronic signatures if approved.
How We Selected the Best Startup Equipment Loans
When considering the best equipment loans for startup businesses, we chose providers with limited time in business requirements and lower annual revenue requirements. We also chose some options for low credit borrowers and some providers with higher credit score requirements. Lower credit borrowers will likely pay higher rates and fees while higher credit borrowers will see low fees and low interest rates.
In addition, we chose providers with easy online or phone applications and fast funding times. Many providers offer both equipment loans and leases. Before selecting a financing type, check out our guide comparing equipment loans and equipment leases. If you choose a loan, check out our guide on how to get a small business loan.
When Equipment Loans for Startup Businesses Make Sense
Most businesses need equipment when starting out. Manufacturing businesses need specialized plant equipment to fulfill orders, construction businesses require heavy equipment, and doctors’ offices need medical equipment. Many startup business owners prefer to use equipment loans as they provide access to needed equipment without paying the entire amount upfront.
Typically, equipment with a long-expected use life is best suited for an equipment loan. Equipment that has a short shelf life, such as computers, copiers, and other types of technology, might be suited better to equipment leases. Additionally, some manufacturers may offer direct financing or lease arrangements that are competitive with the terms, costs, and conditions of banks and online lenders.
Bottom Line
Getting equipment financing can be difficult for a startup business. The providers listed here offer equipment loans and leases to startup businesses that may be too new or don’t bring in enough revenue to get approved for other types of equipment financing. Compare rates, terms, and financing options from multiple providers and choose the one that works best for your business needs.
