Compare equipment finance options for your business

For some businesses, a wide range of equipment and machinery is essential to ensure financial success. Whether it’s heavy machinery, specialized medical equipment or the latest IT devices, equipment finance from a lender can give you access to the funds you need to help your business acquire what it needs to continue running.

What is equipment finance and who offers it?

Equipment finance is designed to give you access to the funds you need to purchase essential specialized equipment for your business. Whether you’re looking to purchase a forklift to move goods in your warehouse or new X-ray machines for your dental practice, equipment finance is on hand to help.

A large number of lenders offer equipment finance, though there is a range of options borrowers can choose from. However, choosing the best approach for your business will depend on a range of factors including your financial situation, taxation needs and budget.

Top business lenders you can compare

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Name	Product	Filter Values	Loan amount	Starting APR	Requirements
Lendio			$500 – $5,000,000	6%	Operate a business in the US or Canada, have a business bank account and have a personal credit score of 675+.	Submit one simple application to potentially get offers from a network of over 75 legit business lenders.	Check eligibility More Info		loading Fetching your data...
SmartBiz			$30,000 – $5,000,000	4.75%	650+ personal credit score, US citizen or permanent resident, 2+ years in business, $50,000+ annual revenue, no outstanding tax liens, no bankruptcies or foreclosures in past 3 years	Get funding for your small business with a government-backed loan and extended repayment terms.	Check eligibility More Info		loading Fetching your data...
Fundera			$2,500 – $5,000,000	7%	$300,000+ of annual revenue, 680+ personal credit score, in business for 3+ years	Get connected with short-term funding, SBA loans, lines of credit and more.	Check eligibility More Info		loading Fetching your data...
Credibly Business Loans			$5,000 – $250,000		6+ months in business, $180K annual business revenue, 500+ credit $15K+ in monthly deposits	Funding to cover business expenses with daily or weekly repayments.	Check eligibility More Info		loading Fetching your data...
LendingClub small business loans			$5,000 – $500,000	9.77%	12+ months in business, $50,000+ in annual sales, no bankruptcies or tax liens, at least 20% ownership of the business, fair personal credit score or better	With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.	Check eligibility More Info		loading Fetching your data...
Main Street Finance Group Business Loans			$5,000 – $1,000,000	Varies	1+ years in business, $10,000+ monthly revenue	Apply online and get approved within hours with minimal paperwork. Multiple financing options available.	Check eligibility More Info		loading Fetching your data...
Monevo Business Loans			$500 – $100,000	3.99%	Credit score of 500+, legal US resident and ages 18+.	Use this connection service to get paired with a loan you can use for business.	Check eligibility More Info		loading Fetching your data...

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How does equipment finance actually work?

Equipment finance gives you access to whatever important business equipment you need without having to pay for it upfront. Instead, you can receive the funds you need from a lender and then pay off your purchase over a set repayment period.

In other words, you get all the benefits of ownership before you actually own the equipment. However, there are several different financing routes you can choose to go with, including taking out a loan or a finance lease. Read on to find out more about how different types of equipment finance work.
Want to finance a business vehicle? Compare your options here

How can I finance my business equipment purchase?

• Commercial loan or equipment loan. This is probably the type of finance most borrowers are familiar with. As a secured loan, the asset you wish to buy will be used as security for the loan. This means that you own the item in question and can claim any interest charges and depreciation of the asset as tax deductions.
• Finance lease. A finance lease involves a lender purchasing the asset you want and then renting it out to a business for an agreed period. You can choose from flexible repayment terms to fit your budget, while the lease payments you make are usually tax deductible.
• Business credit cards. Depending on the type of equipment you’re purchasing, you might want to use a business credit card, Business credit cards offer a few advantages. For example, you can get an interest-free period on purchases using a 0% APR business card.

Compare equipment loans vs. leases

How do I compare lenders that provide equipment finance?

• Find out the interest rate. The interest rate offered will obviously influence how much you pay over the life of your loan, so look for one that offers a low rate of interest. You’ll also need to consider whether you want the security of a fixed rate or the possibility for saving that a variable rate offers.
• Compare the fees and charges. Whenever you sign up for any financial product, it pays to make sure you’re aware of all the fees and charges attached to the deal. Read all product information closely to know if the finance option you choose attracts fees such as an establishment fee or an early repayment fee.
• Establish if there are any taxation benefits. The range of equipment finance options are assessed differently when tax time rolls around. Each approach has its own potential tax benefits, so seek advice from your accountant to learn which one suits you best.
• What are the loan terms? How long can you take to pay off your asset? Terms typically range from one to seven years, so look for equipment finance that offers a term suited to your financial situation.
• Are there flexible repayment options? How often does each vehicle finance option let you make repayments? Look for a solution that lets you schedule your repayments in a way that suits your budget.

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The good and not-so-good of equipment finance

What should I consider avoiding when it comes to equipment finance?

The main pitfall to avoid with equipment finance is getting into a financial agreement that you simply cannot afford to service. It’s important to consider how essential any equipment is before you commit to a purchase, as well as make sure you’re aware of your ability to make repayments on time.

Another common issue is that some people can get confused by is the array of equipment finance options available. Seeking assistance from your accountant is one way to go to ensure you make the right choice.

Frequently asked questions

• Which equipment finance option should I choose?

  The right finance option for you will be influenced by a whole range of factors, including how you do your accounting and your approach to taxation. If you can, seek help from an accountant to determine the best product for your needs.

• What fees and charges should I keep an eye out for?

  Read product documents closely to look for things like establishment fees, late payment fees and early repayment fees. It can also be a good idea to keep an eye out for ongoing monthly or annual fees.

• I want to buy a tractor. What are my options?

  You have multiple options including manufacturer leases, online business loans and government programs. Read our article to learn more about tractor financing.

• I have a vineyard. Can an equipment loan benefit me?

  It could, especially if you’re looking to finance bulk equipment purchases like wine presses. Check out our guide on vineyard and microbrewery equipment loans to learn more.