Steps to Apply:
1
Quick Application:
Complete our simple online form and receive swift approvals.
2
Explore Choices:
Compare various options to find the ideal solution for your needs.
3
Personalize Your Terms:
​Choose the options that best suit your business objectives.
4
Get Funding:
Access funds within a few business days for most programs.
Get the Best Small Business Loan for Equipment Financing
Supporting small businesses with flexible equipment financing options to fuel growth and innovation. We match you with the best loan solutions to help you acquire the equipment you need to succeed
Need help? Reach out to us:
Email: CS@merchantprofunding.com
Business Equipment Loan / Financing
Are you a small business owner wondering how to get expensive new equipment with a low or no down payment? Or without paying high rates? You don't need a heap of cash reserves or to provide endless financial statements. You can do it with the help of Business Equipment Financing & Equipment Leasing. Small business owners now have many loan options for financing equipment beyond traditional banks. With business equipment loans, you can enjoy small monthly payments almost as if you were leasing equipment. Better yet, you own the new equipment outright once the balance is paid off.
Many small business owners face high equipment costs, whether upgrading or addressing breakdowns. Purchasing equipment costs money and maintenance, which can strain your cash flow.
Equipment financing offers a streamlined solution with high approval rates from both online lenders and traditional banks like Wells Fargo and Bank of America. Equipment financing loans have a simple application process, minimal paperwork, and quick funding—often with a low or no down payment and rates starting as low as 5%. These loans may also qualify for tax deductions, further increasing their appeal.
In this guide, we will answer the following questions and more:
What Is Equipment Financing and Who Is It For?
Business equipment financing is similar to term business loans, with the primary distinction being its exclusive focus on purchasing equipment. This financing option allows small business owners to acquire essential tools with low or no down payments, flexible repayment terms, and competitive rates.
Lenders often use the purchased asset as collateral, allowing for lower rates and potentially higher loan amounts. This arrangement helps improve cash flow while enabling businesses to make critical equipment purchases without the burden of hefty upfront costs.
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​Typical Loan Details:
Max Funding Amount:
Up to $5M per piece
Factor Rates:
Starting at 3.5%
Term:
1 - 10 years
Speed:
3 - 10 business days
Equipment financing works much like term business loans, involving fixed periodic payments (principal and interest) until the balance is paid in full. Once the loan is fully repaid, you own the equipment outright.
With funding up to $5M per piece and interest rates starting at 5%, equipment financing is an attractive option for purchasing heavy machinery, office furniture, vehicles, or specialized tools. Approval typically requires a minimum credit score of 600.
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Examples of Equipment Eligible for Financing:
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Computers, printers, and copiers
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Office furniture and desks
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Farm, factory, and industrial equipment
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Vehicles
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Gas station and auto repair equipment
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Construction and landscaping machinery
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Medical, dental, and salon equipment
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Restaurant appliances
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Laundry and dry cleaning machines
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Cannabis equipment
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Lenders may request details such as purchase price, age, and manufacturer of the equipment to assess its value and ensure the loan is adequately secured.
Equipment financing also offers potential tax savings through Section 179 Tax Deductions. These deductions can significantly reduce a business's tax liability when purchasing qualifying equipment. Consult with a tax professional to explore these benefits.
Example of How Equipment Financing Works:
Let's say you're a baker looking to increase cupcake production with an industrial oven costing $75,000. Through equipment financing, you negotiate a five-year term with an interest rate as low as 5%. The oven serves as collateral, reducing your rate and increasing your loan amount. After regular payments, you own the oven outright, boosting your business's capacity and revenue potential.
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How Does Equipment Financing Work?
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​Low Rates and Longer Terms: Collateral-backed loans offer favorable terms.
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Improved Cash Flow: Monthly payments avoid large upfront costs.
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Flexible Qualification: Lenders may overlook credit score or business age if collateral is provided.
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Ownership Benefits: Unlike leasing, you own the equipment after repayment.
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Tax Advantages: Interest payments are often tax-deductible.
What Are the Advantages of Equipment Financing?
What Are the Disadvantages of Equipment Financing?
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Depreciation Risk: Equipment may become obsolete before the loan is repaid.
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Maintenance Costs: Repairs are the owner's responsibility.
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Interest Payments: Financing costs more than outright purchases.
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Equipment Financing Compared to Other Products
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Loan Types
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Max Amounts
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Rates
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Speed
Merchant Cash
Advances
$7.5K - $1M
​Starting at 1-6% p/mo
1-2 business days
Receivables/Invoice Financing
$10K - $10M
Starting at 1% p/mo
1-2 week
SBA Loan
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$50K - $10M
Starting at Prime + 2.75%
8-12 weeks
Equipment
Financing
Up to $5M per piece Starting at 3.5% (SBA)
3-10+ business days
Business
Term Loan:
$10K - $5M
Starting at 1-4% p/mo
1-3 business days
Revenue-Based Business Loans
$10K - $5M
Starting at 1-6% p/mo
1-2 business days
Business
Line of Credit
$1K - $250K
Starting at 1% p/mo
1-3 business days
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Step 1: Confirm Purchase Feasibility Evaluate whether buying the equipment is necessary and aligns with your long-term business goals. Consider factors like depreciation and maintenance.
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Step 2: Gather Your Documents. Prepare the following documents:
- Prepare the following documents:
- U.S. driver's license
- Voided check
- Bank statements (3 months)
- Equipment invoice
- Financial statements (if required)
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Step 3: Complete the Application Submit an online application or contact a dedicated account manager to guide you through the process.
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Step 4: Speak to a Representative Discuss loan options, rates, and terms with an account executive. Expect full transparency with no hidden fees.
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Step 5: Receive Approval Once approved, funds are sent directly to the merchant, and payment setup options are arranged.
How to Apply for Equipment Financing
What If I'm Declined for Equipment Loans?
If declined, alternative financing options such as term loans or business credit cards may be available. You can also explore credit repair services or consult local credit unions for more options. These strategies can improve your credit profile and broaden your eligibility for future financing.
Conclusion
Business equipment financing is an excellent tool for acquiring essential equipment without significant upfront costs. By selecting the right lender and ensuring timely payments, you can expand your business capabilities while building a stronger financial foundation for future growth.
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