In This Article
What Is Bank Equipment Financing?
Bank commercial equipment financing refers to loans provided by traditional banks — institutions like US Bank, Bank of America, BMO Harris, Wells Fargo, Chase, and PNC — specifically for purchasing business equipment. These banks offer some of the most competitive rates in the market because they have the lowest cost of capital. However, they also have the strictest qualification requirements. If you can qualify, bank financing is almost always the most cost-effective option.
Major Bank Equipment Lenders
US Bank offers equipment financing from $25,000 to $1 million+ with competitive fixed rates and terms up to 7 years. Bank of America provides equipment loans and leases with online applications and decisions in as fast as 24 hours for existing customers. BMO Harris (now BMO) specializes in commercial equipment lending with dedicated commercial banking teams. Wells Fargo offers equipment financing with relationship pricing for existing business banking customers. Chase provides equipment loans through their commercial banking division with industry-specific expertise.
Qualification Requirements
Banks typically require: 2+ years in business, annual revenue of $250,000+, credit scores of 680+, clean financial statements, and often an existing banking relationship. The application process is more rigorous than alternative lenders — expect to provide tax returns, financial statements, business plans, and detailed equipment information. Processing times range from 2-6 weeks, which is significantly longer than non-bank lenders.
Bank Rates vs. Alternative Lenders
Bank equipment financing rates typically range from 5-12% APR, compared to 8-30%+ from alternative lenders. This rate advantage can save tens of thousands of dollars over the life of a loan. For a $200,000 equipment loan over 5 years, the difference between a 7% bank rate and a 15% alternative rate is approximately $38,000 in interest savings. This is why Brobas always tries to match qualified borrowers with bank financing first.
Pros & Cons
Pros
- Lowest interest rates available
- Longest repayment terms (up to 7+ years)
- Builds strong banking relationships
- Fixed rate options for predictable payments
- Higher financing amounts available
Cons
- Strictest qualification requirements
- Longest application and approval process (2-6 weeks)
- Extensive documentation required
- May require existing banking relationship
- Less flexible for borrowers with credit challenges
Key Terms to Know
Best For
- Established businesses with strong financials
- Companies with 680+ credit scores
- Large equipment purchases ($100K+)
- Businesses wanting the lowest possible rates
Bank Commercial Equipment Financing vs. Equipment Finance Companies
How do these two options compare?
Banks offer the lowest rates (5-12% APR) but take 2-6 weeks and require 680+ credit. Equipment finance companies (EFCs) approve in 24-72 hours and accept scores as low as 550, but charge 7-18% APR. For a $200K loan, the bank saves ~$38K in interest over 5 years. Choose banks for best rates; EFCs for speed and flexibility.
Read about Equipment Finance Companies