Equipment financing lets businesses acquire machinery, vehicles, and tools without paying the full price upfront. In 2026, the market offers more options than ever, from traditional bank loans to alternative lenders who approve applications in hours.
How Equipment Financing Works
You apply for financing on a specific piece of equipment. The lender evaluates your creditworthiness and the equipment's value. If approved, they fund the purchase. You make monthly payments over 24-72 months. The equipment serves as collateral, which is why rates are lower than unsecured business loans.
Types of Equipment You Can Finance
Virtually any business equipment qualifies:
| Category | Examples | Typical Cost Range |
|---|---|---|
| Transportation | Trucks, trailers, vans | $15,000-$200,000 |
| Construction | Excavators, loaders, cranes | $20,000-$500,000+ |
| Manufacturing | CNC machines, lathes, presses | $10,000-$1,000,000+ |
| Medical | MRI, X-ray, dental chairs | $5,000-$3,000,000 |
| Restaurant | Ovens, refrigeration, POS | $5,000-$200,000 |
| Technology | Servers, telecom, IT equipment | $5,000-$500,000 |
| Agriculture | Tractors, combines, implements | $20,000-$500,000 |
Current Rates (May 2026)
| Lender Type | Rate Range | Speed | Credit Required |
|---|---|---|---|
| Banks | 5.49%-9.99% | 2-4 weeks | 700+ |
| Credit unions | 5.99%-10.99% | 1-3 weeks | 680+ |
| Equipment finance companies | 6.99%-18.99% | 1-5 days | 600+ |
| Alternative lenders | 12.99%-28.99% | Same day-2 days | 550+ |
| SBA loans | 6.00%-9.50% | 2-8 weeks | 680+ |
The Application Process
- Identify the equipment you want to purchase and get a quote
- Gather documents: bank statements (3-6 months), tax returns (1-2 years), equipment invoice
- Submit application: Online takes 2-5 minutes
- Credit review: Lender pulls your credit and reviews financials
- Receive offers: Compare rate, term, down payment, and total cost
- Accept and fund: Sign documents, lender pays the dealer/seller directly
- Make payments: Fixed monthly payments for the term of the loan
What Lenders Evaluate
| Factor | Weight | What They Look For |
|---|---|---|
| Credit score | 30% | 600+ for most programs |
| Time in business | 20% | 2+ years ideal |
| Revenue/cash flow | 20% | Consistent deposits, positive trend |
| Equipment type/age | 15% | Newer = better terms |
| Down payment | 10% | More down = lower risk |
| Industry | 5% | Some industries are restricted |
Section 179 Tax Deduction
The Section 179 deduction allows you to deduct the full purchase price of qualifying equipment in the year you buy it. For 2026, the limit is $1,220,000. This applies to both new and used equipment purchased or financed during the tax year.
Combined with bonus depreciation, you can potentially deduct 100% of your equipment purchase in year one, significantly reducing your tax liability.
Common Mistakes
- Only considering monthly payment: Always calculate total cost over the full term
- Not shopping multiple lenders: Rates vary 5-10% between lenders for the same borrower
- Ignoring prepayment penalties: Some loans charge fees for early payoff
- Financing equipment you don't need: Just because you qualify doesn't mean you should
- Not reading the fine print: UCC filings, personal guarantees, and blanket liens matter
Why Use a Broker
A broker like Brobas Capital Partners submits your application to multiple lenders simultaneously. You get competing offers and choose the best one. The broker's fee is paid by the lender, so there's no cost to you.
Apply at brobascap.com or call (773) 691-3925