Equipment Financing 101: Rates, Terms & How to Finance Business Equipment
Equipment financing lets you buy or lease business equipment with the asset itself as collateral. Learn how equipment loans work, current rates, eligibility, and how to compare the best equipment financing options.
Equipment Financing 101: Rates, Terms & How to Finance Business Equipment
Equipment financing helps businesses purchase or lease the machinery, vehicles, and technology they need to operate and grow — with the equipment itself typically serving as collateral. It's one of the most accessible forms of business financing because the asset secures the loan.
What Is Equipment Financing?
Equipment financing is a loan or lease used specifically to acquire business equipment. The purchased asset serves as collateral, which often means lower rates and easier approval than unsecured loans.
Financable equipment includes:
- Construction and heavy machinery
- Trucks and commercial vehicles
- Restaurant and kitchen equipment
- Medical and dental equipment
- Manufacturing machinery
- Technology and IT hardware
See our Equipment Financing page for the full overview.
How Equipment Loans Work
- Choose your equipment and get a quote
- Apply for financing through ASBCLF
- Get approved — the lender pays the equipment vendor directly
- Repay in fixed monthly payments over the term
- Own the equipment at the end of the loan term
Equipment Financing Rates and Terms
| Feature | Typical Range | |---|---| | Loan amount | Up to $10 million | | Term | 2 – 7 years (matches equipment life) | | Interest rate | 6% – 30% APR | | Down payment | 0% – 20% | | Funding speed | 1 – 5 business days |
Equipment Loan vs. Equipment Lease
- Equipment loan: You own the equipment outright once paid off.
- Equipment lease: You use the equipment for a set term and return it or buy it at the end.
Leases can offer lower monthly payments and potential tax advantages, but you don't build equity in the asset.
How to Qualify for Equipment Financing
- Credit score: 600+ (higher scores get better rates)
- Time in business: 6+ months preferred
- Revenue: Consistent cash flow to cover payments
- Down payment: Often 0%–20% of equipment cost
- Equipment condition: New or used equipment can qualify
Benefits of Equipment Financing
- The asset secures the loan — less reliance on personal credit
- Preserves working capital — no large upfront outlay
- Predictable fixed payments — easy to budget
- Section 179 tax deduction — many purchases qualify for accelerated depreciation
Frequently Asked Questions
Can I finance used equipment? Yes. Many lenders finance used equipment, though rates may be slightly higher and the term shorter.
Do I need a down payment? Often 0%–20% depending on credit, equipment type, and lender. Strong applicants may qualify for 100% financing.
Is equipment financing secured? Yes — the equipment itself serves as collateral, which is why rates are typically lower than unsecured options.
How fast can I get funded? Most equipment loans close within 1–5 business days.
Ready to finance your next equipment purchase? Apply through ASBCLF and compare equipment financing offers from our lender network.