Are you in the market looking for a forklift? An industrial stand mixer, maybe? Perhaps some microscopes? Or some other equipment entirely? Regardless, this article can help you choose the right lender for your equipment loaning needs. You possibly know that equipment financing, or equipment loans, are a specific kind of business loan. They usually have long terms and low rates that make them appropriate for business equipment purchases. And because the equipment you purchase does double duty as the purpose and the collateral for the loan, these business loans can be easier to get than other types of loans.
Best Places Actually To Get Equipment Financing
Best overall: Lendio
So you want to get an equipment loan, but you also want to ensure you are getting the best deal on your financing. How do you do it? You can start by applying with Lendio. Contrary to most other companies in this article, Lendio is technically a lending marketplace and not a direct lender. That indicates that when you apply to Lendio, your loan application can qualify you for loans with various equipment financing companies. Indeed, Lendio will actually match you with the lenders that can best meet your needs. You will get to compare your matches and see who has the best deal.
Now, this matchmaking procedure can take several days, so if you have to purchase your equipment, like, yesterday, then you will possibly want to go with a different company (check Balboa Capital below). Bear in, too, that Lendio does not guarantee you will get the match you need. In simple words, you might apply for equipment financing but get matched with online lenders that do not provide equipment loans. While that might not sound appropriate, it is possibly better than just getting denied outright. And of course, the better your borrower requirements, the more likely you are to match with a really great equipment loan.
Most flexible requirements: Crest Capital
Pretty much all financers have a strict list of qualifications they use to judge your application with; however, Crest Capital provides a little more flexibility than most lenders. In fact, provided you have a good credit report, Crest Capital encourages you to apply. It does not ask for a particular amount of annual revenue, time in business, or personal credit score. Crest Capital’s website even indicates that it has financed various small- to medium-sized businesses that get turned down for financing elsewhere.
That is not to say that Crest Capital will fund you if you have an unprofitable business or bad credit―it looks explicitly for profitable companies with at least some good credit history. (As long as you have a bad credit score, look for lenders that fund businesses with bad-credit scores instead). Essentially, Crest Capital’s flexible approach to equipment loaning makes it a great lender for many smaller or younger businesses.
Best for SBA loans: SmartBiz
SBA loans offer an affordable form of equipment loaning―and SmartBiz has made them easier to acquire than ever before. Similar to Lendio, SmartBiz is indeed a lending marketplace and not a lender. However, unlike Lendio, SmartBiz concentrates on SBA 7(a) loans. These loans come secured by the U.S. Small Business Administration. Thus, SBA loans come with rigorous rules on how long terms have to be and how much interest lenders can charge―to your benefit. Generally, SBA 7(a) loans have longer repayment terms and low interest, making them great for equipment purchases.
Of course, those rigorous rules go both ways. To apply for a SmartBiz loan, your company will have to be at least two years old. And while the SBA does not have particular income requirements, you will have to prove you make sufficient revenue to repay your loan. Moreover, you have to be patient because SBA loans take longer to accept and finance than alternative loans do. But SmartBiz speeds the process up, even though it can still take weeks. Still, provided you meet the borrower requirements, SBA loans from SmartBiz are a government-backed good deal.
Best for fast funding: Balboa Capital
Do you require a new piece of equipment ASAP? Then you will possibly like Balboa Capital. SBA loans, Lending marketplaces, and traditional lenders can take a long duration to get you financing. On the other hand, Balboa Capital offers same-day equipment financing. It utilizes an automated approval process, indicating your loan application can get responded to within an hour. However, answers do not pay for equipment. Fortunately, Balboa Capital will also get you money by the end of the day (in most cases). You can buy your equipment in no time.
Bear in mind that Balboa Capital promotes loans up to $250,000; however, you may be able to get a larger loan by contacting them. You will just miss out on the fast application and funding process―which, frankly, is the main selling point. But just know that you have that option. Mostly, though, it is wise to stick to Balboa’s same-day equipment financing. It is what makes Balboa Capital a standout lender.
Best big bank option: Bank of America
Do you have some time? Do you want the best possible loan rates? Then you need to get equipment financing from a bank―and mainly, get the equipment financing from Bank of America. Typically, Bank of America has the lowest interest rates we have seen on equipment financing. It provides a low standard starting rate, and you can even get a better rate by participating in Bank of America’s loyalty program. The more you utilize Bank of America, the higher the interest rate discount you can obtain. The result is unbeatable low rates on equipment loaning.
The catch? Well, just like any traditional bank, Bank of America has pretty rigorous borrower qualifications. To apply, you will require annual revenue of at least $250,000, a credit score in the high 600s, and a business over two years old. Those qualifications are quite a bit higher than the other equipment financing lenders on our list. Moreover, Bank of America takes its time with your loan application and funding. You will possibly wait at least a week for your money.Of course, the absolute killer interest rates still make Bank of America a great source for equipment financing.
Best equipment financing for bad credit: Currency
Currency is an online lender that concentrates on equipment loaning with minimal credit requirements and provides competitive terms for qualified borrowers. With Currency, you might be able to borrow up to $10 million for a long-term loan and up to $2 million for a short-term loan. You will only require a credit score of 475 to be eligible for a short-term loan, and no credit score is needed for a long term loan (you just need an annual revenue of $100,000). Interest rates at Currency are also lower than those offered by other online lenders with APRs starting at 4.99% for loans (however, only strong borrowers will possibly qualify for those rates).
Another benefit of Currency is that the lender is partnered with eBay. Currency is integrated with eBay through its Express lending platform, allowing users to apply for financing for their eBay purchases, making Currency a good option for small business owners who use eBay for most of their equipment purchases. Once approved, the Express platform handles the purchase of the item and payment to the eBay seller.
The best equipment loan lender with no collateral needed: OnDeck
OnDeck has served 100,000 borrowers since 2007. Compared to other alternative lenders that can offer funds in 48 hours or less, OnDeck provides higher loan limits and a lower range of APRs on its products. APRs begin in the single digits for loans and 13.99-percent for lines of credit (even though only borrowers with good credit scores will be eligible for these rates). You can borrow up to $100,000 for a line of credit and $500,000 for a loan. Your business must be at minimum one year old with $100,000 in annual revenue to be eligible. You will require a personal credit score of 500 or more to be eligible for either product. Repayment terms range from three months to three years, indicating you can be debt-free as fast as you choose. OnDeck requires daily or weekly repayment, which some business owners prefer to large monthly payments.
As you can see, you can acquire equipment loaning from multiple lenders.You can compare loan offers with Lendio, make excessive use of SBA loans with SmartBiz, get fast funding from Balboa Capital, enjoy flexible borrower requirements from Crest Capital, get equipment financing for bad credit from currency, earn low-interest rates from Bank of America―or go with another lender entirely.
The decision is yours. We just hope you get the best deal.