Self-collateralized financing — keep working capital where it belongs.
Purchase machinery, vehicles, or technology with the equipment serving as the primary collateral. Lower rates than working-capital products, longer terms, and structural tax advantages.
At a glance
Amount
$10,000 – $1,000,000+
Term
24 – 84 months (often matched to equipment useful life)
Pricing
7 – 25% APR (depends on credit, equipment type, and term)
Time to fund
2 – 10 business days
Qualifications
600+ owner FICO, 12+ months in business; equipment vendor invoice required
See Your Approval Odds Across Financing Products
Heuristic approval-likelihood estimate per product based on your business profile — no
hard credit pull, no commitment, takes 10 seconds. Final approval is the lender's
decision after underwriting your full file. Estimates below are shown as
Approval Likelihood by Product.
Network-typical eligibility floor
Files at or above these thresholds typically have the broadest lender access. Below
doesn't mean declined — the lender decides on the full file.
| Product | FICO | Time in business | Revenue |
| Equipment Financing | 600+ | 6+ months | Varies by collateral |
- Equipment Financing: Equipment serves as collateral; resale value of the asset matters.
What to assemble before applying
Network-typical document requirements. Faster files have these ready on Day One.
Equipment Financing
- ✓ Business bank statements — Most recent 3 months
- ✓ Voided business check — For ACH setup
- ✓ Owner photo ID — Driver's license or passport
- ✓ Business entity proof — Articles, EIN letter, or LLC certificate
- ✓ Equipment quote or invoice — From the vendor — defines collateral
+ may be requested
- Business tax return — Last 1-2 years for larger tickets
- Business debt schedule
- Personal financial statement — For tickets above $250K
Lender-specific stipulations may add to this list. Have the required items ready at
intake to start the underwriting clock.
A $50K piece of equipment financed vs. expensed
$50,000 commercial truck, 60-month equipment loan at 14% APR, placed in service before year-end
- Equipment cost
- $50,000
- Down payment (illustrative)
- $0 – $5,000
- Term
- 60 months
- Quoted APR (illustrative)
- 14%
- Monthly payment
- ≈ $1,163
- Total paid over term
- ≈ $69,800
- Section 179 deduction (placed in service in tax year)
- Up to full $50K — confirm with CPA
Why this matters: The cash you preserve by financing — and the Section 179 deduction — often outweighs the ~$19,800 of interest over five years for a truck that earns revenue every month.
What underwriters actually weight
Equipment resale value
A Class 8 truck has a deep secondary market and prices well; specialized restaurant equipment with thin resale prices higher.
Owner FICO
700+ is the cliff for the best pricing. 600+ approvals exist, often paired with 10–20% down.
Vendor invoice
Equipment financing requires a vendor quote or invoice that defines the collateral — no invoice, no funding.
Equipment age
Most lenders cap used-equipment age at 5–10 years depending on type. Older specialty assets get tougher.
Typical files we route to Equipment Financing
Illustrative scenarios drawn from the lender partner network — not specific customer
data. Your actual options depend on your file.
Owner-operator trucking, 2 years TIB
Situation
$85K used Class 8 sleeper to replace a unit pulled out of service.
Typical match
Equipment loan against the truck, ~10% down on a 60-month term, vendor financing tied to the title.
Speed
Same-day approval; funded in 3 business days after vendor paperwork cleared.
Illustrative — not specific applicant data
Southern restaurant group, 6 years TIB
Situation
$120K kitchen build-out (ranges, hoods, walk-in cooler) for a new second location.
Typical match
Equipment financing structured as a 5-year loan with mixed-asset collateral, paired with a small line of credit for opening capital.
Speed
Approval in 48 hours; funded in 7 business days once vendor invoices arrived.
Illustrative — not specific applicant data
Midwest manufacturer, 12 years TIB, 720+ FICO
Situation
$300K CNC machine for a new contract — Section 179 timing critical to close before year-end.
Typical match
Equipment financing with 0% down, 84-month term, low-end APR. File qualified for full Section 179 expensing in the year placed in service.
Speed
Approval in 24 hours; funded in 5 business days.
Illustrative — not specific applicant data
How Equipment Financing funding moves
Three steps from application to funded. ClearValue Lending handles intake + matching;
the funding partners make the offer and funds.
1
Get a vendor quote or invoice
The equipment quote is the collateral definition — financing can't start without it. Used equipment needs make/model/year/VIN/serial.
2
Submit a 3-month statement file
Plus owner ID, business entity proof, and (for tickets above ~$150K) a 1–2 year business tax return and debt schedule.
3
Funder pays the vendor directly, equipment ships to you
Most funders cut the check straight to the vendor on signing. The first monthly payment lands ~30 days after the equipment is placed in service.
Loan vs. lease
Two main structures:
- Equipment loan — you own the equipment and make payments. At the end of the term, the equipment is yours free and clear. Generally cheaper over the life if you'd own the asset long-term anyway.
- Equipment lease — the lender owns the equipment and you make payments to use it. At lease end, you can typically buy it for a residual (often $1 or fair market value), return it, or renew. Better for fast-depreciating tech or equipment you'd refresh anyway.
Most small business equipment financing today is structured as a loan with a UCC-1 filing on the equipment, not as a true lease — even when called a 'lease' colloquially. Read the contract to see which you're actually signing.
How pricing varies
Three things move the rate: borrower credit (700+ FICO is the cliff for the best pricing), equipment type and resale market (a Class 8 truck has a deep secondary market and prices well; specialized restaurant equipment has a thinner market and prices higher), and term length (longer terms mean higher total cost but lower payments).
On a $50,000 equipment loan at 14% APR over 60 months, monthly payment is roughly $1,163 and total cost over the term is roughly $69,800 — meaningfully cheaper than the same $50,000 financed via a 1.28-factor MCA over 9 months ($64,000 payback in dollars but ~60% effective APR vs. 14%). The trade is the longer commitment and the requirement that the equipment exist with vendor documentation.
Section 179 and timing
Equipment buyers often time purchases around Section 179 and bonus depreciation rules — both let qualifying business equipment be expensed (in part or in full) in the year of purchase rather than depreciated over years. The interaction with financing is straightforward: the equipment can be financed and still qualify for the deduction, as long as it's placed in service in the tax year. Talk to your CPA about the specific limits each year.
What to watch for
Three watchouts: prepayment penalties (some equipment financing carries hard prepayment penalties — confirm before signing), residual value structures on leases (a 'fair market value' residual can vary significantly), and personal guarantees (most equipment financing for SMBs requires a personal guarantee even when the equipment itself is the primary collateral).
Program + tax-treatment sources
- IRS Section 179 (Publication 946) lets businesses deduct the full purchase price of qualifying equipment purchased or financed during the tax year, up to a 2026 cap of $2,560,000. — IRS Publication 946
- UCC Article 9 governs the security interest filings (UCC-1) that lenders use to perfect their lien on financed equipment — visible in public state UCC databases. — Cornell Law UCC §9-502
- Federal Reserve Small Business Credit Survey 2024 reports equipment financing among the highest approval-rate categories across SMB credit products — the secured-debt structure makes underwriting more forgiving than unsecured term loans. — Fed SBC Survey 2024
Frequently asked questions
Do I need a down payment for equipment financing?
Often no — many lenders offer 0% down for qualified borrowers. Down payments of 10–20% are common for newer businesses, weaker credit, or specialized equipment. The equipment itself is the primary collateral, which is why down payment requirements are lower than for unsecured products.
Can I finance used equipment?
Yes, though most lenders cap the equipment age at 5–10 years depending on type. Trucks, manufacturing equipment, and construction machinery are commonly financed used; specialized or rapidly-depreciating equipment is harder.
What's the difference between an equipment loan and an equipment lease?
An equipment loan means you own the equipment and pay it off over time, ending with full ownership. An equipment lease means the lender owns it; at end-of-term you can buy it (for a residual), return it, or renew. Many products marketed as 'leases' are functionally loans — read the contract to see which you're signing.
How long does equipment financing take to fund?
Most equipment financing approvals come back in 24–72 hours and fund within 2–10 business days after vendor invoicing is complete. Same-day approvals are common for files under $150,000 with strong credit.
What credit score do I need for equipment financing?
Approval starts at 600+ owner FICO with 12+ months in business and a clean industry. Best pricing typically requires 700+ FICO and 24+ months in business. Sub-600 approvals exist but at higher rates and often with a 10–20% down payment.
Can I deduct equipment financing payments?
The interest portion of equipment loan payments is typically deductible. Section 179 and bonus depreciation rules may also let you deduct a large portion of the equipment's cost in the year placed in service — confirm the specifics with your CPA, as the limits change yearly.
Best fit
- Manufacturing, construction, trucking, restaurant, medical, and tech buyers
- Owners who want to preserve cash for working capital
- Section 179 / bonus-depreciation buyers planning year-end purchases
- Businesses where the equipment has clear resale or salvage value
Probably not the right tool if
- Soft assets with no resale value (specialized installations, custom builds)
- Equipment under ~$10,000 (financing economics often break down)
- Owners with sub-600 FICO (rates climb steeply or approval fails)
- Used equipment older than ~7 years (many lenders won't finance)
Industries that lean on this product
Related guides
Quick answers
Ready to see real options for Equipment Financing?
~5 minutes to apply, no hard credit pull at pre-qualification, no commitment. We'll route
your file to the funding partners most likely to fund based on your specific situation.
Editorial disclaimer: This page is for educational purposes
and is not financial, legal, or tax advice. Rates, fees, qualification requirements, and
product availability are illustrative ranges that vary by lender, market conditions, and
individual business profile. ClearValue Lending is a funding platform; all financing is
subject to lender partner approval and terms. Actual approval, amount, and pricing depend on
lender review. Always read your contract end to end and verify specific numbers before
signing. ClearValue Lending is compensated by the funding lender on closed transactions.
https://clearvaluelending.com/business-loans/equipment-financing
