6 min read Updated September 8, 2026
If you're buying a specific piece of equipment, equipment financing is usually 2-4× cheaper than an MCA. Here's why — and when the MCA still wins.
Frequently asked questions
Is equipment financing cheaper than an MCA for buying equipment?
Almost always, yes. Equipment financing typically prices at 8-20% APR over 24-72 months, with the equipment serving as collateral. MCAs run 25-55% APR-equivalent over 9 months and are unsecured (with a personal guarantee and UCC lien on the business). For a long-lived asset, equipment financing's longer term means lower cumulative cost than repeatedly using short-term capital for the same purpose.
Can I get equipment financing with bad credit?
Yes, often. Equipment financing is one of the most credit-friendly products because the equipment itself secures the loan. Owners with 580 FICO can frequently qualify for equipment financing where they wouldn't qualify for an unsecured term loan or line of credit. Final approval, down payment, and rate are the lender's decision based on the file.
When does an MCA make more sense than equipment financing?
Narrow cases: used or specialty equipment lenders won't finance (custom builds, unique fabrications); software or digital tools that aren't financeable as physical collateral; equipment + working capital combined (e.g., new oven plus payroll for the kitchen staff); genuine 48-hour speed emergencies where equipment financing's 5-15 day timeline can't beat the deadline.
What's the typical down payment on equipment financing?
Varies by lender and credit profile. Strong-credit borrowers can sometimes get 0% down financing; typical down payments run 10-20%. The equipment's value, age, useful life, and resale market all factor in. New equipment generally gets better terms than used.
Can I deduct equipment financing payments on my taxes?
Section 179 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 (up from $1.16M pre-2025 — the One Big Beautiful Bill Act raised the cap substantially starting in 2025). Interest on equipment financing is typically deductible as a business expense. Specific tax treatment depends on whether you structure as a loan or a lease — talk to a CPA before assuming.
How fast can I get equipment financing?
Typical timeline is 5-15 business days from application to funded — slower than an MCA but much faster than a bank term loan or SBA. Some equipment financing lenders can fund in 48-72 hours for strong-credit borrowers on standard equipment. Final timing is the lender's call.
Summary:
If you're buying a tangible asset with resale value, your first call should be equipment financing. Reserve MCAs for non-financeable purposes or genuine speed emergencies. ClearValue Lending will route equipment requests to equipment financing partners by default — that's the right answer for almost everyone. For more on matching product to use of funds, see Short-term vs. long-term financing and MCA vs. bank loan.
