3 of the Best Online Equipment Loans in October 2025

Pros explained

• Affordability: Many equipment loans are secured, and secured loans generally have lower interest rates than unsecured loans. 
• Fast funding: Many lenders can fund equipment loans in a few days. Some even offer funding within one business day. 
• Collateral: The equipment you finance often acts as collateral, meaning you generally don’t need to pledge other valuable assets to secure the loan. Secured loans might be easier to get than unsecured loans.
• Tax benefits: The interest you pay on an equipment loan might be tax deductible. 
• Ownership: Once you repay the loan, you own the equipment. 

Cons explained

• Limited flexibility: An equipment loan must be used to buy equipment. If you have other funding needs, an alternative form of business financing might make more sense. 
• Down payment: Some lenders require significant down payments. 
• Repayment term: Depending on the repayment term, your loan might outlive the equipment. 
• Maintenance costs: You are generally responsible for the maintenance of the equipment.

How to apply for an equipment loan

The process of applying for an equipment loan varies by lender. However, there are some general steps you can expect. 

1. Confirm your equipment and funding needs

Confirming how much money you need to buy equipment can prevent you from borrowing too little or too much. It can also help you narrow your list of potential lenders, as lenders offer varying loan amounts. 

2. Check your eligibility

Lenders might consider factors such as your credit score, revenue and time in business to qualify you for an equipment loan. Knowing whether you are likely to meet these requirements can help you decide whether applying for a particular loan makes sense.

3. Prequalify with several lenders

Many equipment loans offer prequalification, letting you view estimated rates and terms without affecting your credit score. Getting prequalified with three to five lenders can help you compare potential offers. Remember, however, that prequalification is not approval.

4. Review and compare lenders

Once you narrow your list of potential lenders, review and compare their interest rates, repayment periods, funding times, fees and other terms to find the best equipment loan for your situation.

5. Compile documents and apply

Compiling your documents in advance can help streamline the application process. You might need to provide financial statements, bank statements, tax returns and details about how you plan to invest the equipment loan.

More: How to Apply for and Get a Business Loan in 7 Steps

Tips on comparing equipment financing options

Compare the following factors when considering your equipment financing options:

• Interest rate: Interest rates affect the cost of borrowing. Generally speaking, a lower rate will help you save money on interest.
• Repayment term: The repayment term can impact your monthly payment and the amount of interest you pay over the life of the equipment loan. Longer repayment terms generally have lower monthly payments but higher total interest costs, while shorter repayment terms generally have higher monthly payments but lower total interest costs. 
• Funding time: Some lenders offer same-day financing, while others can take days or weeks. Funding speed might be particularly important if you need cash urgently. 
• Fees: Your interest rate isn’t the only factor that determines the cost of your equipment loan. Some lenders charge fees—including origination fees, processing fees and prepayment penalties—that can increase the cost of borrowing. 
• Loan purpose: Some lenders might restrict how you can use the funds. Ensure a lender will allow you to buy the type of equipment you need. 

Other ways to finance business equipment

Equipment loans aren’t the only way to finance business equipment. If an equipment loan isn’t a good fit for you, you can explore alternatives.

Short-term business loan

A short-term business loan lets you borrow money for business purposes, including purchasing equipment, buying inventory and hiring staff. It generally requires repayment within a year, although some short-term unsecured business loans might have two-year repayment terms. Many short-term business loans are unsecured, meaning they aren’t backed by collateral, although you might have to sign a personal guarantee, which is a promise to repay the debt using your personal assets if the business defaults.

Business line of credit

A business line of credit is a revolving debt like a credit card. You can continue drawing on the funds as long as you haven’t reached the limit. Interest is charged only on the borrowed amount.

SBA 7(a) loan

An SBA 7(a) loan can be used for various business purposes, including buying equipment. Like an SBA 504 loan, it is backed by the government and offered by approved lenders. The maximum loan amount is $5 million, and the maximum repayment term is 10 years for equipment purchases.

FAQ

Is financing business equipment a good idea?

Financing business equipment might be a good idea if you want to preserve cash. There are pros and cons, however, and an equipment loan doesn’t make sense for everyone.

What are equipment loans used for?

Equipment loans are used to buy business equipment, which can include heavy machinery, office furniture and many items in between. The equipment often serves as collateral for the loan.

What credit score do you need for an equipment loan?

The credit score you need for an equipment loan varies from one lender to another. However, having a good or excellent credit score might improve your chances of approval.

How much will an equipment loan cost?

How much an equipment loan costs depends on various factors, including the loan amount, interest rate, loan term and loan fees. 

How long does it take to pay off an equipment loan?

How long it takes to pay off an equipment loan varies. Your financial situation, the equipment you want to purchase and the lender’s policies can play a role. Generally speaking, however, equipment loan repayment terms might range from one to 10 years.