Business Equipment Loans

Business equipment loans are a type of financing designed to acquire, upgrade, or replace essential equipment and machinery. Often, the lender pays the vendor directly, and the borrower repays the lender through regular installments over an agreed-upon term.

One of the most prominent benefits of equipment loans surrounds the collateral requirement. In many cases, the equipment the business is purchasing serves as collateral for the financing, which eliminates the need for further collateralization. Not only does this protect the business’s assets, but it also gives the lender an extra degree of financial protection. This can lower interest rates and improve general terms.

You can use equipment financing to purchase almost any type of equipment, from construction machinery and manufacturing equipment to computers and CRM software. If you’re wondering about whether a specific type of equipment qualifies for financing, reach out to National Business Capital’s Business Finance Advisors for a more detailed answer.

Getting an equipment loan is as easy as finding a lender offering this service and filling out an application. Finding the most competitive offer, however, isn’t as straightforward.

There are many factors that affect your ability to get an equipment loan, including:

• Financial Background: Lenders base your eligibility around your business’s revenue, credit history, and tenure. More established businesses with strong credit and profitability are most likely to reach a favorable approval.
• The Lender Themself: There are many different types of business lenders, and each one carries unique differences. Banks and credit unions are often the strictest eligibility-wise, while non-bank options are more accessible but come with higher interest rates. Some lenders only work with specific industries or offer specialized products, as well.
• Type of Equipment: Some equipment is easier to finance than others. More complex pieces of equipment – or something out of the box – may increase the difficulty of reaching an approval.
• Market Conditions: A slumping economy yields tighter credit conditions. A higher prime rate can shift banking reserve guidelines, which makes them less likely to offer access to capital. Even so, approvals during a struggling economy often come with higher interest rates on average.

It’s best to apply for any type of financing when you’re profitable, but it’s not always possible. At National Business Capital, we have options for businesses across all industries, regardless of the above factors.

Many lenders use credit scores to determine a business’s eligibility for financing. Lower scores are seen as a risk of default, whereas higher scores offer confirmation that the business has handled credit responsibly in the past. Different lenders will have varying minimum requirements.

It’s recommended to have a 600+ credit score when applying for an equipment loan, but you may need something more substantial if you’re looking for an overtly expensive piece of equipment or working with a bank lender. At National Business Capital, we have options for all credit profiles.

Interest rates vary from 2% to 30%+, depending on a number of factors, including the financial background of your business, the lender you’re working with, and the market conditions surrounding your transaction, among many others. Generally speaking, businesses that can show little to no risk of defaulting on their financing are given the best interest rates.

Still, interest rates may rise nationally during a struggling economy. Most banks and credit unions use the Federal Reserve’s prime rate as the baseline for their interest rates, which will rise during periods of inflation or recession. Keeping a close eye on the prime rate is a great way to stay informed about the range of interest rates at any given time.

National Business Capital centralizes non-bank financing options for businesses. Unlock multiple options with one application, then work with your Business Finance Advisor to negotiate terms.

Our longstanding relationships with top B2B lenders allow us to reach offers you can’t find anywhere else. As market leaders in $100K–$10MM transactions with $2+B financed, we can get you the most money you qualify for, even in complicated situations, and find creative solutions to keep your business moving forward.

National Business Capital offers a fast, efficient, and secure avenue to explore your debt financing options. For those seeking business equipment loans, we can pull in specialized lenders to help you reach a contract that allows your business to grow without restraint.