As of 2026, most US businesses see equipment loan rates in a roughly 6% to 30% APR range — bank and SBA-backed equipment loans sit at the low end (about 6%-15% APR) for strong-credit borrowers, while online lenders and equipment finance companies run higher (about 12%-30%+) for newer businesses or lower FICO scores. Your actual rate is set by four things: personal and business credit, time in business, the loan term, and how much you put down. The equipment itself acts as collateral, which is why these loans generally price below unsecured working-capital products. If you have strong deposits but the timing or paperwork of a traditional loan doesn't fit, a revenue-based advance can fund the same purchase in 24-48 hours by underwriting your bank deposits instead of your credit file.
Key takeaways
- Typical 2026 equipment loan rates run about 6%-30% APR: banks/SBA at the low end (~6%-15%), online and equipment finance companies higher (~12%-30%+).
- Four factors set your rate: credit (personal + business), time in business, term length, and down payment size.
- The equipment is the collateral, so rates usually price below unsecured working-capital loans.
- Terms typically match the equipment's useful life — often 2 to 7 years — so payments align with how long the asset earns.
- Section 179 lets many businesses deduct qualifying equipment in the year it's placed in service, changing the after-tax cost.
- Revenue-based / MCA marketplace funding underwrites bank deposits and revenue over credit: min ~$10,000, FICO 500+, funding in 24-48 hours.
- No legitimate funder can 'guarantee' approval or a rate before reviewing your bank statements and the equipment.
What counts as an equipment loan rate — APR vs. the number on the quote
The rate a lender quotes and the true cost of the loan are not always the same number. Sharpen the distinction before you compare offers:
- Interest rate: the base cost of borrowing the principal, quoted annually.
- APR (annual percentage rate): interest plus most fees, expressed as one yearly percentage. This is the honest apples-to-apples number — always ask for it.
- Factor or fees: some equipment finance companies bundle origination, documentation, or UCC-filing fees that don't show up in a bare interest rate. Ask what the APR looks like with every fee included.
Two offers can show the same interest rate and cost very differently once fees, term, and payment cadence are folded in. When you shop, insist on the all-in APR and the total number of payments — that is what protects your cash flow.
What actually moves your equipment loan rate
Underwriters price risk. Every factor below is really a proxy for one question: how likely are you to repay, and how easily can the lender recover if you don't?
- Credit profile: personal FICO still anchors most equipment loans for small businesses. Above ~700 opens the lowest tiers; below ~640 pushes you toward online lenders and higher pricing.
- Time in business: under two years is the single biggest reason a bank declines or prices up. Lenders want to see the business has survived a full cycle.
- The equipment as collateral: titled, resaleable assets (trucks, CNC machines, medical imaging) get better rates than fast-depreciating or specialized gear a lender can't easily resell.
- Down payment: putting 10%-20% down lowers the lender's exposure and typically your rate. Zero-down deals exist but price higher.
- Term length: longer terms lower the monthly payment but usually carry a higher rate and more total interest.
- Revenue and deposits: consistent bank deposits reassure any lender — and are the primary underwriting signal for revenue-based funding.
Example equipment loan rates by borrower profile
The table below shows illustrative, for-example rate ranges by borrower profile in 2026. These are not quotes — your actual rate depends on the lender, the equipment, and a full underwrite. Use them to set expectations before you apply.
| Borrower profile (for example) | Typical rate range (APR) | Likely term | Typical down payment |
|---|---|---|---|
| Established (5+ yrs), FICO 720+, bank/SBA | ~6%-11% | 3-7 yrs | 0%-10% |
| Established (2+ yrs), FICO 660-719 | ~10%-18% | 2-5 yrs | 10%-15% |
| Newer (1-2 yrs), FICO 600-659, online lender | ~15%-25% | 2-4 yrs | 10%-20% |
| Startup / FICO under 600 / thin file | ~22%-30%+ | 1-3 yrs | 15%-25% |
Notice the pattern: the strongest profiles get low rates and flexible terms; weaker profiles pay more and are asked to put more skin in the game. That is exactly where revenue-based funding changes the math — it reads your deposits, not just your FICO.
Decision framework: equipment loan vs. revenue-based funding
An equipment loan is not always the right tool — sometimes it's the slow tool for a fast problem. Here's how an underwriter would frame the choice.
A traditional equipment loan works best when:
- You have 2+ years in business and a FICO in the high-600s or above.
- The equipment is titled and resaleable, so it makes strong collateral.
- You can wait days to weeks for underwriting, appraisal, and closing.
- You want the lowest possible rate and can document tax returns and financials.
- The purchase is a planned capital expense, not an emergency.
Lean toward revenue-based / marketplace funding when:
- You need the equipment in hand in 24-48 hours, not next month.
- Your credit is thinner (FICO 500+) but your bank deposits are consistent.
- You're under two years in business and banks keep declining you.
- The equipment is specialized or used and hard to collateralize traditionally.
- You'd rather qualify on revenue and cash flow than on a credit-file review.
Avoid revenue-based funding when you clearly qualify for bank or SBA pricing and the timeline is relaxed — in that case, the lower rate is worth the wait. Match the tool to the constraint that's actually binding: is it cost, or is it time and approval odds?
How revenue-based funding prices and approves
Revenue-based funding — offered through an MCA marketplace — flips the traditional order of underwriting. Instead of leading with your credit score and the collateral, it leads with your bank statements.
- What's underwritten: your last few months of business bank deposits and overall revenue trend. Steady, healthy deposits carry more weight than your FICO.
- Baseline criteria: minimum ~$10,000, FICO 500+, and typically a few months of operating history with real deposit volume.
- Speed: because the review centers on statements rather than appraisals and tax packages, funding commonly lands in 24-48 hours.
- Cost structure: priced against your revenue rather than as a simple APR, so you should always weigh it against your cash-flow cushion — the payment is a share of what you're already bringing in.
- What it is not: no legitimate funder can guarantee approval or a rate before seeing your statements. Anyone who does is a red flag.
For a purchase that will start generating revenue immediately — a delivery vehicle, a second production machine, a piece of kitchen equipment that adds covers — matching the funding cost to the new cash flow is often more important than shaving a few points off a rate you can't access in time.
See our complete guide to business financing options for how equipment funding fits alongside working-capital and line-of-credit products.
Tax treatment: why the sticker rate isn't the whole cost
The rate on your equipment loan is only half the cost picture. US tax code can materially lower the true, after-tax cost of the purchase.
- Section 179: many businesses can deduct the full purchase price of qualifying equipment in the year it's placed in service, up to annual limits, rather than depreciating it over years.
- Bonus depreciation: may apply on top of or instead of Section 179 depending on the year's rules and how much you spend.
- Interest deductibility: equipment loan interest is generally a deductible business expense, which lowers the effective rate you actually bear.
Two purchases with identical rates can have very different after-tax costs depending on timing and how the deduction lands in your year. Confirm the specifics with your CPA — the rules and dollar thresholds change year to year, and this guide is not tax advice.
How to shop for the best rate without wasting time
Rate-shopping the wrong way burns weeks and can ding your credit. Do it in this order:
- Know your numbers first: pull your personal FICO, your time in business, and three months of bank statements. These determine which tier you actually fall into.
- Get the equipment quote in writing: the price, model, and whether it's new or used all affect collateral value and rate.
- Match lender to profile: strong credit and no time pressure → start with a bank or SBA lender. Thinner credit or a tight timeline → go to a revenue-based marketplace that reads deposits.
- Compare all-in APR and payment cadence, not headline rates. Ask every lender for the APR with all fees included.
- Batch your applications into a short window so multiple pulls count closer to a single inquiry.
- Weigh the payment against your cash flow, not just the rate. The best rate you can't get funded in time isn't the best deal.
If you already know speed and approval odds matter more than shaving points, our financing guide walks through how to prepare bank statements so a revenue-based underwrite moves fast.
Frequently asked questions
What is the average equipment loan rate for a US business in 2026?
Most businesses see rates in a roughly 6% to 30% APR range. Strong-credit, established borrowers using a bank or SBA-backed loan land around 6%-15%; newer businesses or lower FICO scores through online and equipment finance companies typically see 12%-30%+. Your exact rate depends on credit, time in business, term, and down payment.
Do equipment loans have lower rates than other business loans?
Usually, yes. The equipment itself serves as collateral, which lowers the lender's risk and typically prices equipment loans below unsecured working-capital loans for a comparable borrower. Fast-depreciating or highly specialized equipment that's hard to resell narrows that advantage.
What credit score do I need for a good equipment loan rate?
For the lowest bank and SBA tiers, lenders generally want a personal FICO in the high-600s or above plus two-plus years in business. Below that, you can still get funded through online lenders at higher rates, or through revenue-based funding that accepts FICO 500+ and underwrites your bank deposits instead of leaning on your score.
How fast can I get equipment financing?
A traditional bank or SBA equipment loan can take from several days to a few weeks because of appraisal and documentation. Revenue-based funding through an MCA marketplace typically funds in 24-48 hours because it underwrites your bank statements rather than requiring full financials and an appraisal.
Is revenue-based funding cheaper than an equipment loan?
Generally no — it's priced against your revenue and usually costs more than a low bank rate. Its advantage is speed and access: it funds in 24-48 hours and approves on deposits and revenue with FICO 500+ and a ~$10,000 minimum. Use it when timing or approval odds matter more than getting the absolute lowest rate.
How much should I put down on an equipment loan?
Down payments commonly run 10%-20%, though zero-down deals exist for strong borrowers and certain equipment. A larger down payment lowers the lender's exposure and usually earns you a better rate, but it also ties up cash you may need for operations — weigh both.
Can equipment loan interest and the purchase be tax-deductible?
Often, yes. Equipment loan interest is generally a deductible business expense, and Section 179 lets many businesses deduct the full purchase price of qualifying equipment in the year it's placed in service, subject to annual limits. This can meaningfully lower your after-tax cost. Confirm specifics with your CPA, as the rules and thresholds change yearly.
Can any lender guarantee my equipment loan approval or rate?
No. Any funder that guarantees approval or a specific rate before reviewing your bank statements and the equipment is a red flag. Legitimate lenders quote a rate only after underwriting your credit, revenue, time in business, and the collateral.
