What is the average interest rate for an equipment loan?

Equipment loan interest rates typically range from 4% to 30% APR depending on your qualifications and lender type. Bank equipment loans average 6-12% APR for well-qualified borrowers. SBA 504 loans for equipment offer rates around 5-7%. Online lenders charge 8-25% APR, while alternative lenders may charge 15-30% or higher for borrowers with credit challenges. Equipment dealers often offer promotional rates of 0-5% APR on select equipment, subsidized by manufacturers.

What factors determine my equipment loan interest rate?

Key factors affecting your equipment loan rate include: credit score (personal and business)—scores above 700 qualify for the best rates; time in business—established businesses (2+ years) receive lower rates; annual revenue and cash flow—demonstrating strong repayment ability; equipment type and condition—new equipment from recognized manufacturers qualifies for better rates than used or specialized equipment; down payment amount—larger down payments (10-20%) reduce rates; loan amount and term—mid-range loans often have optimal pricing; and industry risk—some industries are considered higher risk by lenders.

Are equipment loan rates fixed or variable?

Equipment loans are available with both fixed and variable rates, though fixed rates are more common. Fixed-rate equipment loans lock in your interest rate for the entire term, providing predictable payments and protection from rate increases—ideal for budgeting and longer terms (3-7 years). Variable-rate equipment loans are tied to an index like Prime Rate plus a margin, meaning payments can fluctuate. Variable rates may start lower but carry risk of increases. Most borrowers prefer fixed rates for equipment financing due to payment predictability and the current interest rate environment.

How do equipment loan rates compare to equipment lease rates?

Equipment loans and leases have different cost structures. Loans typically have lower overall costs because you build equity and own the asset outright. Loan rates range from 4-30% APR. Leases may have higher implicit rates (often 8-20%+ when calculated as APR) but offer lower monthly payments, tax advantages (fully deductible payments for operating leases), and flexibility to upgrade. For equipment you'll use long-term and want to own, loans are usually more cost-effective. For rapidly depreciating technology or equipment you'll replace frequently, leases may offer better value despite higher rates.

Can I negotiate equipment loan rates?

Yes, equipment loan rates are often negotiable. Effective negotiation strategies include: getting multiple quotes (3-5 lenders) to create competition; leveraging strong financials and credit to request rate matching; offering a larger down payment in exchange for lower rates; asking about relationship discounts if you have existing accounts; requesting fee waivers on origination or documentation costs; considering shorter loan terms for rate reductions; timing your purchase during promotional periods or end-of-quarter when lenders push volume; and working with equipment dealers who may have rate buy-down programs from manufacturers.

What credit score do I need for the best equipment loan rates?

Credit score significantly impacts equipment loan rates: 750+ (Excellent) qualifies for the best rates, typically 4-10% APR from banks and prime lenders; 700-749 (Good) receives competitive rates around 7-15% APR; 650-699 (Fair) may see rates of 12-20% APR; 600-649 (Below Average) typically qualifies at 18-25% APR with online or alternative lenders; Below 600 (Poor) may still qualify but expect rates of 20-30%+ APR. Because equipment serves as collateral, credit requirements are often more flexible than unsecured loans, and strong business cash flow can partially offset lower credit scores.

Do equipment loan rates vary by equipment type?

Yes, equipment type significantly affects loan rates and terms. Categories with the best rates include: vehicles and trucks (strong resale value, 5-12% APR), construction and heavy equipment (high demand, 6-15% APR), manufacturing equipment (established markets, 7-15% APR), and medical/dental equipment (stable industry, 6-14% APR). Equipment with higher rates includes: restaurant equipment (high failure rate industry, 10-25% APR), specialized or custom equipment (limited resale market, 12-25% APR), and technology equipment (rapid depreciation, 10-20% APR). New equipment from recognized manufacturers qualifies for better rates than used, older, or off-brand equipment.

What fees should I expect beyond the interest rate?

Common equipment loan fees include: origination fees (0.5-3% of loan amount); documentation or administrative fees ($150-500 flat fee); appraisal fees for used equipment ($200-1,000); UCC filing fees ($50-200 for lien recording); late payment fees (typically 5% of payment or $25-50); prepayment penalties (some lenders charge 1-5% for early payoff); and equipment inspection fees for certain asset types. Always request a complete fee disclosure and calculate the all-in APR including fees. Some lenders advertise low rates but add substantial fees, while others offer higher rates with minimal fees—compare total cost, not just interest rate.

How does down payment affect my equipment loan rate?

Larger down payments typically result in lower interest rates because they reduce lender risk. With no down payment (100% financing), expect rates 2-5% higher than with substantial down payment. A 10% down payment is standard and qualifies for competitive rates. A 20%+ down payment often unlocks the best rates and terms, potentially reducing APR by 1-3 percentage points. Down payments also lower your monthly payment amount and total interest paid over the loan term. However, weigh rate savings against preserving working capital—sometimes paying a slightly higher rate to maintain cash reserves makes better business sense.

Are SBA equipment loan rates lower than conventional rates?

Yes, SBA equipment loans typically offer lower rates than conventional financing. SBA 7(a) loans for equipment range from Prime + 2.25% to Prime + 2.75% (currently around 9.5-11% APR) with terms up to 10 years or equipment useful life. SBA 504 loans offer even lower rates (approximately 5-7% APR) for major equipment purchases over $50,000 combined with real estate. The SBA guarantee reduces lender risk, enabling better rates. However, SBA loans require more documentation, longer approval times (3-8 weeks), and stricter eligibility requirements. For borrowers who qualify, SBA loans offer significant rate savings over conventional and online options.

How do online lender equipment rates compare to bank rates?

Bank equipment loans offer the lowest rates (typically 6-12% APR) but have strict requirements: credit scores of 680+, 2+ years in business, strong financials, and approval times of 2-4 weeks. Online lenders charge higher rates (8-25% APR) but provide significant advantages: faster approval (24 hours to 1 week), lower credit requirements (550+ with some lenders), less documentation, and more flexible terms. Alternative and fintech lenders may charge 15-30% APR but approve businesses banks reject. For well-qualified borrowers with time, banks offer the best rates. For speed, flexibility, or credit challenges, online lenders provide accessible options at moderately higher costs.

What is the best time to get equipment financing for the lowest rates?

Timing can impact equipment loan rates and terms. Best times include: end of quarter or year-end when lenders push to meet volume goals and may offer rate incentives; when manufacturers run promotional financing (often 0% or reduced APR) on new models or excess inventory; during economic periods of lower interest rates (rates are currently elevated but may decrease); when your business financials are strongest (after a profitable quarter/year). Also consider: applying after improving your credit score; when you have multiple financing quotes for negotiation leverage; and avoiding urgent situations where you have no time to shop rates. Planning equipment purchases 30-60 days ahead allows time to secure optimal financing.

Current Equipment Loan Rates: What to Expect & How to Negotiate Better Terms

Is your business ready for that new piece of machinery, but you’re dreading the finance office negotiation? The difference between a great equipment loan rate and an average one isn’t 1% or 2%—it’s thousands of dollars in profit.

Equipment loan rates currently range wildly from 4% to 45% APR depending on your credit profile, time in business, and lender type. We’ll show you exactly what to expect in today’s market, giving you the specific benchmarks and expert negotiation tactics that ensure your business secures financing at the lowest possible end of that spectrum.

Key Takeaways

Current market rates: Equipment loan interest rates in 2024–2025 typically range from 4%–15% for conventional bank loans and 8%–45% APR for alternative lenders, with the average falling between 7%–12% for qualified borrowers.
Credit score impact: A business credit score above 680 and personal credit above 700 can unlock equipment loan rates 5–10 percentage points lower than subprime borrowers receive.
Loan vs. lease decision: Equipment loans offer ownership and tax benefits through depreciation, while leases provide flexibility—the better choice depends on equipment lifespan and cash flow needs.
Negotiation leverage: Businesses with strong financials, substantial down payments (20%+), and multiple lender quotes can often negotiate equipment loan rates 1–3 percentage points below initial offers.
SBA advantage: SBA 504 and 7(a) loans offer some of the lowest equipment financing rates available (currently around 5.5%–8%), though they require more documentation and longer approval timelines.

What Are Current Equipment Loan Rates in 2024–2025?

Knowing the latest rates for equipment loans will help you set reasonable goals and spot a good deal when you see one. The market for financing equipment is still very competitive, and rates vary a lot depending on the type of lender and the type of business you run.

Equipment Loan Rates by Lender Type

Lender Type	Typical APR Range	Best For
Traditional Banks	4%–10%	Established businesses with strong credit
SBA Loans	5.5%–8%	Long-term financing, larger purchases
Online Lenders	8%–30%	Fast funding, moderate credit
Equipment Dealers	6%–18%	Specific manufacturer financing
Alternative Lenders	15%–45%	Startups, challenged credit

Traditional banks offer the lowest equipment loan rates but demand strong credit profiles and established business history. If you have a 700+ credit score and two years of profitable operations, banks should be your first stop.

SBA-backed loans currently provide highly competitive fixed rates, generally in the 5.5%–8% range for equipment financing. These government-guaranteed programs reduce lender risk, which translates directly into lower rates for qualified borrowers. You’ll need to provide extensive documentation and wait 45-90 days for approval.

Online lenders bridge the gap between bank rates and accessibility. They approve loans faster (often within 24-72 hours) and work with businesses that don’t meet traditional bank criteria. You’ll pay more for this convenience—rates typically fall between 8%–30%—but for businesses that need equipment quickly or have credit challenges, online lenders provide valuable options.

Compare rates and terms by exploring our equipment financing options.

How Do Lenders Determine Your Equipment Financing Rates?

Lenders use multiple factors to assess risk and price equipment loan rates accordingly:

Credit score (business and personal) – Your credit history is the single biggest factor. Lenders pull both personal and business credit reports.
Time in business (2+ years preferred) – Established businesses get better rates than startups because they have proven track records.
Annual revenue and cash flow – Lenders want to see that you generate enough income to comfortably make loan payments.
Equipment type and useful life – Equipment that holds value and has long useful life qualifies for better rates.
Down payment amount – Larger down payments (20%+) reduce lender risk and typically lower your rate by 1-2 percentage points.
Industry risk classification – Some industries (construction, transportation) are viewed as higher risk and may face slightly higher rates.

How Do I Qualify for Low Equipment Loan Rates?

Qualifying for the best equipment loans rates requires preparation. The businesses that secure bottom-tier pricing share common characteristics that lenders reward with better terms.

Ideal Borrower Profile for Best Rates

Credit Score: 680+ business / 700+ personal
Time in Business: 2+ years
Annual Revenue: $250,000+
Debt-to-Income Ratio: Below 40%
Down Payment: 10%–20% available

If your profile doesn’t match these benchmarks, don’t worry. You can still get financed—you’ll just pay higher rates. The gap between “ideal” rates (6-8%) and “acceptable” rates (12-18%) is significant but manageable for most businesses.

Improve your credit before applying. If your score is below 680, spend 3-6 months working on it before you apply for equipment financing. Pay down credit card balances below 30% utilization, correct any errors on your credit reports, and make all payments on time. Every 50-point improvement in your credit score can reduce your rate by 1-2 percentage points.

Build your down payment fund. Even if a lender offers 100% financing, having 15-20% down payment available gives you negotiating power. Lenders view larger down payments as proof of commitment and financial stability. When you put $20,000 down instead of $10,000 on a $100,000 equipment purchase, you could reduce your rate enough to save roughly $2,800 over a five-year term.

Document your financials thoroughly. Lenders reward borrowers who make their job easy. Have your tax returns, financial statements, and bank statements organized and ready before you apply. Quick, complete responses to documentation requests signal that you’re a professional borrower who manages their business well. If you’d like help preparing your application, schedule a 10-minute call with a funding specialist to review your options.

What Terms Are Typical for Equipment Loans?

Understanding standard terms helps you evaluate whether an offer is reasonable or if you should keep shopping.

Typical equipment loan term lengths are three to seven years, though longer terms may be available depending on the equipment’s useful life. Heavy machinery with a 10-year lifespan might qualify for 7-year financing, while technology equipment that becomes obsolete quickly typically maxes out at 3-year terms.

Loan amounts range between $5,000 and $5 million+ depending on the equipment and your business size. Most lenders have minimum loan amounts ($5,000-$10,000) because smaller loans aren’t cost-effective for them to underwrite.

Funding speed varies dramatically by lender type. Online lenders can fund same-day to within a week. Traditional banks take 2-4 weeks. SBA loans require 45-90 days from application to funding.

Collateral requirements are straightforward—the equipment you’re purchasing serves as collateral. This makes equipment financing easier to obtain than unsecured business loans because the lender can repossess and resell the equipment if you default.

Most lenders require a down payment, typically ranging between 0% and 30% of the purchase price, with a larger down payment generally leading to better equipment loan rates.

Prepayment penalties vary by lender. Many banks include prepayment penalties in the first 1-3 years to protect their interest income. Online lenders often skip prepayment penalties entirely. Always ask about this before signing—you should know if paying off the loan early will cost you extra.

What’s the Difference Between Fixed and Variable Equipment Loan Rates?

Choosing between fixed and variable equipment loan rates significantly impacts your payment predictability and total cost. Each structure suits different business situations.

Factor	Fixed Rate	Variable Rate
Monthly Payment	Consistent throughout term	Fluctuates with market rates
Initial Rate	Usually 0.5-1% higher	Often lower starting point
Rate Risk	Protected from increases	Exposed to market changes
Best When	Rates are low or rising	Rates are high or falling
Budgeting	Easier to plan	Requires flexibility
Total Cost	Predictable from day one	Depends on rate movements

Fixed-rate equipment loans lock in your rate for the entire term. Your payment never changes, which makes budgeting straightforward. If you’re financing equipment in a low-rate environment or if rates are expected to rise, fixed rates protect you against payment increases. Fixed rates typically start 0.5-1 percentage point higher than comparable variable rates.

Variable-rate equipment loans tie your rate to an underlying index (usually prime rate). When the index moves up or down, your rate adjusts accordingly—typically quarterly or annually. Variable rates often start lower than fixed rates, which can save you money in the short term. If rates rise significantly, though, your payment can increase substantially. A 2% rate increase on a $100,000 loan adds roughly $170 monthly to your payment.

For most businesses, fixed-rate equipment financing makes more sense. The payment predictability outweighs the slightly higher initial rate, and you’re protected if market rates increase during your loan term. If you need flexible access to capital beyond equipment purchases, our working capital loans can cover operational expenses.

Are Equipment Loans Better Than Leases?

The loan-versus-lease decision depends on your specific situation, but understanding the trade-offs helps you make the right choice for your business.

Equipment Loan Advantages

Build equity and ownership – Every payment builds your ownership stake. When the loan is paid off, you own the equipment outright.
Section 179 tax deduction – You can deduct the full purchase price (up to $1.16 million in 2024) in the year you buy the equipment.
No usage restrictions – Loan-financed equipment carries no mileage limits, hour restrictions, or usage penalties.
Asset on balance sheet – Owned equipment strengthens your balance sheet and can serve as collateral for future financing.
Often lower total cost – Loans typically cost less over the equipment’s life when you compare interest rates to lease payments.

Equipment Lease Advantages

Lower upfront costs – Leases typically require little to no down payment, which preserves your cash for other needs.
Easier upgrades – When the lease ends, you can upgrade to newer equipment without worrying about selling or trading in.
Off-balance-sheet financing – Operating leases don’t appear as debt on your balance sheet (though this changed somewhat with new accounting standards).
Built-in maintenance options – Some leases include maintenance packages, which reduces your operational burden.
Better for rapidly depreciating tech – If equipment becomes obsolete quickly (computers, software, certain medical devices), leasing avoids ownership of outdated assets.

Equipment loans make more sense for most businesses buying equipment with long useful lives (5+ years). You’ll pay less total and build equity. Leases work better for technology that needs frequent upgrading or if you have severe cash constraints. See how different equipment financing structures might work for your specific situation.

Where Can I Find the Best Rates for Business Equipment Loans?

Finding the best equipment loan rates requires knowing where to look and understanding which lender types serve different business profiles.

Where to Find the Best Equipment Loans Rates

Lender Type	Rate Range	Approval Speed	Credit Requirement	Key Advantage
Traditional Banks	4-10%	2-4 weeks	700+	Lowest rates, relationship benefits
Credit Unions	5-11%	1-3 weeks	680+	Competitive rates, personal service
SBA-Approved Lenders	6.28-9.75%	6-12 weeks	680+	Government-backed, excellent terms
Online Lenders	8-30%	24-72 hours	600+	Fast approval, flexible credit
Equipment Manufacturers	0-18%	1-2 weeks	Varies	Promotional rates, dealer incentives
Specialty Finance Companies	7-20%	3-7 days	620+	Equipment expertise, flexible underwriting

Always obtain quotes from at least 3-5 lenders before committing. Rate differences of even 2% can save thousands over the loan term. When you’re borrowing $100,000 at 10% over five years, you’ll pay $27,480 in interest. Drop that rate to 8%, and you’ll pay $21,645—a savings of $5,835 simply by shopping around. Our small business solutions include equipment financing and working capital options to give you comprehensive choices.

Are SBA Equipment Loans Available?

Yes—and SBA equipment loans currently offer some of the best equipment loan rates in the market. Two programs dominate equipment financing: SBA 7(a) and SBA 504.

SBA Equipment Financing Options

Program	Max Amount	Current Rates	Terms	Best For
SBA 7(a) Loans	$5 million	Prime rate (7.00%) + 2.25%–2.75% = approximately 9.25%–9.75%	Up to 10 years for equipment	General-purpose equipment across all industries
SBA 504 Loans	$5.5 million (up to $16.5 million for special projects)	Fixed rates approximately 5.5%–8%	10 or 20 years depending on equipment type	Large equipment purchases, especially when combined with real estate

The SBA 504 program structures loans differently than conventional financing. You’ll work with two lenders: a conventional bank provides 50% of the project cost, a Certified Development Company (CDC) provides 40% backed by the SBA, and you contribute 10% down payment. This structure delivers exceptionally low rates because the SBA guarantee reduces risk for both lenders.

Who qualifies for SBA equipment loans? You need to operate a for-profit business in the United States, meet SBA size standards for your industry, demonstrate ability to repay, and have reasonable owner equity invested. Credit score requirements are typically 680+ for business credit and 680+ for personal credit, though individual lenders may have slightly different thresholds.

SBA loans require extensive documentation—three years of business and personal tax returns, detailed financial statements, business plans for newer businesses, personal financial statements, and more.

The approval process takes 45-90 days compared to days or weeks for conventional equipment loans. For many businesses, the significantly lower equipment loan rates justify the additional paperwork and wait time. If you’re considering longer-term financing with favorable rates, our long-term business loans include SBA options.

How to Lock in a Low Rate on Equipment Loans for Your Business

Securing the best possible equipment loans rates requires strategy and preparation. These tactics help you position yourself for lender approval at the lowest available rates:

Improve credit scores before applying (check 3-6 months ahead)

Don’t wait until you need equipment to check your credit. Pull your business and personal credit reports quarterly. If you see your score trending down or spot errors, you have time to fix issues before you apply. Even small improvements (20-30 points) can reduce your rate by half a percentage point.

Prepare comprehensive financial documentation

Lenders reward borrowers who make underwriting easy. Organize your tax returns, profit and loss statements, balance sheets, and bank statements before you start shopping. Having everything ready shows you’re a professional operator and speeds up approval—which can be critical when you’re trying to take advantage of promotional equipment loans rates.

Offer a larger down payment (15-25%)

Down payments directly impact your rate. If you can comfortably put 20% down instead of 10%, most lenders will reduce your rate by 0.5-1.5 percentage points. On a $100,000 equipment purchase at 10% for five years, dropping your rate from 10% to 8.5% saves you roughly $2,800 in interest—far more than the opportunity cost of the additional $10,000 down payment.

Choose equipment with strong resale value

Lenders assess equipment collateral value when pricing loans. Equipment that holds value and has an active secondary market (construction equipment, commercial trucks, medical devices) qualifies for better rates than equipment that depreciates rapidly or has limited resale appeal.

Time your purchase during promotional periods

Many lenders run promotional equipment loans rates during specific periods—end of quarter, end of fiscal year, or seasonal slow periods. Equipment manufacturers also offer financing incentives tied to product launches or inventory management. Ask dealers and lenders about upcoming promotions before you commit to immediate purchase.

Consider shorter loan terms for rate reduction

Lenders price shorter-term loans at lower rates because their risk exposure is shorter. If your cash flow supports it, a 3-year loan will carry a lower rate than a 5-year loan on the same equipment. Run the numbers—sometimes the lower rate on a shorter term results in similar monthly payments to a longer term at a higher rate.

Build banking relationships before you need financing

Banks offer better rates to existing customers. Open your business checking and savings accounts at banks that offer equipment financing. Maintain good account history for 6-12 months before applying for equipment loans. Many banks offer “relationship pricing”—rate discounts of 0.25-0.5% for customers who maintain deposits or other services. To discuss strategies for securing the best equipment loan rates for your specific situation, schedule a consultation with our team.

How to Find Competitive Rates on Equipment Loans for New Purchases

Finding competitive equipment loan rates requires comparison shopping, strategic timing, and knowing where to look beyond obvious sources. Getting a pre-approval from multiple lenders and thoroughly documenting your business’s strong financial health are key strategies that strengthen your position in negotiations.

Rate Comparison Strategies

Shop and Compare: The single most effective strategy is to compare offers from multiple lenders because different institutions have varying terms, rates, and criteria. You can use competing offers as leverage to negotiate better terms with your preferred lender.
Use Calculators: Use equipment loan calculators to compare the total interest paid over the life of the loan, not just the monthly payment. This helps you avoid long terms with lower monthly payments but higher overall costs.
Leverage Pre-Approval: Get pre-approved with 2–3 lenders before you shop for equipment. Knowing your approved rate and terms strengthens your negotiating position with both dealers and lenders.

Investigate Promotional Financing

Major equipment manufacturers often offer financing that can beat rates from banks, especially on new equipment.

Manufacturer Incentive Programs: Major equipment manufacturers and their captive finance divisions run limited-time promotions to stimulate sales. These promotions can include 0% financing for extended terms (e.g., 60 to 84 months) or cash rebates.
Vendor Financing Pros and Cons: While manufacturer financing offers convenience and great deals on new equipment, it may not be available for used or specialized equipment, and the terms (such as covering installation costs) may be less flexible than bank loans.

Time Purchases Strategically

Equipment loan rates and promotional offers often follow predictable business patterns that you can leverage:

End of Quarter/Year-End: Lenders push to hit volume targets at the end of the quarter (March, June, September, December), and manufacturers want to move inventory before model changes at year-end (November–December). This is when rate concessions or special deals are most likely.
Trade Shows: Manufacturers often offer special financing incentives to buyers who commit at major industry trade shows.

How Do Equipment Loan Rates Compare to Personal Loans?

Understanding the difference between equipment loans rates and personal loan rates helps you choose the right financing vehicle for business equipment purchases.

Factor	Equipment Loan	Personal Loan
Typical APR	4%–30%	8%–36%
Collateral	Equipment secured	Usually unsecured
Loan Amounts	$5K–$5M+	$1K–$100K
Tax Benefits	Business deductions	Limited
Approval Factors	Business financials	Personal credit only
Best Use Case	Specific equipment	Flexible use
Documentation	Business + personal	Personal only
Term Length	1-7 years (matches equipment life)	1-7 years

Equipment loans typically offer lower rates than personal loans because the equipment serves as collateral. If you default, the lender can repossess and sell the equipment to recover their money. This collateral reduces risk, which translates to lower equipment loans rates—often 2-5 percentage points below comparable personal loan rates.

Tax treatment differs significantly. Equipment loan interest is tax-deductible as a business expense. You can also depreciate the equipment or take advantage of Section 179 deductions. Personal loan interest generally isn’t tax-deductible unless used for very specific purposes.

Approval criteria favor equipment loans for business owners. Personal loans evaluate only your personal credit and income. Equipment loans consider your business revenue, cash flow, and overall financial health—which may work in your favor if your business is stronger than your personal finances.

Almost always use equipment loans rather than personal loans for business equipment purchases. You’ll pay less in interest, get better tax treatment, and separate business and personal finances appropriately. A business line of credit provides ongoing access to capital for various business needs beyond equipment purchases.

Which Lenders Offer the Lowest Equipment Loan Interest Rates?

Lender type determines your rate range more than any other single factor. Here’s where to find the best equipment loan rates based on your business profile:

Lowest Rates (4%–8%):

Major National Banks for customers with 700+ credit
SBA 504 lenders for qualifying projects
Credit unions for members with strong credit
Equipment manufacturer captive finance during promotional periods

Competitive Rates (7%–15%):

Regional banks
Established Online Lending Platforms
National Equipment Finance Companies
SBA 7(a) lenders

Accessible Rates (12%–30%):

Fintech lenders for moderate credit
Online platforms for faster approval
Specialty equipment finance companies for unique collateral

Higher Rates (25%–45%):

Alternative lenders for challenged credit
Merchant cash advance companies (avoid these)
Short-term lenders for immediate needs

Strategy: Start at the top of this list and work down. Apply to banks and credit unions first if you have strong credit. If you’re declined or offered unfavorable rates, move to regional banks and equipment finance companies. Use alternative lenders only if traditional sources don’t work out.

Compare Equipment Financing Rates for Small and Medium Businesses

Equipment loans rates vary by business size because lenders assess risk differently for smaller versus larger companies.

Rate Expectations by Business Size

Small Business (Under $1M Revenue):

Bank rates: 8%–12%
Online lenders: 12%–25%
Focus on: Building credit, establishing banking relationships, choosing equipment with strong resale value

Small businesses typically pay higher equipment loans rates because they’re viewed as higher risk. You have less financial cushion to handle unexpected problems, and you may lack the operating history that makes lenders comfortable. Offset this by maintaining excellent credit, offering larger down payments, and documenting stable revenue growth.

Medium Business ($1M–$10M Revenue):

Bank rates: 5%–10%
Online lenders: 8%–18%
Focus on: Negotiating terms, securing volume discounts, leveraging banking relationships

Medium-sized businesses access better equipment loans rates because they have proven their business model works. You’ve weathered economic cycles, built a customer base, and demonstrated the ability to manage growth. Use your stronger position to negotiate—rates, terms, prepayment penalties, and fees are all negotiable when you’re a valued customer.

The gap matters: A small business paying 12% on $100,000 of equipment over five years will pay $33,740 in interest. A medium business paying 8% on the same loan will pay $21,645—a difference of $12,095. As your business grows and your credit strengthens, actively refinance existing equipment loans to capture lower rates.

Planning to expand your business? Explore business expansion loans for growth capital beyond equipment purchases.

What Are the Best Equipment Loan Rates for Business Owners Right Now?

Current market conditions determine available equipment loans rates. Here’s where rates stand in 2024-2025:

Current Rate Snapshot

Factor	Current Data & Range	Details
Prime Rate	7.00% (As of December 2025)	This serves as the foundation for variable rate loans and SBA 7(a) maximums.
Best Bank Rates	8.00%–10.00% (Prime + 1%–3%)	Typical range for highly qualified borrowers (700+ credit, 2+ years in business).
SBA 504 Rates	Fixed rates approximately 5.5%–8%	This range is used for long-term (10- or 20-year) fixed-rate equipment financing.
Online Lender Average	12%–18%	Average rate for qualified borrowers with good credit seeking speed and accessibility.

Market Trends & Strategy

Market Trend: Rates remain elevated compared to the 2020-2021 period but have stabilized after increases in 2022-2023. Most economists expect rates to remain in this range through 2025 with potential modest decreases in late 2025.
Current equipment loan rates are higher than the historically low rates of 2020-2021 but remain reasonable compared to long-term averages.
If you need equipment now, don’t wait for rates to drop—the cost of not having productive equipment often exceeds the cost of slightly higher interest rates.
Lock in fixed rates for payment predictability. With rate uncertainty, fixed-rate equipment financing protects you against potential increases. Variable rates might start lower but carry risk if rates rise during your loan term. For shorter-term financing options with different structures, consider our short-term business loans.

Negotiating Better Equipment Loan Terms: Expert Strategies

Negotiation is expected in equipment financing. Lenders build margin into initial quotes specifically because they anticipate borrowers will negotiate. Use these leverage points to secure better equipment loan rates and terms:

Negotiation Leverage Points

Multiple competing offers in hand – Nothing motivates a lender like knowing they’re competing for your business. Get written quotes from 3-5 lenders, then use the best offer as leverage with others. “Bank A offered me 8.5%—can you match or beat that?” is perfectly acceptable.
Strong cash reserves demonstrated – Lenders feel more comfortable with borrowers who have financial cushion. If you can show 6-12 months of operating expenses in cash reserves beyond your down payment, you have leverage to negotiate lower equipment loan rates because you’re clearly a lower-risk borrower.
Long-term customer relationship – Banks reward loyalty. If you’ve maintained business accounts, credit cards, or previous loans with a bank for years, remind them of your relationship history. Ask specifically about “relationship pricing” or customer loyalty discounts.
Bundled services – Banks make money from multiple services—checking accounts, credit cards, payroll processing, merchant services. Offer to move additional services to a lender in exchange for better equipment loan rates. This works particularly well with regional banks and credit unions.
Willingness to provide additional collateral – If you have unencumbered assets (real estate, other equipment, inventory), offering additional collateral can reduce your rate. The lender’s risk decreases when they have more security behind the loan.
Flexibility on loan term length – Sometimes lenders have targets for specific loan terms. Express willingness to adjust your term length (within reason) if it results in better pricing. A 4-year term at 7.5% might cost less total than a 5-year term at 9%.

Never accept the first offer. Lenders expect negotiation and build margin into initial quotes. Even saying “Is that your best rate?” often results in an improved offer. For loans above $50,000, you should expect to negotiate and save 0.5-1.5 percentage points through effective negotiating. To develop your equipment financing strategy and negotiation approach, schedule a consultation with a funding specialist.

Securing the Best Equipment Loan Rates

The difference between a great equipment loan rate and an average one can mean thousands of dollars in savings over your loan term. Your success in securing the best pricing hinges on two things: preparation and negotiation.

By understanding your ideal borrower profile, gathering all financial documentation early, and leveraging competitive quotes, you put yourself in the strongest negotiating position possible. Never accept the first offer, as lenders expect you to negotiate for better rates and terms.

Whether you pursue the low rates of an SBA program or the speed of an online lender, the best strategy is always starting the process early to avoid scrambling at the last minute.

Visit our equipment financing page to compare rates and terms, or schedule a free consultation to discuss your specific equipment needs.

Frequently Asked Questions

What are current equipment loan rates?

Equipment loan rates currently range from 4% to 45% APR, with most qualified borrowers securing rates between 7% and 15%.

How do I qualify for low equipment loan rates?

Maintain a credit score above 680, demonstrate 2+ years in business, show strong annual revenue, and offer a down payment of 10%–20%.

Are equipment loans better than leases?

Equipment loans are better when you want ownership and tax benefits through depreciation, while leases offer more flexibility for frequently upgraded technology.

What is the average interest rate for equipment loans?

Interest rates for equipment loans are usually between 7% and 20% for a wide range of borrowers, with the average for highly qualified borrowers falling between 8% and 12% APR.

How does credit score affect equipment financing rates?

A credit score above 700 can reduce your equipment loan rate by 5–10 percentage points compared to rates offered to borrowers with scores below 600.

Where can I find the best rates for business equipment loans?

The best equipment loan rates are typically found at traditional banks, credit unions, and SBA-approved lenders for borrowers with strong credit profiles.

What terms are typical for equipment loans?

Typical equipment loan terms range between 1 and 7 years, with loan amounts between $5,000 and $5 million and the equipment serving as collateral.

What’s the difference between fixed and variable equipment loan rates?

Fixed rates remain constant throughout the loan term for predictable payments, while variable rates fluctuate with market conditions and may start lower but carry risk.

Are SBA equipment loans available?

Yes, SBA 7(a) and SBA 504 loans are available for equipment financing, with the 504 program offering long-term, fixed rates that are pegged to an increment above the 10-year U.S. Treasury issues, generally falling in the 5.5%–8% range.

How do equipment loan rates compare to personal loans?

Equipment loans typically offer lower rates (4%–30%) than personal loans (8%–36%) because the equipment serves as collateral, reducing lender risk.