Equipment Financing for Startups: What a New Business Can Get and How to Qualify
The equipment secures the financing, so a young business can often qualify before an unsecured loan.
Soft credit pull only, no obligation
Rates, factor rates, fees and terms are set by the funding provider that makes your offer and are disclosed in that provider's agreement. Figures on this page are illustrative ranges from providers in our network, not offers. How equipment financing works in general is on the main page; this one covers a business still young.
- Same-day decisions
- from some providers
- Subject to provider approval and document turnaround.
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At a glance
| Amount considered | up to $500K on the application alone; up to $5M with full documentation, depending on the funding provider |
|---|---|
| Speed | same-day decisions from some providers, subject to provider approval and document turnaround |
| Minimum time in business | 12 months, considered by some providers |
| Minimum monthly revenue | $15,000, considered by some providers |
| Credit considered from | 525, considered by some providers |
| Collateral | The financed equipment; a personal guarantee is commonly required |
| Cost expressed as | An interest rate or a fixed cost of funds; any fees are disclosed in the financing agreement |
| Down payment | Set by the provider; asked for more often on a short history |
|---|---|
| Tax | Section 179 or bonus depreciation may apply to financed equipment — consult your tax advisor |
No rate appears on this page: the provider that makes the offer sets it. Some providers consider applications at these minimums. Meeting a minimum does not guarantee an offer.
How equipment financing works for a new business
Definition
Equipment financing pays the vendor's invoice for one named asset, and that asset normally secures the financing.
The asset carries part of the decision a short file cannot.
Why can a young business often get it first?
The provider holds a lien on a machine with a serial number and a resale market.
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That moves weight off a short file: the same business may be declined for an unsecured term loan that week. A late-model truck reads better than specialized gear.
What still has to be true about the owner?
The asset carries part of the decision, not all of it.
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Personal credit is the main signal at first, and real deposits count more than a forecast. Business credit vs personal credit.
Why is the first offer often smaller?
A short file gives less to read, so the amount follows the deposits you have.
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Months of on-time payments show in the bank statements the next provider reads, which a forecast cannot do.
How much a new business can get
Read the network's figures, depending on the funding provider, as a ladder: a young business usually stands on the first rung.
The amount offered follows
- The invoice
- The equipment
- Your deposits
- The owner's credit
Which rung can a young file reach?
Application only
Up to $500K, on the application, bank statements and quote.
Full documentation
Up to $5M, on financial statements and tax returns a young business rarely has yet.
The practical ceiling is the invoice.
Two levers a young business controls
Put money down where you can.
End the payment before the machine wears out.
Decisions from some providers the same day, depending on the provider.
Subject to provider approval and document turnaround.
A worked example: money down or nothing down
A first-year landscaping company buys a truck. Two offers, one invoice.
Try an invoice
Illustrative example, not an offer. Providers set actual amounts, rates, down payments and schedules.
Offer A
10% down: less financed, priced lower
$1,422/mo
48 monthly payments
$68,256
repaid to the provider
- Invoice
- $60,000
- Paid by you at signing
- $6,000 down
Offer B
Nothing down: the whole invoice financed, priced higher
$1,670/mo
48 monthly payments
$80,160
repaid to the provider
- Invoice
- $60,000
- Paid by you at signing
- Nothing down
Neither offer wins on its own
A fits if the deposit leaves enough cash for the first slow month.
B fits if cash in the account matters more now than the total paid.
Test it against your own numbers
Take your lowest-deposit month, subtract every fixed cost, and see which payment still clears.
Who qualifies, and what a business with no trading history cannot get
| 12 mo | time in business |
|---|---|
| $15K | monthly revenue |
| 525 | credit score |
Plus three months of bank statements, a government ID and the vendor quote. With no revenue yet, most providers in our network will not finance it: the payment comes out of revenue.
Some providers consider applications at these minimums. Meeting a minimum does not guarantee an offer.
What strengthens a young file
The equipment counts nearly as much as the applicant.
The asset itself.
A recent model with a deep resale market.
Real deposits.
In a business account, with few negative days.
Money in the deal.
A down payment, where you can.
Owner's guarantee.
Commonly required by providers.
How to apply for equipment financing as a new business
Checking your options uses a soft credit pull only, so looking does not change your score.
What you'll send
- three months of bank statementsIf the business is younger, every month it has
- A government ID
- A quote naming the seller, the equipment and the price
Larger amounts add
- Financial statements
- Tax returns
Worth asking before you sign
How much is down? Who holds the title? Is payment history reported to business credit bureaus?
Get the quote, then apply once
about 5 minutesEverything waits on the quote.
Send your documents
Complete months, every page, no screenshots.
Compare the offers
same-day decisions from some providersA specialist walks through each offer:
- The amount
- Down payment
- The schedule
- The fees
- Early payoff
Sign, and the provider pays the vendor
The provider you choose makes the decision; its agreement governs the financing.
Depending on the funding provider, subject to provider approval and document turnaround.
When it is the right tool for a new business, and when it is not
It suits equipment that produces the revenue that pays for it.
| Ask yourself | Good use | Not for |
|---|---|---|
| Is there work for it now? |
|
|
Is there work for it now?
- A truck that lets you take the contract.
- Equipment ahead of the work: a fixed payment on a business still finding its footing.
Better fit elsewhere
- Cash for a gap that repeatsUse insteadBusiness line of credit for new businesseswhat is realistic before year two
- No revenue yetUse insteadSBA loansmicroloans through participating lenders
- The whole short listUse insteadStartup business financingevery route a young file can reach
Capital Gurus is not an SBA lender; SBA loans are made by SBA-participating lenders.
Compare with other equipment financing pages
This page covers a business still young. The others cover the product for any business and the lease route.
- Equipment financing overview
How it works, what it costs and who qualifies.
- Equipment leasing
Use the equipment while the leasing company holds title.
If your business works in one trade, see equipment financing for construction companies and contractors, equipment financing for landscaping companies and equipment financing for manufacturers.
Related financing
- business term loans
A fixed amount, repaid on a schedule you can put in the budget.
- SBA loans
Capital Gurus is not an SBA lender; SBA loans are made by SBA-participating lenders.
Equipment financing questions for new businesses
In short
Equipment financing for a startup pays the vendor for one named asset, which normally secures it, so a young business can often qualify for it before an unsecured loan. Providers in our network generally look for 12 months in business, depending on the funding provider. Some give same-day decisions, subject to provider approval and document turnaround.
Can a startup get equipment financing?
Sometimes, and more often than an unsecured term loan, because the equipment secures the financing. Providers in our network generally look for 12 months in business, $15,000 a month and credit from 525, depending on the funding provider. Below those gates, options and amounts shrink. Meeting a minimum does not guarantee an offer.
Can a business with no revenue get equipment financing?
Usually not from the providers in our network, because revenue is what the payment comes out of. A pre-revenue business is normally looking at the owner's personal credit, a vendor's own program, or an SBA microloan through a participating lender. Capital Gurus is not an SBA lender; SBA loans are made by SBA-participating lenders.
What credit score do startups need for equipment financing?
There is no single number. Some providers in our network consider credit from 525, depending on the funding provider, because the asset carries part of the risk. With a short history the owner's personal credit is read closely, so check it before you apply. Meeting a minimum does not guarantee an offer.
Do startups need a down payment for equipment financing?
Often, yes. A provider with no years of financial statements to read may ask the owner to put money in, and the amount is set by that provider. Some files are structured with nothing down and some are not. Any down payment is stated in the financing agreement before you sign.
Is a personal guarantee required?
Commonly, yes, and more often when the business history is short. It makes the owner personally responsible if the business does not pay. Some providers offer some products without one, but most require it. The financing agreement sets out what applies.
How fast can a new business get equipment financing?
Same-day decisions are available from some providers, and funding as fast as 6 hours in some cases, subject to provider approval and document turnaround. The vendor quote usually sets the pace: nothing moves until it names the equipment, the seller and the price.
Does equipment financing build business credit?
It can, but only if the provider reports payment history to the business credit bureaus, and not every provider does. Capital Gurus reports nothing: the provider that funds the transaction decides. Ask which bureaus it reports to before you sign.
Can a brand-new LLC get equipment financing?
The entity type is rarely what decides it; the age of the business and the owner's credit are. Providers fund LLCs, corporations and sole proprietors. An EIN on its own is not enough: the provider verifies the owner, reviews personal credit and reads the business bank statements.
Still have a question?
talk to a funding advisorPut the equipment to work: see which financing offers fit your young business.
about 5 minutes, soft credit pull only · talk to a funding advisor