> Marketplace disclaimer: Loanable is a commercial funding marketplace, not a lender. Funding partners underwrite applications and set their own requirements, rates, and terms. Loanable doesn't publish a single credit, revenue, or time-in-business cutoff. Any numbers on this page are labeled examples, not quotes, offers, or Loanable criteria. This article is educational, not tax or legal advice.
By the Loanable Editorial Team · Marketplace editorial · Updated October 2026
Equipment financing requirements are the checks a lender runs before it funds a machine, vehicle, or piece of gear for your business. The good news: equipment financing is often easier to qualify for than other business loans, because the equipment itself backs the deal. This guide covers what lenders look at, how startups can still qualify, what documents to gather, and what to do if you're not there yet. If you want the basics of how a deal is structured, read how equipment financing works first. To see options, visit our equipment financing page.
Equipment financing requirements at a glance
Every lender sets its own rules. These are the six things nearly all of them look at:
- Personal credit: Your score and history, plus any recent late payments, liens, or bankruptcies.
- Business credit: Your business's payment history with suppliers and lenders, if it has one.
- Time in business: How long you've been operating. Newer businesses can qualify, but often with more conditions.
- Revenue and cash flow: Whether your bank deposits can cover the new payment.
- Down payment: Some deals need money down. Others finance the full cost.
- The equipment: Its type, age, condition, and resale value.
Criteria vary a lot by lender and deal size. Loanable's equipment financing partners each set their own cutoffs, so meeting one lender's bar doesn't guarantee another's.
Why equipment financing is easier to qualify for
With most loans, the lender is betting on you alone. With equipment financing, it also has the asset. If you stop paying, the lender can take back the equipment and sell it. That lowers its risk.
Because of that, lenders focus on two questions:
- Can this business make the payment? That's about your credit and cash flow.
- What is the equipment worth over time? That's about resale value and useful life.
A truck or excavator that holds its value is easier to finance than custom software or a one-of-a-kind machine. The stronger the asset, the more room a lender has to work with a thinner credit file.
Credit score
Your personal credit is usually the first thing a lender checks, especially for smaller deals. There's no universal minimum. Each lender sets its own score bands.
What tends to matter most:
- Your score band. Higher scores usually mean more lenders, better terms, and less paperwork.
- Recent late payments. A late payment last month weighs more than one from years ago.
- Derogatory marks. Open tax liens, judgments, collections, and recent bankruptcies can stop a deal or change its terms.
- Credit use. Maxed-out cards can signal cash strain.
- Business credit. If your business has trade lines, on-time supplier payments help.
If your credit is bruised, you still have options. A larger down payment, a strong asset, or a co-signer can help. See bad credit business funding for more.
Time in business and revenue
Lenders like a track record. A business with a few years of steady deposits has proven it can pay its bills. A brand-new business hasn't yet.
Lenders typically review:
- How long you've been open, based on your formation date and bank history.
- Monthly deposits in your business bank statements.
- Average daily balances, to see if cash runs thin.
- Overdrafts and returned payments, which can be a red flag.
- Existing debt payments, to see how much room you have for a new one.
How a startup can still qualify
Startups do get equipment financing. It usually takes one or more of these:
- A larger down payment, so the lender has less at risk.
- Strong personal credit, since there's no business history yet.
- A guarantor or co-signer with solid credit.
- Industry experience, such as years working in the trade before opening.
- Vendor financing, where the equipment seller or maker offers its own program.
- An SBA option. SBA 7(a) loans, which go up to $5 million, and 504 loans can both be used for equipment. Our guide to SBA loans for equipment covers the details.
Down payment, collateral, and personal guarantees
Down payment
Some lenders finance 100% of the equipment cost. Others ask for money down, especially for startups, used gear, or weaker credit. The amount is set by the lender and the deal. Ask early, so it doesn't surprise you at closing.
Here is an illustrative example with round, made-up numbers. On a $50,000 machine, a 10% down payment would mean $5,000 up front and $45,000 financed. A lender that asks for more down usually does so to offset risk somewhere else in the file.
Collateral and liens
In most deals, the equipment is the collateral. The lender files a UCC-1 financing statement, a public notice of its interest in the asset. Under UCC Article 9, a financing statement names the debtor, the secured party, and the collateral.
Watch the collateral description:
- Specific lien: Covers only the financed equipment. This is common and leaves your other assets free.
- Blanket lien: Covers all business assets. It can make future borrowing harder. Ask whether the lien can be limited to the equipment.
Personal guarantee
Most small business equipment deals ask the owner to sign a personal guarantee. That means you're personally on the hook if the business can't pay. It's standard, but read what it covers before you sign.
The equipment matters too
Lenders don't just underwrite you. They underwrite the asset. Here's what they look at:
- New vs used. New equipment is usually the easiest to finance. Used gear can be financed too, but lenders may limit its age or ask for an inspection or appraisal.
- Titled vs non-titled. Trucks and trailers have titles, and the lender is usually listed on the title. Machines, ovens, and medical devices don't, so the UCC filing does that job.
- Resale value. Common, in-demand equipment is easier to finance than niche gear.
- Useful life. Lenders usually prefer the term to end before the equipment wears out.
- Soft costs. Shipping, installation, training, and software are sometimes included. Ask how much of the total the lender will cover.
- Private-party sales. Buying from another business instead of a dealer is possible, but expect more checks on title, condition, and price.
Have a written vendor quote or invoice ready. It should list the make, model, year, serial number or VIN, and price.
Requirements by deal size
Paperwork usually grows with the size of the deal. Lenders set their own dollar thresholds, so treat this as a general pattern, not a rule.
- Smaller deals (application-only): Often decided mainly on personal credit, time in business, and a short application. Some lenders ask for a few months of bank statements.
- Larger deals (full documentation): Expect business tax returns, financial statements, a debt schedule, and sometimes a personal financial statement.
- Very large or specialized deals: May need an appraisal, a detailed business plan, or a review of how the equipment will earn its keep.
Healthcare, construction, and restaurant equipment often have their own lender programs. See our pages for healthcare, construction, and restaurants.
Documents checklist
Gather these before you apply to speed things up:
- A completed application with business and owner details
- A vendor quote or invoice with make, model, serial number or VIN, and price
- Recent business bank statements, often the last several months
- Business and personal tax returns, for larger deals
- Financial statements, such as a profit and loss statement and balance sheet, for larger deals
- Formation documents and your EIN
- Government-issued ID for each owner
- A certificate of insurance naming the lender as loss payee, usually required before funding
- A list of current business debts and payments
If you don't qualify yet
A "no" today doesn't have to be a "no" next quarter. Try these fixes:
- Clean up your credit. Pay down card balances, fix report errors, and stay current for a few months.
- Build cash flow history. Run all revenue through one business account so deposits are easy to see.
- Offer a larger down payment. Less financed means less risk for the lender.
- Choose a stronger asset. Newer or more common equipment can open more doors.
- Consider a lease. Some leases are easier to get than loans. See equipment lease vs loan.
You might also look at SBA loans or a term loan if you have time and a strong file.
A note on taxes
Many owners ask about Section 179, which can let a business deduct the cost of qualifying equipment. The rules and limits change, so read IRS Publication 946 and talk with a tax professional. Tax treatment should never be the only reason to buy.
Industry context
Equipment finance is a large part of how U.S. businesses buy the tools they need. The Equipment Leasing & Finance Foundation publishes research on the industry if you want the bigger picture.
How Loanable helps
Loanable is a marketplace, not a lender. With one application, you can be matched with options from 150+ funding partners, including equipment finance lenders, banks, and SBA lenders. Each partner sets its own requirements, so one application can reach lenders with different credit and time-in-business bars. Learn more on how it works, or estimate a payment with our loan calculators. We can't promise approval, but we can help you compare real offers.
Frequently asked questions
What credit score do you need for equipment financing?
There's no single minimum. Each lender sets its own score bands. Higher scores usually open more options and better terms. A strong asset or a larger down payment can help offset a lower score.
Can a startup get equipment financing?
Yes. Startups often qualify with strong personal credit, a larger down payment, a guarantor, or industry experience. Vendor programs and SBA loans are other paths.
Do you need a down payment for equipment financing?
Not always. Some lenders finance the full cost. Others ask for money down, especially for startups, used equipment, or weaker credit.
Can you finance used equipment?
Yes. Many lenders finance used equipment, though some limit its age or ask for an inspection or appraisal. Common equipment with good resale value is easiest to finance.
Does equipment financing require a personal guarantee?
Usually, for small businesses. The owner signs a guarantee and is personally responsible if the business can't pay. Read what the guarantee covers before you sign.
How fast is equipment financing approval?
It depends on the lender and deal size. Smaller, application-only deals can move quickly. Larger deals that need tax returns and financial statements take longer. Having your documents ready is the best way to speed things up.
Check your options
Know the requirements, gather your documents, and get a vendor quote. When you're ready, apply once to see what Loanable's funding partners can offer.