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Best business loans for buying equipment in 2026
The best loan for buying equipment is an equipment loan, because the equipment itself is the collateral and the term matches how long it will be useful. A lease lowers the upfront cost for equipment you will replace, and SBA 504 offers the lowest rate on major, long-lived equipment. Avoid paying for equipment with short-term working capital.
By the WithFunded team · Published November 11, 2026 · Rates as of November 2026
The short list
- Best overall
- Equipment loan
- Best for equipment you will upgrade
- Equipment lease
- Best for major long-lived equipment
- SBA 504 loan
- Best when equipment is part of a bigger project
- SBA 7(a) loan
- Best for cash from equipment you already own
- Equipment sale-leaseback
The 5 best options, ranked
1. Equipment loan Best overall
You borrow against the asset, own it at the end, and repay over the years it earns. Approval is easier than for an unsecured loan of the same size.
Watch for: Older or highly specialized equipment gets shorter terms and higher rates. Equipment financing guide →
2. Equipment lease Best for equipment you will upgrade
Technology and vehicles that you replace on a cycle are often cheaper to lease, with less cash due at signing.
Watch for: On a fair-market-value lease you do not own the equipment unless you pay the buyout. Equipment financing guide →
3. SBA 504 loan Best for major long-lived equipment
For heavy machinery with a long useful life, the 504 program's CDC rate is typically the lowest available, in exchange for more paperwork.
Watch for: Only for fixed assets. It cannot fund payroll, inventory, or other working capital. SBA loan guide →
4. SBA 7(a) loan Best when equipment is part of a bigger project
A 7(a) loan can combine equipment with working capital and improvements in one loan.
Watch for: Heavy documentation, and the timeline rules it out for anything urgent. SBA loan guide →
5. Equipment sale-leaseback Best for cash from equipment you already own
If you need working capital and own equipment outright, a sale-leaseback raises cash against it.
Watch for: You turn an asset you own into a monthly payment, so the cash has to earn more than it costs. Equipment financing guide →
Side-by-side comparison
| Option | Verdict | Cost basis | Funding speed | Qualifies on |
|---|---|---|---|---|
| Equipment loan | Best overall | Representative 8%–30% APR, with the term matched to the equipment's useful life | Days to weeks | The equipment is the collateral, which can offset a thinner credit profile |
| Equipment lease | Best for equipment you will upgrade | A monthly lease payment; total cost depends on the end-of-term buyout | Days to weeks | The equipment is the collateral; often less cash up front than a loan |
| SBA 504 loan | Best for major long-lived equipment | CDC portion roughly 6.6% on 10 to 25 year terms | Weeks to months | Owner-occupied real estate or major equipment, plus a down payment |
| SBA 7(a) loan | Best when equipment is part of a bigger project | Capped at 10.00%–13.50% by loan size (prime plus the SBA maximum spread) | Weeks to months | Generally stronger credit and two or more years in business |
| Equipment sale-leaseback | Best for cash from equipment you already own | Lease-style pricing on equipment you already own | Days to weeks | The resale value of equipment you own free and clear |
What it costs
Monthly payments on a standard fixed-payment loan at the representative 8%–30% APR band. The low end of each range is 8% APR and the high end is 30% APR.
| Amount | 24 mo | 48 mo | 60 mo |
|---|---|---|---|
| $25,000 | $1,131–$1,398 | $610–$900 | $507–$809 |
| $100,000 | $4,523–$5,591 | $2,441–$3,601 | $2,028–$3,235 |
| $250,000 | $11,307–$13,978 | $6,103–$9,001 | $5,069–$8,088 |
Financing $100,000 over 48 months costs about $2,441–$3,601 a month, or $17,182 to $72,829 in total interest, depending on the rate you qualify for. WithFunded calculation, representative 8%–30% APR band. Not a quote.
What lenders look at
- The equipment quote or invoice, including whether it is new or used.
- Useful life and resale value, which set the term and rate.
- Time in business and the owner's credit.
Mistakes to avoid
- Buying equipment with a line of credit or an advance. The asset outlasts the financing and the payment is far higher.
- Ignoring soft costs. Delivery, installation, and training may or may not be financeable; ask before you sign.
Frequently asked questions
- What is the difference between an equipment loan and a lease?
- With a loan you own the equipment and build equity as you pay. With a lease you pay to use it and may return it, renew, or buy it at the end.
- Can I finance used equipment?
- Usually yes. Terms tend to be shorter and rates higher than for new equipment, because the collateral is worth less and has less life left.
- What does a $100,000 equipment loan cost?
- At a representative 8%–30% APR, about $2,441–$3,601 a month over 48 months.
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How we ranked these options
This guide ranks types of financing, not individual lenders. Each option is ordered by how well it fits the need described on this page, judged on four things in this order: whether the structure matches how the money will be used and repaid, total cost, funding speed, and how hard it is to qualify. Cost figures are WithFunded calculations from published rate inputs as of November 2026: the bank prime loan rate from the Federal Reserve, the SBA maximum-rate schedule, and Federal Reserve survey data. The method follows our 2026 SMB Financing Cost Report, whose own figures use June 2026 rates.
WithFunded is a financing marketplace, not a lender. Our 2-minute form suggests a product type from the families we cover, and a funding partner reviews the request. Not every structure named in this guide is available through WithFunded: options such as SBA microloans, USDA farm loans, bank loans, and seller financing are ones you would pursue directly with the provider. They are listed because leaving out a good fit would make the ranking less useful.
Related guides
The top-ranked option on this page is equipment loan because it fits the most common version of this need. Your own best fit depends on your revenue, time in business, credit, and how fast you need the money.
Disclaimer. WithFunded and Big Think Capital are a financing marketplace; we are not the direct lender and do not guarantee funding, approval, rates, or terms. Everything on this page is a representative example only — not an offer or a commitment to lend, and not financial advice. Actual rates, fees, payments, and terms are set by the funding lender and depend on your business, credit, and the product. Where required by state law, the lender provides cost-of-financing disclosures before any agreement is signed.