What is the cheapest way to finance manufacturing equipment?

For major long-lived equipment, SBA 504, with CDC rates around 6.6%. It takes longer than a conventional equipment loan.

Can installation costs be financed?

Often, particularly within SBA 504 projects and with lenders that finance soft costs. Ask before you commit.

What does a $300,000 machine cost per month?

At a representative 8%–30% APR, about $4,676–$8,578 a month over 84 months.

WithFunded › Best-of guides › By product

Best equipment financing for manufacturers in 2026

The best equipment financing for a manufacturer is SBA 504 for major long-lived machinery, because its CDC portion carries a fixed rate around 6.6%, and a standard equipment loan for everything else. A lease suits equipment tied to a specific contract. Production machinery is strong collateral, so manufacturers can usually negotiate on term and down payment.

By the WithFunded team · Published November 11, 2026 · Rates as of November 2026

The short list

Best for major machinery: SBA 504 loan
Best for most production equipment: Equipment loan
Best for contract-specific equipment: Equipment lease
Best for cash to fund materials: Equipment sale-leaseback

The 4 best options, ranked

1. SBA 504 loan Best for major machinery

For equipment with a useful life of 10 years or more, the 504 program's fixed rate is typically the lowest cost of capital a manufacturer can get.

Watch for: Only for fixed assets. It cannot fund payroll, inventory, or other working capital. SBA loan guide →
2. Equipment loan Best for most production equipment

CNC machines, presses, and material handling equipment finance readily over five to seven years.

Watch for: Older or highly specialized equipment gets shorter terms and higher rates. Equipment financing guide →
3. Equipment lease Best for contract-specific equipment

If a machine is needed for one customer's program, a lease that ends with the contract avoids owning idle equipment.

Watch for: On a fair-market-value lease you do not own the equipment unless you pay the buyout. Equipment financing guide →
4. Equipment sale-leaseback Best for cash to fund materials

Paid-off machinery can be refinanced through a sale-leaseback to fund raw materials for a large order.

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
SBA 504 loan	Best for major machinery	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
Equipment loan	Best for most production equipment	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 contract-specific equipment	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
Equipment sale-leaseback	Best for cash to fund materials	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	60 mo	84 mo	120 mo
$100,000	$2,028–$3,235	$1,559–$2,859	$1,213–$2,636
$300,000	$6,083–$9,706	$4,676–$8,578	$3,640–$7,909
$750,000	$15,207–$24,265	$11,690–$21,445	$9,100–$19,771

Financing $300,000 over 84 months costs about $4,676–$8,578 a month, or $92,773 to $420,543 in total interest, depending on the rate you qualify for. WithFunded calculation, representative 8%–30% APR band. Not a quote.

What lenders look at

An appraisal or quote for the machinery.
The contracts or demand that justify the added capacity.
Existing liens on plant equipment.

Mistakes to avoid

Using a line of credit to buy a machine. It ties up working capital in a long-lived asset.
Forgetting installation, rigging, and tooling costs when sizing the loan.

Frequently asked questions

What is the cheapest way to finance manufacturing equipment?: For major long-lived equipment, SBA 504, with CDC rates around 6.6%. It takes longer than a conventional equipment loan.
Can installation costs be financed?: Often, particularly within SBA 504 projects and with lenders that finance soft costs. Ask before you commit.
What does a $300,000 machine cost per month?: At a representative 8%–30% APR, about $4,676–$8,578 a month over 84 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 SBA 504 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.