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Best SBA loans for equipment in 2026
The best SBA loan for equipment is the 504 loan when the equipment is major and long-lived, because of its low fixed rate, and the 7(a) loan when equipment is part of a broader need. For a single piece of ordinary equipment, a conventional equipment loan is usually faster and nearly as cheap. Microloans cover small equipment purchases for new businesses.
By the WithFunded team · Published November 11, 2026 · Rates as of November 2026
The short list
- Best for major machinery
- SBA 504 loan
- Best when equipment comes with other needs
- SBA 7(a) loan
- Best for speed
- Equipment loan
- Best for small purchases by new businesses
- SBA microloan
The 4 best options, ranked
1. SBA 504 loan Best for major machinery
Equipment with a useful life of at least 10 years qualifies for 504 financing, with a fixed CDC rate around 6.6%.
Watch for: Only for fixed assets. It cannot fund payroll, inventory, or other working capital. SBA loan guide →
2. SBA 7(a) loan Best when equipment comes with other needs
A 7(a) loan finances equipment for up to 10 years and can add working capital or improvements in the same loan.
Watch for: Heavy documentation, and the timeline rules it out for anything urgent. SBA loan guide →
3. Equipment loan Best for speed
A conventional equipment loan closes in days to weeks with less paperwork, which often outweighs a small rate advantage.
Watch for: Older or highly specialized equipment gets shorter terms and higher rates. Equipment financing guide →
4. SBA microloan Best for small purchases by new businesses
Up to $50,000 for equipment, from lenders willing to work with startups.
Watch for: Small amounts, and availability depends on an intermediary lender serving your area.
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 |
| SBA 7(a) loan | Best when equipment comes with other needs | 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 loan | Best for speed | 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 |
| SBA microloan | Best for small purchases by new businesses | Rate set by the nonprofit intermediary; loans up to $50,000 | Weeks | Open to startups and thinner credit, often paired with business training |
What it costs
SBA 7(a) rates are capped at prime plus a maximum spread that shrinks as the loan grows. At the current 7.00% prime rate, these are the highest payments a lender could charge on a 10-year term:
| Loan amount | Maximum rate | Monthly payment at the maximum |
|---|---|---|
| $100,000 | 13.00% | $1,493 |
| $400,000 | 10.00% | $5,286 |
| $1,000,000 | 10.00% | $13,215 |
Payments at the SBA maximum variable rate for each size tier. Many borrowers qualify below the maximum. Source for rate caps: U.S. Small Business Administration. WithFunded calculation.
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 |
|---|---|---|
| $100,000 | $2,028–$3,235 | $1,559–$2,859 |
| $400,000 | $8,111–$12,941 | $6,234–$11,437 |
Financing $400,000 over 84 months costs about $6,234–$11,437 a month, or $123,697 to $560,724 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's useful life, which determines 504 eligibility and the term.
- Quotes or purchase agreements.
- Cash flow, credit, and a down payment.
Mistakes to avoid
- Using an SBA process for a small, standard purchase where a conventional lender is quicker.
- Ordering equipment before the loan is approved if the program requires approval first.
Frequently asked questions
- Can I use an SBA loan to buy equipment?
- Yes. SBA 7(a), 504, and microloans all finance equipment.
- Is SBA 504 or 7(a) better for equipment?
- A 504 loan has the lower fixed rate for major long-lived equipment. A 7(a) loan is simpler for smaller purchases or mixed needs.
- What does a $400,000 SBA equipment loan cost?
- On a 10-year 7(a) loan at the current maximum rate, about $5,286 a month.
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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.