Do I need a down payment for equipment financing?

Often a partial one, though because the equipment is collateral some lenders finance most or all of the cost. Terms vary by lender, equipment type, and your profile.

Can I finance used equipment?

Usually yes, though terms may be shorter and rates higher for older assets, since the collateral value and remaining useful life are lower.

Is leasing or financing better?

Financing builds ownership and suits equipment you'll keep long term; leasing lowers upfront cost and suits equipment you'll replace often. The right choice depends on the asset's lifespan and your cash flow.

What's the cheapest way to finance major equipment?

For high-value assets, SBA 504 typically offers the lowest rates (CDC portion around 5.6%–6.0% in 2026) in exchange for more documentation and a longer process.

WithFunded › Equipment Financing

Equipment Financing: the equipment itself is the collateral

Equipment financing funds the purchase or lease of business equipment, with the equipment serving as collateral. Because the loan is secured by the asset, approval is often easier than for unsecured financing.

A WithFunded guide · Rates as of June 2026 · Updated quarterly

Quick facts

Best for: Buying or leasing vehicles, machinery, or hardware
Collateral: The financed equipment itself
Terms: Usually matched to the equipment's useful life
Rate basis: Representative 8%–30% APR; SBA 504 from ≈5.6%–6.0% for major assets
Funding speed: Days to weeks
Credit fit: Collateral can offset a thinner credit profile

How equipment financing works

You finance a specific piece of equipment, and that equipment secures the loan. If you default, the lender can recover the asset — which lowers their risk and can make approval easier and pricing better than unsecured options. Terms are typically matched to how long the equipment will be useful, so you're not still paying for a machine after it's worn out.

What equipment financing costs per month

At the representative 8%–30% APR band:

Amount	24 mo	36 mo	48 mo	60 mo
$25,000	$1,131–$1,398	$783–$1,061	$610–$900	$507–$809
$50,000	$2,261–$2,796	$1,567–$2,123	$1,221–$1,800	$1,014–$1,618
$100,000	$4,523–$5,591	$3,134–$4,245	$2,441–$3,601	$2,028–$3,235
$250,000	$11,307–$13,978	$7,834–$10,613	$6,103–$9,001	$5,069–$8,088

Estimate your own:

Amount $75,000 Term 36 months

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estimated monthly payment

Estimate only, at a representative 8%–30% APR band for a standard term-loan structure. Not an offer. Your actual rate, term, and payment are set by the lender.

For major equipment, SBA 504 is usually cheapest

For heavy machinery and high-value assets, the SBA 504 program's CDC portion runs roughly ≈5.6%–6.0% on long terms — typically the lowest-cost route in 2026, at the cost of more paperwork and a longer timeline.

Frequently asked questions

Do I need a down payment for equipment financing?: Often a partial one, though because the equipment is collateral some lenders finance most or all of the cost. Terms vary by lender, equipment type, and your profile.
Can I finance used equipment?: Usually yes, though terms may be shorter and rates higher for older assets, since the collateral value and remaining useful life are lower.
Is leasing or financing better?: Financing builds ownership and suits equipment you'll keep long term; leasing lowers upfront cost and suits equipment you'll replace often. The right choice depends on the asset's lifespan and your cash flow.
What's the cheapest way to finance major equipment?: For high-value assets, SBA 504 typically offers the lowest rates (CDC portion around 5.6%–6.0% in 2026) in exchange for more documentation and a longer process.

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Payment figures are WithFunded calculations at a representative 8%–30% APR band; SBA 504 rates are from the U.S. Small Business Administration (Jan 2026).

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.