Equipment Financing for Startups: What's Actually Possible in 2027

By American Business Center | Updated January 2027 | Business Loans

Getting equipment financing as a startup is harder than for an established business, but it is not impossible. The equipment itself reduces the lender's risk substantially compared to unsecured loans — if the business fails, the lender can repossess and sell the equipment to recover the loan. This collateral position is why some lenders will finance equipment for businesses with limited history when they would not approve an unsecured term loan.

The startup equipment financing landscape

Most traditional bank equipment lenders require 2 years in business. Here is where the realistic options are for businesses under 2 years old:

Option	Min. Time in Business	Min. Credit Score	Typical APR	Down Payment
OEM captive financing (new equipment)	Often none/flexible	650–680	0%–12%	0%–10%
National Funding	6 months	575	15%–35%	0%
Currency Capital	12 months	600	12%–25%	0%–20%
Balboa Capital	12 months	620	10%–22%	0%–10%
Crest Capital	24 months preferred	650	8%–20%	0%–10%
SBA 7(a) startup	None (but harder)	680	10%–15%	10%–20%

OEM financing: often the best path for new equipment

Manufacturer-backed financing (Caterpillar Financial, John Deere Financial, Ford Credit Commercial, etc.) is often more accessible for newer businesses than third-party lenders because the manufacturer wants to sell equipment and has a direct financial stake in making the loan work. OEM programs frequently offer:

• 0% financing for 12–24 months on new equipment purchases
• More flexible time-in-business requirements than banks
• Approvals based heavily on personal credit score and equipment value
• Deferred payment options for businesses with seasonal revenue

How to maximize approval odds as a startup

• Personal credit score matters most: For startups, the lender is primarily evaluating you, not the business. A 700+ personal score opens significantly more options at better rates than a 620 score.
• Larger down payment reduces lender risk: A 20%–30% down payment on equipment demonstrates commitment and reduces the lender's loss exposure if the business fails.
• Choose new or near-new equipment: Lenders are more comfortable financing equipment that holds its value. A new $150,000 excavator is a better collateral position than a 15-year-old used one at $80,000.
• Show a business plan and projections: Some startup equipment lenders, particularly SBA lenders, want to see that you have thought through how the equipment will generate revenue to service the loan.
• Apply to multiple lenders simultaneously: Rates vary significantly across lenders for startup profiles. Getting 3–4 offers before accepting is worth the extra applications.

Startup equipment leasing: often easier than a loan

Leasing is frequently more accessible for startups than equipment loans because the lessor retains ownership throughout the lease term, reducing their risk. For a startup, an operating lease can provide access to essential equipment with:

• Lower monthly payments than a loan (you pay for use, not ownership)
• No or minimal down payment
• More flexible qualification criteria
• Option to upgrade equipment at the end of the lease term

The tradeoff is that you build no equity in the equipment and total cost over the lease term typically exceeds the purchase price. For technology-dependent equipment with short useful lives (medical devices, certain manufacturing equipment), leasing often makes financial sense regardless.

Bottom line

Startup equipment financing is possible but more expensive and more dependent on personal credit than financing for established businesses. For new equipment, start with the manufacturer's financing program — their approval criteria are often more flexible and their rates more competitive. For used equipment, National Funding and Currency Capital work with businesses under 2 years old at higher rates. If you have strong personal credit (680+) and a solid business plan, an SBA 7(a) loan is worth pursuing even as a startup for significant equipment purchases.