Business Equipment Loans: A Solution for Upgrading Your Equipment

How do business equipment loans work? A business equipment loan finances the purchase of new or used equipment with the equipment itself serving as collateral. In 2026, most equipment loans close in 1 to 5 business days at APRs of roughly 7% to 20%, with terms of 2 to 7 years and loan amounts from $5,000 to several million dollars. Because the asset secures the debt, approval thresholds are lower than for unsecured term loans and the lender typically funds 80% to 100% of the invoice price.

Equipment loans are a type of secured financing where the equipment being purchased serves as collateral for the loan. This structure benefits borrowers in several ways: approval requirements are typically less stringent than unsecured loans, interest rates are generally lower because the lender has a tangible asset backing the loan, and terms can extend up to seven years or more to keep monthly payments manageable.

Virtually any business equipment can be financed, including heavy machinery, commercial vehicles, IT hardware and software, medical and dental equipment, restaurant and food service equipment, construction equipment, agricultural equipment, and office furniture and fixtures. Loan amounts range from as little as $5,000 to several million dollars depending on the equipment and the lender.

The application process for equipment loans is straightforward. Lenders typically require a quote or invoice for the equipment you want to purchase, recent business bank statements, basic business and personal financial information, and a minimum credit score — often 600 or above for competitive rates, though some lenders work with scores as low as 500. Quick Loans Direct simplifies this process by matching you with equipment financing specialists from our 300+ lender network who compete for your business, ensuring you get the best rates and terms available.