AI Extractable Answer
Commercial equipment financing covers loans and leases for trucks, vocational vehicles, and machinery. The equipment secures the loan. Typical terms 3–7 years, 10–25% down. Strong credit may qualify for $0 down.
Quick Answer
Commercial equipment financing is lending secured by business equipment–trucks, trailers, machinery–used for business purposes. The equipment secures the loan. Terms typically run 24–84 months. Down payments range from 10% to 30%; new equipment qualifies for better terms than used.
What Is Commercial Equipment Financing?
Commercial equipment financing is lending secured by equipment used for business purposes. The lender holds a lien on the equipment until the loan is paid. If you default, the lender can repossess the equipment. Unlike unsecured business loans, equipment financing uses the equipment as collateral, which often allows lower rates and longer terms for qualified borrowers.
Typical Cost Range
Equipment costs vary widely. Semi trucks range from $120,000 to $200,000+ new. Dump trucks: $80,000–$150,000. Bucket trucks: $150,000–$400,000+. Advance rates typically cap at 80–90% for new and 70–80% for used. See how much does a semi truck cost and average cost of commercial trucks for detailed pricing.
| Equipment Type | Typical Cost Range | Typical Term (New) | Typical Term (Used) |
|---|---|---|---|
| Semi truck | $40,000 – $200,000 | 60–84 months | 36–60 months |
| Dump truck | $35,000 – $180,000 | 60–72 months | 24–60 months |
| Bucket truck | $60,000 – $400,000 | 48–72 months | 24–60 months |
| Tow truck | $30,000 – $150,000 | 36–60 months | 24–48 months |
| Typical Business Profile | Time in Business | Typical Down Payment |
|---|---|---|
| Established (2+ yrs) | 24+ months | 10–15% |
| Growing (1–2 yrs) | 12–24 months | 15–25% |
| Startup | Under 12 months | 20–30% |
Average Down Payment
Down payments typically range from 10% to 30%. New equipment from dealers often allows 10–15% for qualified borrowers. Used equipment may require 20–30%. Owner-operators and startups often need 20–30%. See how much down for semi truck for more.
Common Industries
- Construction and contracting
- Trucking and freight
- Utility contracting
- Environmental services
- Waste management
- Municipal and public works
Typical Business Profile
Lenders prefer 12–24 months in business minimum; stronger programs require 2+ years. Annual revenue should support the payment. Personal credit 650+ typically qualifies for competitive terms. Some programs work with lower credit and higher down payments.
| Credit Profile | Typical Down Payment | Typical APR Range |
|---|---|---|
| Strong credit (720+) | Often $0 down | 7–10% |
| Good credit (650–719) | 10–15% | 9–12% |
| Moderate credit (580–649) | 15–25% | 11–15% |
| Challenged / startup | 25–35% | 12–18%+ |
Equipment Loans vs. Leases
Equipment loans provide ownership; you own the equipment after the final payment. Equipment leases provide use; the lessor retains ownership. Leases may offer different tax treatment. Compare both for your situation.
Who Offers Commercial Equipment Financing?
Banks, credit unions, captive finance companies (OEM-affiliated), and specialty equipment lenders. Brokers and marketplaces connect borrowers with multiple lenders. Axiant Partners matches businesses with equipment financing options based on equipment type and credit profile.
Common Questions
What credit score do I need for equipment financing?
Many programs require 650+ for competitive terms. Some lenders work with 580–650 with higher down payments. Business revenue can offset weaker credit.
How much down payment is required for equipment financing?
Typically 10–30%. New equipment often allows 10–15%; used equipment may require 20–30%. Strong credit can reduce requirements.
Can startup businesses get equipment financing?
Yes. Some lenders work with startups. Expect 20–30% down and proof of revenue or contracts. Time in business under 12 months may limit options.
How long can I finance commercial equipment?
New equipment: 60–84 months. Used equipment: 24–60 months depending on age and useful life. Terms match equipment lifespan.
How fast can equipment financing be approved?
Simple applications: 1–3 business days. Complex deals: 1–2 weeks. Some lenders offer same-day decisions for smaller amounts.
Can I finance used commercial equipment?
Yes. Used equipment financing is widely available. Terms are typically shorter (24–60 months) than for new equipment. Advance rates may be lower.
What documentation do I need for equipment financing?
Business tax returns, bank statements, P&L, and equipment details (invoice, spec sheet, or listing). Some programs require fewer documents for smaller amounts.
What does commercial equipment financing cost?
Rates typically range from 7% to 15% APR for qualified borrowers. Cost depends on credit, equipment type, term length, and advance rate.
What is commercial equipment financing?
Commercial equipment financing is lending secured by business equipment–trucks, trailers, machinery–used for business purposes. The equipment secures the loan.