What it is
An equipment loan pays for a specific piece of equipment, which is the lender's security: if you stop paying, they take it back. A lease lets you use it for a set term, then return it or buy it out. Vendors and dealers often offer their own plans, including “12 months same-as-cash”.
Because the equipment secures it, it's among the easiest kinds of business credit to get: 71% of applicants for equipment and vehicle loans were fully approved in the Federal Reserve's 2026 survey, the highest of any product.
What it really costs per year
Lenders quote about 6–14% to owners with credit scores above 700, about 12–20% in the 620s to 690s, and around 18–22% below that, over two to seven years; online lenders charge weak credit up to about 35%. On $90,000 over five years, total interest is about $14,000 at 6% and about $59,000 at 22%.
Leases can cost more in total than a loan for the same equipment once the end-of-term buyout is counted.
Same-as-cash plans are usually deferred interest: interest builds from the first day and is all charged at once if any balance is left when the promotion ends, often at around 25%.
Work out the yearly cost of an offer you have
How fast the money comes
Online and specialist lenders usually fund in a few days; banks take two to four weeks. Vendor plans can be set up at the counter.
Who qualifies
- Typically a year in business (some lenders accept six months), a credit score of 600 or higher (specialists go lower) and a quote or invoice for the specific equipment.
- A down payment of 0–30%, more for used or specialized equipment.
Where it breaks
- Miss payments and the equipment is repossessed, and a personal guarantee can reach your other assets.
- The deferred-interest cliff on same-as-cash plans.
- Quotes vary widely by credit score and lender, so compare yearly costs, not monthly payments.
Compare with
- Bank loans and lines of credit: yearly cost about 7–11%, money in 2–8 weeks.
- SBA loans: 7(a), 504 and microloans: yearly cost about 7–13.5%, money in 1–3 months.
- Business credit cards and 0% offers: yearly cost about 13–29%, money in days to 2 weeks.