The Best Equipment Financers For 2020

While there’s still a good case to be made for going through traditional banks for equipment funding, circumstances — including mediocre credit, unhealthy cash flow, or a short time in business — may lead you to look online for a less traditional method of financing.

Below, we’ll share information about some of our favorite equipment financers. But first, because equipment needs are so varied and specific, we’ll look at some of the factors that might rule out (or rule in) particular financers.

Renting VS Buying

One of the biggest factors to weigh before you look at equipment financers is whether or not you want to own the equipment over the long-term, or simply use it for a few years and eventually return it.

There are advantages and disadvantages to both ownership and renting. Points to consider include:

• The longevity of the equipment. Will you be using it for a year, a couple of years, or indefinitely? How quickly will it become obsolete?
• Taxes and bookkeeping. Whether the equipment appears on your balance sheets or your financer’s has significant tax ramifications. Some businesses prefer to write off their equipment costs as operating expenses, whereas others might prefer to write the asset off as a purchase.
• Maintenance responsibilities. Depending on your lease agreement, you may or may not be responsible for maintaining the equipment for the duration of your lease.

Loans VS Leases

Equipment financing comes in a number of different forms. The two broadest categories are equipment loans and leases. Leases, which tend to be more complex, can be broken down into further categories.

If you’re buying equipment for your business, you can consider both loans and leases. Equipment loans tend to offer better rates, but usually only cover around 80 percent of the cost of the equipment, so be prepared to make up the remainder.

Leases can be used to either rent or buy equipment (or even rent-to-own). Leases are generally meant to cover the entire cost of equipment–though you should still be prepared to make your first and possibly last month’s payment up front. If you’re ultimately looking to buy with a lease, you’ll probably want to explore capital leases. If you’d rather rent or rent-to-own, you’ll want to consider an operating lease. Keep in mind that there a huge number of variations of both of these types of leases, many of them tailored to specific industries and types of businesses.

Supported Industries

The easiest rule-out criteria for any lender is whether they’re willing to finance equipment within your industry.

Additionally, in the case of leases, some lessors have preferences with regard to which equipment vendors they’re willing to work with. Some lessors, called captive lessors, only work with a particular manufacturer (in fact, they’re usually owned by the manufacturer).

Equipment Financers

The best equipment financer is often the one you already have a working relationship with. This lender can be your local bank or credit union, or even a captive lessor in your area.

If that doesn’t describe your circumstances, here are some of our favorite alternative equipment lenders.

Crest Capital

Amount:	$5K – $500K
Term length:	24-74 months
Interest rate:	5%+
Down payment:	First month
Lease agreement:	$1 Buyout; 10 percent purchase option; Fair market value; Guaranteed purchase agreement; First-amendment lease; Equipment financing agreement (EFA); Operating lease
Additional costs:	Administrative fee-$275
Effective APR:	Learn more
Read our full Crest Capital review Visit the Crest Capital website

Highlights: Transparency, reputation

Crest Capital (see our review) is a venerable equipment financer offering a respectable variety of leases to established businesses with decent credit. The company takes great pains to make information about their products available, which makes it a lot easier to know what you’re walking into. Just bear in mind that they charge an administration fee on their leases.

Direct Capital

Amount:	Up to $250K
Term length:	1-72 months
Interest rate:	5.49%+
Down payment:	Unknown
Lease agreement:	$1 Buyout; Fair Market Value; Net terms
Additional costs:	Shipping and handling
Effective APR:	Learn more
Read our full Direct Capital review Visit the Direct Capital website

Highlights: Customer service

Direct Capital (see our review) is a bit more limited in what it offers but does provide strong customer service to smaller businesses looking to own their equipment.

ApplePie Capital

Highlights: Franchise equipment

ApplePie Capital (see our review) primarily finances franchises and does make franchise-related equipment loans. This company is more niche than most equipment financers, but if you fall within their market, it’s worth giving them a look.

eLease

Highlights: Low rates, supports many industries

eLease (see our review) has been quietly offering a variety of leases to a broad range of industries since 2004. I say quietly because they haven’t garnered a ton of user reviews in that time. Nevertheless, their rates are—at least potentially—better than those of many other alternative lenders/lessors.

OnDeck

Highlights: Easy application process, low credit requirements

OnDeck (see our review) is a big name in online lending thanks in large part to low credit requirements and a fast application process. They don’t prominently advertise their equipment loans, but it is an option for those looking to borrow from a well-established lender.

SmartBiz

Highlights: Convenient service for businesses that qualify for SBA loans and need a large sum of money.

SmartBiz (see our review) provides an easier way to access SBA loans. If you need a lot of money and meet the qualifications, you can actually use an SBA 7(a) loan to purchase equipment for your business. SmartBiz doesn’t originate these loans but provides a streamlined way to access the SBA’s network of preferred bank lenders.

TCF Equipment Finance

Highlights: Offers many financing options, good rates

TCF Equipment Finance (see our review) is, as you might guess, the equipment financing division of TCF National Bank. TCF’s rates are good and their leasing options comprehensive, but you’ll need at least a 700 credit score to qualify in most cases.

Currency Capital

Highlights: Broad platform for finding equipment lenders, good reputation

Currency Capital (see our review) is a bit different than most of the other companies on this list. Like SmartBiz, they don’t originate their own loans. Instead, they pride themselves on creating an efficient technological platform for connecting businesses to their lender network.

Final Thoughts

We’ll be updating this list over time as we review additional equipment financers. Do you have a favorite equipment financer? Let us know!