Equipment Financing Companies: Your Top Options
Equipment financing companies provide business loans specifically for the use of equipment purchases. Once the equipment is purchased, it acts as collateral on the loan. If the business has to default on the loan, the equipment financing company will then recoup their losses by liquidating the equipment. These are the basics of how this type of loan works.
Some lenders are better for certain kinds of loans or even specialize in them, and we’re going to go over your best options for equipment financing below.
The best equipment financing companies to work with in 2020 are:
In this guide, we’ll walk through a complete review of all three of these top options to help you choose the best equipment financing company for your business.
What Is Equipment Financing?
Equipment financing is a type of business loan for businesses that need to purchase equipment, but they can’t or don’t want to pay for it outright.
As the name suggests, an equipment financing loan is a lump sum of funding provided to a business for the purpose of purchasing equipment. Over the term of the loan, the business pays a set amount monthly that includes interest. The lender considers the purchased equipment to be collateral for the loan.
If your business fails to repay the loan, the lender can collect the purchased equipment and resell it to recoup their lost funds.
How Can Equipment Financing Benefit My Company?
Equipment financing companies can provide much-needed relief to a business’s cash flow. Even if your business is able to purchase a new piece of equipment with cash on hand, equipment financing companies allow you to access affordable, long-term financing so that you can invest your company’s cash into other opportunities and expenses.
Not to mention, many small businesses don’t have the cash on hand to shell out hundreds of thousands of dollars for a piece of needed equipment. And that’s especially true if a piece of necessary equipment unexpectedly breaks.
Equipment financing companies answer this common business problem, and the best equipment financing companies do so quickly and offer the most affordable terms.
Top 3 Equipment Financing Companies
To make your search for the best equipment financing company for your business that much easier, we’ve compiled a list of the three best options of 2020. We’ve whittled down the list of winners based on their minimum requirements, equipment financing terms, and required application documents.
1. Crest Capital
Crest Capital is one of the most well-regarded equipment financing companies on the market. They offer a long list of different equipment financing structures that can address pretty much any preference or need a small business could have. For such top-of-the-line equipment financing, though, Crest Capital has some pretty lofty requirements.
Is Crest Capital the right equipment financing company for your business?
Let’s take a look at the details to find out:
Crest Capital Minimum Requirements
As mentioned, Crest Capital sets minimum requirements for borrowers that are difficult for some small business owners to reach. To be eligible for this equipment financing company, you’ll need:
- At least two years in business
- 650 personal credit score
Granted, Crest Capital doesn’t name a minimum annual revenue, which might make it easier for some businesses to be eligible for their equipment financing. That said, the time in business and personal credit requirements that Crest Capital names will still filter out a fair amount of business owners hoping to secure equipment financing through them.
Another perk is that you can check your eligibility online without impacting your credit if you’re looking for $250,000 or less in funding.
Crest Capital Terms
Crest Capital is so generally well-renowned thanks to the stellar equipment financing terms they offer up to small businesses. Crest Capital equipment financing can offer the following ranges of terms:
- $5,000 to $500,000 or more in loans
- Two- to six-year terms
- Rates as low as 5%
That’s right—this equipment financing company is able to offer up terms good enough to maybe even compete with bank equipment financing providers.
Crest Capital Required Application Documents
The documents you’ll need to offer up for the equipment financing application process through Crest Capital will depend on how much financing you’re applying for.
If you’re applying for $250,000 or less, then you’ll just have to provide the following four documents for your application:
- Proof of ownership
- Bank reference
- Equipment quote
- Equipment seller’s contact information
That said, if you’re applying for more than $250,000 in equipment financing, then you’ll have to provide the following documents, as well:
2. Balboa Capital
If you’re looking for the best equipment financing companies to work with, then you should definitely include Balboa Capital on your shortlist. This lender isn’t solely an equipment financing company—they offer working capital loans as well. Nonetheless, their most popular form of funding is equipment financing and, as a result, is where Balboa Capital shines brightest.
One of the main reasons that equipment financing from Balboa Capital is so sought after is their corporation-only guarantee option. But be sure to note: Balboa’s equipment financing actually works like a combination of equipment financing and leasing. Balboa Capital technically owns the equipment as the borrower pays it off. But when they do pay the equipment off, the borrower will then have full ownership.
Let’s take a look at the numbers on how Balboa stacks up to other equipment financing companies:
Balboa Capital Minimum Requirements
Compared to Crest Capital minimum requirements, Balboa Capital’s are actually pretty manageable. To be eligible for equipment financing from this company, you’ll need:
- $100,000 in annual revenue
- 600 personal credit score
- At least one year in business
Though Balboa Capital does name a minimum annual revenue unlike Crest Capital, the lower personal credit and time-in-business requirements will make Balboa much more accessible for many business owners.
Balboa Capital Terms
Despite their relatively lax minimum requirements, Balboa Capital will offer up some pretty ideal equipment financing terms:
- $2,000 to $500,000 loans
- Two- to five-year terms
- Rates from 3.99% to 25%
Especially notable are the interest rates that Balboa Capital attaches to their equipment financing: Single-digit interest rates are practically unheard of in the world of non-bank financing.
Balboa Capital Required Application Documents
Much like Crest Capital, Balboa Capital will require different documents for your equipment financing application based on how much financing you are applying for.
If you’re applying for $250,00 or less, it could be funded in the same day you apply, and you’ll just need the following paperwork:
- Certificate of Good Standing
- Voided business check
- Copy of your driver’s license
If you want more than $250,000, it will take several days to fund, and you’ll also need to hand over more detailed documentation:
- Two-year balance sheet
- Two-year profit and loss statement
- Two years of business tax returns
3. Currency Capital
Next up on our list is Currency Capital. This top equipment financing provider is an alternative lender based out of Los Angeles that provides equipment financing in as little as 24 hours. That said, the repayment terms that Currency offers could be significantly shorter for borrowers than they would be with other equipment financing companies.
Let’s take a look at the details on what Currency Capital equipment financing can offer your business:
Currency Capital Minimum Requirements
If you’re a new business looking for the right equipment financing company, then Currency Capital could very well be your top option. Currency Capital doesn’t name a minimum time in business requirement, but their other requirements include:
- $120,000 annual revenue
- 620 personal credit score
So, if you’re running a new business, but you have high annual revenue and solid personal credit to work with, then Currency Capital might be your only equipment financing option.
Currency Capital Terms
Now, the equipment financing terms that Currency offers up will look different from what Crest and Balboa are able to offer. First, their equipment financing loan amounts can get much bigger. Second, the repayment rates that Currency offers can be a lot shorter, as well.
Let’s take a look at the details:
- $5,000 to $2 million loans
- Six-month to seven-year terms
- Rates as low as 6%
All in, if you’re looking for a large amount of equipment financing, then Currency will be your best bet. They even finance aircraft. However, you should know that Currency Capital could stick you with a shorter repayment term, especially if you’re taking on a smaller amount of debt.
Currency Capital Required Application Documents
Perhaps the biggest draw of Currency Capital equipment financing is that if you’re applying for equipment financing of less than $150,000, then you’ll need virtually no paperwork to apply.
To apply for less than $150,000, you’ll simply need:
- An equipment quote to finalize funding
And that’s it.
If you’re applying for $150,000 or more, though, you’ll have to hand over:
- Two years of business tax returns
- Three months of bank statements
- An exact equipment quote
- Profit and loss statements
- Balance sheet
- Debt schedule
If you want a quick application process, then a small equipment financing loan from Currency Capital is a go-to option. However, if you need more equipment financing than $150,000 and you need it quick, then perhaps consider other lenders.
Frequently Asked Questions
The Bottom Line
Think you’re ready to work with one of these top equipment financing companies? Then your next step would be actually applying for one of these loans. Luckily, the application process for equipment financing is pretty simple.
Because there’s no required down payment or collateral, the typical equipment financing application process is pretty straightforward. And, as you’ve seen with the list of documents required by the top equipment financing companies, it requires little documentation if you’re applying for a smaller loan amount.
Once you submit the required information to the lender of your choice, they will either approve your application or not. If you’re approved, your business will receive the agreed-upon funds to purchase the equipment your business needs.
That equipment is then used as the collateral for the loan. Most equipment financing is done with fixed-rate interest, which means the interest rate on your debt will stay the same, even as the market rate fluctuates. This predictability makes repayment of equipment financing loans simple and easy for most businesses.