How to Get an Equipment Loan for a New Business

Starting a new business is exciting — but it often requires more tools, machinery, or vehicles than you can afford upfront. That’s where equipment financing comes in.

The challenge? Many lenders prefer to work with companies that have been operating for two or more years, making true startups feel shut out.

The good news: there are still equipment loan options available for brand-new businesses, as long as you understand what lenders look for and how to position your application.

In this guide, we’ll cover:

• What types of startup equipment financing are available

• Credit score and down payment requirements

• Documentation you’ll need to apply

• Which industries have restrictions

• How to choose the right lender for your situation

  
  

Startup Equipment Loan Options

Most new businesses looking to finance equipment fall into two groups: true startups (no time in business) and young businesses (under 2 years old). Both can get funding, but the programs and requirements differ.

Here are the main equipment financing options for startups:

1. Specialized Equipment Finance Companies

   • Some lenders specialize in financing equipment for startups, especially in medical, construction, or industrial trades.

   • Typical amounts: $25,000 – $75,000 (sometimes up to $250,000 with excellent credit).

   • Loan terms: 36–60 months depending on asset type.

     
     

2. Vendor or Dealer Financing

   • Many equipment dealers partner with finance companies that will take on newer businesses.

   • Requires a down payment (often 10–20%).

   • Works well if you’re purchasing directly from a recognized vendor.

     
     

3. Security Deposit Programs

   • Instead of a traditional down payment, some lenders ask for a security deposit (around 10%).

   • These funds are refunded or applied at the end of the loan.

     
     

Credit Requirements for New Business Equipment Loans

Since there’s no business history to review, lenders lean heavily on personal credit scores.

• Minimum FICO: 650–675+

• Best rates: 700+

• With 750+ credit, some lenders may approve up to $50,000 with minimal documentation.

  
  

If your score is below 650, most startup-friendly programs won’t approve. In that case, consider building your credit first or exploring secured financing.

Down Payments and Collateral

Down payments are almost always required for startups. These can be setup in a couple different ways:

• Upfront payments, due at time of signing, and typically only 2 payments at most

• Down payment, 10-20% is common, some higher risk assets may require 30%+

• Security Deposit, less common, but typically this is returned at the end of the loan

Documentation You’ll Need

Even without a business track record, lenders want to see you’re serious. For most startup loans, you’ll need:

• Government-issued ID and Social Security Number

• Business entity paperwork (LLC, Corp, or DBA filing with your state)

• Equipment invoice, purchase order, or auction agreement

• Bank statements (3 months preferred, though not always required)

• Photos or condition reports for used equipment

  
  

The more information you can provide, the quicker underwriting is able to make a decision.

Industry Restrictions

Not all industries qualify for startup equipment financing. Common restrictions include:

• Restaurants and food service

• Churches and nonprofits

• Businesses in “restricted” categories like cannabis or adult services

  
  

If you fall into one of these industries, you may need to look at alternative financing or personal credit-based loans.

Loan Terms You Can Expect

• Term lengths: 36–60 months 

• Interest rates: Typically higher for startups — often 19–25% depending on credit and down payment

• Funding speed: Many programs can fund within a week once an application is submitted.

  
  

Final Thoughts: Setting Yourself Up for Approval

If you’re a brand-new business, getting an equipment loan is possible — but you’ll need to come prepared with:

• A strong personal credit profile (ideally 700+)

• A reasonable down payment (10–20%)

• A clear plan for how the equipment will generate revenue

  
  

Working with a broker who understands startup financing can also help, since many banks and traditional lenders will turn startups away.

At Brilliance Funding Partners, we specialize in finding equipment financing solutions for new businesses, whether you’re launching a construction company, opening a medical practice, or starting your first trucking venture.

Ready to explore your options? Let’s talk about how to structure your first equipment loan so your business gets off the ground with the tools it needs.

About the Author

   Jared Holmes is the founder of Brilliance Funding Partners, where he helps business owners navigate the commercial lending landscape with confidence. With 9 years of hands-on experience in SBA lending, equipment financing, and working capital solutions, Jared focuses on asking the right questions and delivering financing strategies that make sense for each business. Connect with Jared for a personalized conversation about your options.