Equipment Financing

Learn about different equipment financing solutions.


application process and fast funding

$15 Billion

delivered to U.S. businesses

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Equipment financing options for small businesses.

Equipment financing commonly refers to one of two types of business funding: equipment loans or equipment leasing. Equipment loans are a form of secured funding in which the borrower uses the funds to purchase the equipment and the lender uses the equipment as collateral. Once the loan is fully paid off, the equipment is the businesses’ to keep, free of any lien.

With equipment leasing, the lender buys the equipment and then leases it to the borrower for a flat monthly fee. Most equipment leases come at a fixed interest rate and term length to keep the monthly payments the same. At the end of the predetermined lease term, depending upon the lease, the business owner may be able to purchase the equipment at fair market value or a predetermined amount — sometimes for as little as a dollar.

Other types of small business funding can be used to finance equipment purchases. OnDeck has two options for equipment financing: a term loan and a line of credit.

Cover equipment financing costs with OnDeck.

OnDeck offers two small business financing solutions that can be used to pay for business equipment. For large, one-time purchases, the OnDeck Term Loan provides up to $250,000 in lump-sum funding. For smaller purchases or multiple future expenses, the OnDeck Line of Credit offers a credit limit up to $100,000 with the ability to draw funds as needed.

OnDeck Line of Credit

A revolving credit line you can draw from 24/7 to receive funds within seconds.*

  • Credit limits from $6K - $100K
  • 12-month repayment term
  • Great for smaller, ongoing equipment expenses

OnDeck Term Loan

A one-time lump sum of cash with an eventual option to apply for more.

  • Loan amounts from $5K - $250K
  • Repayment terms up to 24 months
  • Great for larger, one-time equipment expenses

Benefits of financing from OnDeck.

No hard credit pulls

Check your eligibility without affecting your credit score.***

Fast funding

Lines of credit can fund instantly.* Term loans can fund the same day.

Build business credit

We report to business credit bureaus, which helps build business credit with on-time payments.

Are we a match? Check our minimum requirements.**

1 Year

in business


personal FICO® Score


business annual revenue


checking account

Financing solutions that move at your speed.

Step 1. Complete the application.

Our streamlined application is designed to be completed in just a few minutes.

Step 2. Get a decision.

Work with an expert loan advisor to choose the best option for you.

Step 3. Receive your funds.

Sign your contract and get funds as soon as the same day.

Learn more about equipment financing.

Equipment financing typically refers to a loan used to pay for the purchase of business equipment. The type of equipment varies depending on the nature of the business. With an equipment loan, the equipment purchased will most often act as collateral to secure the loan. This allows the lender to offer the loan for a better interest rate than standard small business financing options.

The term equipment financing can also refer to equipment leasing. With this type of business funding, the lender owns the equipment and the borrower pays flat monthly payments to use it. The lease payments include an interest rate, however payments may be smaller than an equipment loan since the lender doesn’t need to recover the full cost of equipment. This can be a good option for equipment that may go obsolete and need to be replaced within the span of a few years.

Equipment loans can come from a variety of sources depending upon your creditworthiness and the nature of the equipment being purchased. These sources may include:

  • Commercial banks.
  • Credit unions.
  • Online lenders.
  • Government-backed SBA loans.

Term lengths and interest rates for equipment loans vary by individual lender, based on your credit profile and the amount borrowed. Commercial loan repayment terms tend to max out at seven years.

While loan terms will differ, most traditional lenders will ask for a down payment upfront — typically 20% of the loan. An SBA 504 loan will require a 10% down payment. As with most loans, the interest on an equipment loan is tax deductible.

Depending upon the equipment, lease terms could last from typically three to 10 years. The equipment is owned by the leasing company, which charges you a flat monthly fee that includes an interest rate of typically 5% to 16%. If you pursue equipment leasing, ask your tax accountant about whether the monthly payments could be deducted as a business expense.

When people think of business equipment, they will generally think of larger industrial and mechanical equipment. They don’t always consider items such as office furniture, supplies or smaller office appliances and machines. When it comes to equipment loans and equipment leasing, any tangible asset (other than property or buildings) used in the operation of a business may be considered business equipment.

First, make sure you have the documents needed for the particular lender you’re applying with. The requirements for traditional lenders and online lenders are different, so the amount and type of documentation will vary depending upon the lender. For example, a loan at the bank may require a business plan while an online loan likely will not.

If you’re applying with a bank, you will meet with a loan officer at the local branch. If you’re working through the equipment dealer, they will likely be able to handle your application on site. If you pursue an online loan, that application will take place via their online website and possibly a phone call.

Whether you decide to purchase or lease business equipment, make sure you completely understand the terms and costs. Always take the time to read the disclosures and make sure anything unfamiliar or difficult to understand is explained to you.

As with all business financing options, there are pros and cons that come with equipment leasing.

  • May cost less since lender doesn’t need to recover full price of equipment.
  • Won’t tie up credit or cash flow as much as a loan.
  • Good for equipment that may become obsolete quickly.
  • Equipment is owned by lender, although you may be able to purchase it after term ends.
  • Not all types of equipment are available for lease.
  • Still have to cover cost of repairs and maintenance.

Like equipment leasing, there are pros and cons that come with equipment loans.

  • Business owns the equipment.
  • The equipment is an asset that can be sold.
  • Can be easier to qualify for, since equipment acts as collateral.
  • Sizable down payment required, which can impact cash flow.
  • Risk of equipment becoming obsolete.
  • Can only be used for equipment expenses.
  • Same Day Funding is only available in certain states, for term loans up to $100K. Eligibility window is Monday-Friday before 10:30am EST. If checkout is done before 10:30am EST, funds will be available by 5pm local time the same day. If checkout is done after 10:30am EST, or on a weekend or bank holiday, it will not qualify for Same Day Funding and funds will be deposited within 2-3 business days. Eligibility rules around creditworthiness and length of term loan apply.
  • Registration terms and conditions apply. Instant Funding registration and withdrawals are currently supported from your desktop and the OnDeck mobile website. They are not currently supported in the OnDeck mobile app. Occasionally, the transfer may take up to 30 minutes to complete due to potential Visa & bank processing lags. This benefit is available at no additional cost with a vast majority of major banks participating. Instant Funding is available for transactions between $1K – $10K.
  • There are some industries we cannot serve (see list of restricted industries). In addition, OnDeck does not lend to businesses in Nevada, North Dakota or South Dakota. Other underwriting requirements may apply.
  • We always do a soft inquiry unless your credit file is restricted, in which case we would contact you to lift the restriction which may result in a hard-pull.
  • Eligibility for the lowest rates is very limited, available only to businesses with the strongest creditworthiness and cash flows, and typically businesses that have shown an excellent payment history on prior loan products with OnDeck. The average rate for lines of credit is 48.9% APR. Averages are based on loans originated in the half-year ending March 31, 2022.
  • Origination Fee reductions on renewal loans are not applicable to customers that have a 24-month term loan.