Equipment Financing 2026: $100K–$25M+ | Rates from 5.61%
SBA 504, conventional loans, and lease options. Approvals in 24 hours for deals $100K–$1.5M.
Timeline: Day 0 deal sent → Day 2–4 term sheets → Day 30–45 close
Institutional capital advisory · PeerSense matches equipment + FF&E deals to a curated SBA 504, conventional + lease-finance network · Updated May 2026
Last updated: ·By Ed Freeman, Capital Advisor — PeerSense
How does equipment financing work for businesses?
Equipment financing covers 80-100% of equipment cost with the asset itself as collateral. May 2026 all-in rates: conventional equipment loan 9.0-12.0%, SBA 504 (CDC portion) 5.50-6.50%, captive financing 0-8% on promotional offers. Section 179 + 100% bonus depreciation under OBBBA 2026 lets businesses fully expense up to $2.56M of equipment in year 1, with $4.09M phase-out threshold.
— PeerSense Capital Advisory · Written by Ed Freeman, Founder. Updated May 2026.
Equipment Financing Rates by Structure — May 2026
As of
| Program | Current Rate | Term |
|---|---|---|
| Conventional Equipment Loan | 9.00–12.00% | 3–7 yr |
| $1 Buyout Capital Lease | 8.50–11.00% | 3–7 yr |
| FMV Operating Lease | 7.00–10.00% | 3–5 yr |
| SBA 504 (CDC portion) | 5.50–6.50% | 10–25 yr |
| Vendor Financing | 0.00–8.00% | 12–60 mo |
| Captive Financing | 0.00–7.00% | 36–84 mo |
- Conventional Equipment Loan9.00–12.00%
- Term
- 3–7 yr
- Loan Size
- $50K – $5M
- Best For
- Established borrower, owns at signing
- $1 Buyout Capital Lease8.50–11.00%
- Term
- 3–7 yr
- Loan Size
- $50K – $5M
- Best For
- Loan-equivalent, lessor tax benefit
- FMV Operating Lease7.00–10.00%
- Term
- 3–5 yr
- Loan Size
- $50K – $5M
- Best For
- Refresh-cycle equipment (printing, fleet, IT)
- SBA 504 (CDC portion)5.50–6.50%
- Term
- 10–25 yr
- Loan Size
- $125K – $5.5M
- Best For
- Combined real estate + equipment >$500K
- Vendor Financing0.00–8.00%
- Term
- 12–60 mo
- Loan Size
- $10K – $1M
- Best For
- Promotional manufacturer financing
- Captive Financing0.00–7.00%
- Term
- 36–84 mo
- Loan Size
- $50K – $5M
- Best For
- Caterpillar, John Deere, Toyota, Volvo equipment
Rates indicative as of May 2026 across our equipment-finance lender network (Crest Capital, Balboa Capital, US Bank Equipment Finance) + captive lenders. Pricing varies with credit, term, age of equipment (new vs used), business years operating.
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2026 Market Data
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Equipment Financing by Deal Profile
Every deal is different. PeerSense matches your credit profile, equipment type, and deal size to the right lender — not the other way around.
Asset-Value Underwriting
For established operators with strong collateral, lenders may focus more on equipment value and deal structure than traditional credit metrics alone.
- Equipment quality drives approval
- Strong collateral can offset credit factors
- Structured for experienced operators
- Deal-specific underwriting approach
Mid‑Market Equipment
Standard A‑C credit profiles. Most industries covered. Lease and loan structures with faster approval than traditional bank equipment loans.
- Competitive rates for strong credit
- Faster than bank equipment loans
- New and used equipment
- Flexible term lengths
Challenged Credit & Recent Bankruptcy
C‑D credit lenders exist in PeerSense’s network. Recent bankruptcies may still qualify. Equipment serves as primary collateral — the asset matters more than the score.
- Recent bankruptcy may qualify
- Equipment as primary collateral
- Asset value drives approval
- Specialized lender network
Heavy Equipment: Construction, Transportation, Mining, Aircraft
Large‑ticket iron. Cash flow underwriting. Specialized lenders who understand asset values in construction, transportation, mining, and aviation sectors.
- Cash flow underwriting model
- Sector‑specialized lenders
- Complex deal structuring
- Fleet and multi‑asset financing
Equipment Loan Programs Compared
Current rates as of May 2026. Actual rate depends on credit, time in business, and equipment resale value.
| Program | Rate Range | Term | Down | Best For |
|---|---|---|---|---|
| SBA 504 | 5.61–5.79% | 10–25 yrs | 10% | Owner-occupied CRE + equipment, manufacturers |
| Conventional EFA/Loan | 6.5–12% | 3–7 yrs | 10–20% | Used equipment, fast close, fleet deals |
| FMV Lease | 7–18% | 2–6 yrs | 0–10% | Tech refresh cycles, preserve cash, Sec 179 |
| $1 Buyout Lease | 8–16% | 3–7 yrs | 0–10% | Want ownership, lower payments than loan |
| TRAC Lease | 6–10% | 3–7 yrs | 0% | Trucks, trailers, over-the-road vehicles |
Recent Equipment Closings
$1.2M
Laser Cutting System — Metal Fabrication
Rate: 5.71% blended | 20-year term
Down: 10%
$780K
Excavator + Dozer — Site Prep Contractor
Rate: 7.4% fixed | 5-year term
Down: 15%
$440K
CT Scanner — Imaging Center
Payment: $7,200/mo | 6-year FMV
Down: $0 ($1 buyout)
Industries We Finance
PeerSense has specialized equipment lenders for every equipment‑intensive sector. If it generates revenue, we can likely finance it.
Manufacturing
CNC machines, injection molding, packaging lines, robotics
Construction
Excavators, cranes, dozers, concrete equipment, scaffolding
Transportation
Class 8 trucks, trailers, fleet vehicles, refrigerated units
Healthcare
MRI, CT scanners, dental chairs, surgical equipment, lab systems
Agriculture
Tractors, harvesters, irrigation systems, grain storage
Logistics
Forklifts, conveyor systems, warehouse automation, pallet jacks
Food Processing
Commercial ovens, mixers, bottling lines, cold storage
Hospitality
Kitchen equipment, laundry systems, HVAC, furniture packages
Equipment Loan vs Lease vs SBA 504 vs Sale-Leaseback — Which Structure Fits Your Capex
Four common ways to finance business equipment, each with fundamentally different tax treatment, ownership at the end of the term, and use of capital. Pick based on how long the equipment will earn, your tax bracket, whether you want to own it at payoff, and whether you already own the asset and want to unlock capital from it.
Equipment Loan (EFA) Own from day one | Equipment Lease (Operating) Rent · return at end | SBA 504 (Long-life) Lowest rate · 20-25 yr | Sale-Leaseback Unlock capital from owned equipment | |
|---|---|---|---|---|
| Ownership During / After Term | Borrower owns from day one · lien released at payoff | Lessor owns · borrower has use rights · $1 buyout, FMV, or return at term-end | Borrower owns from day one · CDC holds second lien behind bank first mortgage | Borrower sells equipment to lender, then leases it back · lender owns |
| Rate Range (May 2026) | 7.5% – 12% (credit / collateral driven) | 6% – 10% implied (FMV structure) | 6% – 7.5% fixed on CDC portion | 8% – 13% effective (lease payment reflects asset value + capital cost) |
| Term | 3 – 7 years typical · up to 10 years on heavy / long-life equipment | 2 – 5 years (operating) · 3 – 7 years ($1 / FMV) | 10 years (heavy equipment) · 20 – 25 years (real estate + equipment combined) | 3 – 7 years |
| Advance Rate | 80% – 100% of equipment cost (soft costs may be included) | 100% of equipment use-value over term | Up to 90% (50% bank + 40% SBA + 10% equity) on eligible project cost | 70% – 90% of appraised fair market value of existing equipment |
| Down Payment | 0% – 20% of equipment cost | First + last payment (+ security deposit) typical | 10% of project (as low as 10% with CDC/bank split) | 0% (no new equipment purchase) |
| Tax Treatment | Borrower depreciates (Section 179 / MACRS / bonus depreciation) · interest deductible | Operating lease: full payment deductible · Capital lease: depreciates + interest | Borrower depreciates · bank interest deductible · CDC portion interest deductible | Lease payment deductible · borrower no longer depreciates (sold the asset) |
| Section 179 Eligibility | Yes — deduct up to $1.22M (2026) of equipment cost in year one · bonus depreciation on excess | $1 buyout / finance leases = yes · True operating lease = no (payment deductible instead) | Yes — full Section 179 plus bonus depreciation | Not applicable — already owned; new lease payment deductible as operating expense |
| Collateral / Security | UCC-1 lien on specific equipment purchased | Lessor retains title · UCC-1 filing | Bank first lien + SBA/CDC second lien on equipment and/or real estate | Lessor takes title · UCC-1 filing |
| Credit Requirements | 680+ FICO typical · 2+ years in business · cash-flow underwriting | 660+ FICO · smaller businesses qualify easier (application-only up to ~$250K) | 680+ FICO · 2+ years history · SBA size + industry eligibility · personal guarantee | 620+ FICO often · asset-driven underwriting (equipment value matters more than credit) |
| Typical Deal Size | $25K – $50M | $25K – $5M (application-only ≤ ~$300K) | $500K – $20M (up to $25M max SBA loan) | $250K – $50M |
| Best For | Long-life assets you'll use 5+ years · want to own outright · need Section 179 deduction in year one | Short-hold or rapidly obsoleting equipment (tech, servers, vehicles) · want predictable monthly · want flexibility to upgrade | Heavy manufacturing / medical / industrial equipment tied to an owned facility · 10% down preferred · long-life assets | Owner-operators sitting on fully-paid equipment who need working capital without selling or taking traditional debt |
| Balance Sheet Impact | Asset on · debt on (capital lease if structured that way) | Operating lease: off-balance-sheet (pre-ASC 842) · post-842: ROU asset + lease liability on balance sheet | Asset on · bank + CDC debt on · lowest P&I payments due to long amort | Removes asset · removes debt · adds operating-lease expense · frees cash |
Ownership During / After TermEquipment Loan (EFA): Borrower owns from day one · lien released at payoff
- Equipment Loan (EFA)Own from day one
- Borrower owns from day one · lien released at payoff
- Equipment Lease (Operating)Rent · return at end
- Lessor owns · borrower has use rights · $1 buyout, FMV, or return at term-end
- SBA 504 (Long-life)Lowest rate · 20-25 yr
- Borrower owns from day one · CDC holds second lien behind bank first mortgage
- Sale-LeasebackUnlock capital from owned equipment
- Borrower sells equipment to lender, then leases it back · lender owns
Rate Range (May 2026)Equipment Loan (EFA): 7.5% – 12% (credit / collateral driven)
- Equipment Loan (EFA)Own from day one
- 7.5% – 12% (credit / collateral driven)
- Equipment Lease (Operating)Rent · return at end
- 6% – 10% implied (FMV structure)
- SBA 504 (Long-life)Lowest rate · 20-25 yr
- 6% – 7.5% fixed on CDC portion
- Sale-LeasebackUnlock capital from owned equipment
- 8% – 13% effective (lease payment reflects asset value + capital cost)
TermEquipment Loan (EFA): 3 – 7 years typical · up to 10 years on heavy / long-life equipment
- Equipment Loan (EFA)Own from day one
- 3 – 7 years typical · up to 10 years on heavy / long-life equipment
- Equipment Lease (Operating)Rent · return at end
- 2 – 5 years (operating) · 3 – 7 years ($1 / FMV)
- SBA 504 (Long-life)Lowest rate · 20-25 yr
- 10 years (heavy equipment) · 20 – 25 years (real estate + equipment combined)
- Sale-LeasebackUnlock capital from owned equipment
- 3 – 7 years
Advance RateEquipment Loan (EFA): 80% – 100% of equipment cost (soft costs may be included)
- Equipment Loan (EFA)Own from day one
- 80% – 100% of equipment cost (soft costs may be included)
- Equipment Lease (Operating)Rent · return at end
- 100% of equipment use-value over term
- SBA 504 (Long-life)Lowest rate · 20-25 yr
- Up to 90% (50% bank + 40% SBA + 10% equity) on eligible project cost
- Sale-LeasebackUnlock capital from owned equipment
- 70% – 90% of appraised fair market value of existing equipment
Down PaymentEquipment Loan (EFA): 0% – 20% of equipment cost
- Equipment Loan (EFA)Own from day one
- 0% – 20% of equipment cost
- Equipment Lease (Operating)Rent · return at end
- First + last payment (+ security deposit) typical
- SBA 504 (Long-life)Lowest rate · 20-25 yr
- 10% of project (as low as 10% with CDC/bank split)
- Sale-LeasebackUnlock capital from owned equipment
- 0% (no new equipment purchase)
Tax TreatmentEquipment Loan (EFA): Borrower depreciates (Section 179 / MACRS / bonus depreciation) · interest deductible
- Equipment Loan (EFA)Own from day one
- Borrower depreciates (Section 179 / MACRS / bonus depreciation) · interest deductible
- Equipment Lease (Operating)Rent · return at end
- Operating lease: full payment deductible · Capital lease: depreciates + interest
- SBA 504 (Long-life)Lowest rate · 20-25 yr
- Borrower depreciates · bank interest deductible · CDC portion interest deductible
- Sale-LeasebackUnlock capital from owned equipment
- Lease payment deductible · borrower no longer depreciates (sold the asset)
Section 179 EligibilityEquipment Loan (EFA): Yes — deduct up to $1.22M (2026) of equipment cost in year one · bonus depreciation on excess
- Equipment Loan (EFA)Own from day one
- Yes — deduct up to $1.22M (2026) of equipment cost in year one · bonus depreciation on excess
- Equipment Lease (Operating)Rent · return at end
- $1 buyout / finance leases = yes · True operating lease = no (payment deductible instead)
- SBA 504 (Long-life)Lowest rate · 20-25 yr
- Yes — full Section 179 plus bonus depreciation
- Sale-LeasebackUnlock capital from owned equipment
- Not applicable — already owned; new lease payment deductible as operating expense
Collateral / SecurityEquipment Loan (EFA): UCC-1 lien on specific equipment purchased
- Equipment Loan (EFA)Own from day one
- UCC-1 lien on specific equipment purchased
- Equipment Lease (Operating)Rent · return at end
- Lessor retains title · UCC-1 filing
- SBA 504 (Long-life)Lowest rate · 20-25 yr
- Bank first lien + SBA/CDC second lien on equipment and/or real estate
- Sale-LeasebackUnlock capital from owned equipment
- Lessor takes title · UCC-1 filing
Credit RequirementsEquipment Loan (EFA): 680+ FICO typical · 2+ years in business · cash-flow underwriting
- Equipment Loan (EFA)Own from day one
- 680+ FICO typical · 2+ years in business · cash-flow underwriting
- Equipment Lease (Operating)Rent · return at end
- 660+ FICO · smaller businesses qualify easier (application-only up to ~$250K)
- SBA 504 (Long-life)Lowest rate · 20-25 yr
- 680+ FICO · 2+ years history · SBA size + industry eligibility · personal guarantee
- Sale-LeasebackUnlock capital from owned equipment
- 620+ FICO often · asset-driven underwriting (equipment value matters more than credit)
Typical Deal SizeEquipment Loan (EFA): $25K – $50M
- Equipment Loan (EFA)Own from day one
- $25K – $50M
- Equipment Lease (Operating)Rent · return at end
- $25K – $5M (application-only ≤ ~$300K)
- SBA 504 (Long-life)Lowest rate · 20-25 yr
- $500K – $20M (up to $25M max SBA loan)
- Sale-LeasebackUnlock capital from owned equipment
- $250K – $50M
Best ForEquipment Loan (EFA): Long-life assets you'll use 5+ years · want to own outright · need Section 179 deduction in year one
- Equipment Loan (EFA)Own from day one
- Long-life assets you'll use 5+ years · want to own outright · need Section 179 deduction in year one
- Equipment Lease (Operating)Rent · return at end
- Short-hold or rapidly obsoleting equipment (tech, servers, vehicles) · want predictable monthly · want flexibility to upgrade
- SBA 504 (Long-life)Lowest rate · 20-25 yr
- Heavy manufacturing / medical / industrial equipment tied to an owned facility · 10% down preferred · long-life assets
- Sale-LeasebackUnlock capital from owned equipment
- Owner-operators sitting on fully-paid equipment who need working capital without selling or taking traditional debt
Balance Sheet ImpactEquipment Loan (EFA): Asset on · debt on (capital lease if structured that way)
- Equipment Loan (EFA)Own from day one
- Asset on · debt on (capital lease if structured that way)
- Equipment Lease (Operating)Rent · return at end
- Operating lease: off-balance-sheet (pre-ASC 842) · post-842: ROU asset + lease liability on balance sheet
- SBA 504 (Long-life)Lowest rate · 20-25 yr
- Asset on · bank + CDC debt on · lowest P&I payments due to long amort
- Sale-LeasebackUnlock capital from owned equipment
- Removes asset · removes debt · adds operating-lease expense · frees cash
Program criteria current as of May 2026.
Section 179 annual limits updated per IRS guidance — $1.22M in 2026 with phase-out beginning at $3.05M in equipment purchased. Bonus depreciation for 2026 is 60% (40% phase-down vs. 2025 at 80%). Rate ranges reflect indicative May 2026 market pricing — actual terms depend on equipment type, useful life, credit profile, and lender. Tax treatment simplified — consult your CPA.
Equipment Capital Channels
Where Equipment Debt Comes From in 2026
Equipment financing routes through four distinct channels — each with different ticket sizes, application thresholds, and asset-type appetite. PeerSense matches every deal to the channel and lender that best fits the borrower + asset profile.
Independent Specialty EFAs
Independent equipment-finance companies dominate the $25K–$250K app-only band with 2–5 day credit decisions. Broad asset-type appetite (technology, construction, transportation, light manufacturing). Faster than banks on smaller deals.
Bank EFA Divisions
Top-10 bank equipment finance divisions (Bank of America, US Bank, Wells Fargo, KeyBank, BMO, Truist, PNC, Live Oak, Ascentium, Stearns) handle $250K+ tickets with full-doc underwriting. Strongest on healthcare, manufacturing, transportation, and SBA 504 equipment combos.
Captive / Vendor Programs
Manufacturer captive finance arms (Caterpillar Financial, John Deere Financial, Volvo Financial Services, Toyota Industries Commercial Finance, Komatsu Financial, PACCAR Financial, Kubota Credit, GM Financial Commercial, Daimler Truck Financial) offer the cheapest rates — often 0–4% promotional — but only on the manufacturer's own equipment.
SBA 504 Equipment + Real Estate
SBA 504 (~5.50–6.50% on the CDC portion, 25-yr fixed) is typically the cheapest debt for combined real-estate-plus-equipment projects ≥ $500K total. Routed through a participating bank + Certified Development Company partnership.
Worked Example
$500K CNC Machine Tool — Tax-Adjusted Effective Cost
Manufacturing sponsor in 24% federal + 5% state bracket purchasing a $500,000 CNC machining center via 60-month equipment loan at 9.0%. Section 179 + bonus depreciation walk-through under 2026 OBBBA rules.
Equipment + Loan
- Equipment cost: $500,000
- Down payment (10%): $50,000
- Loan amount: $450,000
- Rate: 9.00% (60-mo EFA)
- Monthly P&I: $9,341
- Total interest paid over term: $110,460
Year-1 Tax Treatment
- Section 179 deduction (cap $1.22M, well within): $500,000
- Bonus depreciation (60% on excess in 2026): $0 (Section 179 covered full cost)
- Year-1 deductible interest: $38,275
- Total Year-1 tax-deductible expense: $538,275
- Combined federal + state tax rate: 29%
- Year-1 tax savings: $156,100
Effective Cost Analysis
- Sticker price: $500,000
- Year-1 tax savings: −$156,100
- Year-1 effective cost: $343,900
- Tax savings reduce effective Year-1 capital outlay by 31.2%. Subsequent years pay only interest deduction (declining annually) plus the operating loan payment. Total 60-month effective cost net of Year-1 deduction: ~$471,200 vs $610,460 stick price + interest.
Section 179 deduction limit for 2026 is $1.22M with phase-out beginning at $3.05M in total equipment purchased. Bonus depreciation for 2026 is 60% (phasing down from 100% in 2017–2022). Above the $1.22M Section 179 cap, equipment can still be 60% bonus-depreciated in Year 1. Always confirm tax treatment with your CPA.
Lease vs. Loan: Which Structure Fits?
The right structure depends on your tax situation, cash flow needs, and how long you plan to use the equipment. Here's a side-by-side breakdown.
Equipment Lease
Use the equipment without owning it
Equipment Loan
Own the equipment from day one
Equipment Lease
Not sure which is right? PeerSense can model both structures for your specific deal and show you the total cost of ownership comparison. No charge for the analysis.
Not sure which loan is right for you?
Take our 60-second quiz to get matched with the right program.
Explore Equipment Financing Options
Specialized equipment financing programs for different needs
Heavy Equipment: $1M–$100M
Large-ticket construction, transportation, mining, and aircraft equipment financing.
Restaurant Equipment Financing
Hood lines, walk-ins, ovens, POS, and full kitchen build-outs. Loan, lease, SBA 504, and vendor structures for QSR, fast-casual, and full-service operators.
Sale-Leaseback
Turn owned equipment into working capital. Keep using the equipment while accessing cash.
Frequently Asked Questions
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PeerSense connects you with equipment lenders who understand your industry and close quickly. One conversation. Direct introduction.
Go Deeper on Equipment Financing
Equipment lender shortlists, Section 179 strategy, and industry-specific equipment financing scenarios.
Lender Shortlists
- Best Equipment Financing Lenders 2026Our 2026 shortlist of top equipment lenders, lessors, and SBA 504 partners.
- Manufacturing Equipment FinancingCNC, robotics, and production equipment financing — SBA 504 + vendor + captive paths.
- Construction Equipment FinancingHeavy equipment, trucks, and trailer financing for contractors and fleet operators.
Editorial Guides
- Equipment Financing FundamentalsAll six structures explained — loan, lease, SBA 504, vendor, captive, sale-leaseback.
- Lease vs Finance vs SBA 504Tax treatment, Section 179 eligibility, and cash-flow impact compared.
- Section 179 CalculatorModel 2026 Section 179 + 100% bonus depreciation tax savings on your equipment purchase.
Specialty Scenarios
- Restaurant Equipment FinancingHood lines, walk-ins, POS, ovens — restaurant-specific equipment financing.
- Auto Repair Shop FinancingLift, alignment, paint-booth equipment bundled with shop acquisition financing.
- Motorcycle Shop / DealershipReal-estate + service-bay equipment financing for motorcycle dealerships (floor plan separate).
- SBA Loans (7(a) + 504)Owner-occupied equipment + real-estate SBA programs — 504 long-amortization, 7(a) working capital, MARC for manufacturers.
- Asset-Based Lending on EquipmentBorrow against existing equipment fleet with revolving ABL facilities.
See Related Rates by Program
PeerSense covers the full commercial capital stack. Rates and structures across our money pages — updated weekly.
SBA 7(a) & 504
5.50–11.75%Up to $5M acquisition / real estate / equipment, 10% down
CMBS Conduit
5.60–7.10%10-yr non-recourse fixed, $5M–$500M+, fully assumable
Bridge Loans
9.00–14.00%12–36 mo transitional, SOFR + 470-970 bps, 65-75% LTV
DSCR Investor
5.95–8.50%30-yr fixed rental, qualifies on property cash flow
Hotel Financing
5.85–11.75%CMBS + SBA 504 + bridge + PIP across all flags
Mezzanine Debt
11.00–18.00%Subordinate to senior, $1M–$50M, capital stack fill
Private Credit
7.80–18.00%Non-bank flexibility, unitranche, recap, transitional
Invoice Factoring + ABL
0.5–3.5% / 30dB2B receivables, trucking / staffing / construction / govt
No-Doc CRE
7.50–11.50%Limited-doc commercial, asset-based underwriting