How to get approved for equipment leasing

Yes — you can get approved for equipment leasing with a 580 FICO score, 6+ months in business, and $100K+ annual revenue, using the equipment itself as collateral. Check what rates you qualify for in 2 minutes with no impact to your credit score.

The specifics

The credit score floor for equipment financing sits at 580 FICO — one of the lowest thresholds among business funding products. Unlike traditional term loans that require 640+ and 24 months in business through the SBA, equipment financing relies on the asset as collateral, which reduces lender risk and opens approvals to thinner credit files. According to current lender requirements in the equipment financing market, you can get funded with just 6 months in business if your monthly revenue reaches $10K+ (or $100K+/year). The typical APR range runs 8–25% depending on credit strength and equipment age, as documented by industry rate tracking at Bay Street Lending.

For approval, gather these items before applying: 3–6 months of business bank statements, your most recent year of tax returns (personal and business), profit and loss statements, and an invoice or quote from the equipment vendor showing the exact equipment, terms, and seller. Lenders verify that the equipment value supports the loan amount — called the loan-to-value ratio. According to Bankrate's guide to equipment business loans, many lenders want the equipment value to exceed the loan amount by at least 20%, which protects the lender if they need to repossess and resell the asset.

Qualification & edge cases

If your credit sits below 580 or you have recent bankruptcies (within 12 months), traditional equipment financing becomes difficult but not impossible. Alternative funders sometimes accept 500–579 scores using higher down payments (10–20%) and shorter terms, according to Bankrate's research on equipment financing for borrowers with credit challenges. Another path is working capital advances secured against future revenue, though these carry higher costs — factor rates of 1.15–1.40 equate to roughly 25–60%+ APR, as outlined in current small business lending product terms.

The time-in-business requirement drops to 3–6 months for equipment financing specifically, but if you're brand new with zero business history, you'll need a personal guarantee and may face higher rates. The revenue floor of $100K/year is standard for prime-term financing; anything below that typically routes to short-term or alternative products with higher costs. For restaurant equipment specifically, some lenders specialize in that vertical and may offer more flexible qualification based on projected revenue rather than historical financials.

If you don't qualify now, the fastest path to approval is building 6 months of consistent business revenue in your bank accounts, then reapplying. Even a small bump in your credit score (20–40 points into the 620 range) can unlock better rates — improving from fair (620–679) to good (740+) credit can reduce your APR by several percentage points, which saves thousands of dollars over a typical 3-5 year equipment term.

Background & how it works

Equipment financing works by using the equipment itself as collateral. The lender places a lien on the equipment, which means if you default, they repossess and resell it to recoup their losses. This collateral structure is why equipment financing accepts lower credit scores than unsecured business loans — the asset backs the debt, reducing the lender's risk. According to Biz2Credit's equipment loan rates guide, equipment financing remains one of the most accessible pathways for small businesses to acquire machinery, vehicles, and technology without depleting cash flow.

There are two primary structures: equipment loans (where you own the equipment outright after the final payment) and equipment leases (where you rent for a set term and either return, buy for a residual value, or renew). The Equipment Leasing and Finance Association (ELFA) reports that equipment leasing is one of the most common financing methods for U.S. businesses, with billions in annual originations.

For tax purposes, Section 179 expensing lets you deduct the full purchase price of qualifying equipment in the year of acquisition, up to the annual limit. Per IRS guidance, qualified financed equipment can still be eligible for Section 179 expensing, making leasing or financing an attractive option for businesses looking to maximize tax efficiency.

Bottom line

Equipment leasing approval comes down to three factors: your credit score (580+ for most lenders), time in business (6+ months), and annual revenue ($100K+). Gather your bank statements, tax returns, and a vendor quote, apply through a direct lender or broker, and get funded in as little as 3-7 days. The process is designed to be fast and straightforward precisely because the equipment itself secures the loan — lenders care more about the asset's value than your credit history. See the rate you qualify for in 2 minutes — no credit-score hit.

Disclosures

This content is for educational purposes only and is not financial advice. equipmentleasing.finance may receive compensation from partner lenders, which may influence which products are featured. Rates, terms, and availability vary by lender and applicant qualifications.

Sources

• Bankrate – Best Equipment Business Loans
• Bay Street Lending – Equipment Financing Guide 2026
• Biz2Credit – Equipment Loan Rates Guide