Most startup financing is a chicken-and-egg problem: lenders want revenue history, and you need money to generate revenue. Equipment financing is the big exception. Because the loan is secured by the machine, vehicle, or hardware you're buying, many lenders will fund a business that's months — or even days — old, as long as the founder and the asset check out. Here's exactly how that works, what it costs, and how to put together an application that gets approved.
Why equipment lenders say yes to startups
When an unsecured lender underwrites a two-year-old business, they're betting on cash flow. When an equipment lender underwrites a startup, they're betting on two things: the founder and the asset.
The lender files a UCC-1 lien on the equipment (and often takes a security interest in the title, for vehicles). If the loan defaults, they repossess and resell the asset. That recovery path is what lets them approve a business with no revenue history — the loan is partially self-collateralizing.
This is why loan-to-value (LTV) thinking dominates startup equipment underwriting. A $100,000 excavator that would sell at auction for $75,000 tomorrow is a very different risk than a $100,000 custom-built production line worth $20,000 to anyone else. Practices vary by lender, but the general pattern holds: the stronger the secondary market for the asset, the more flexible the lender can be on your business history.
For a broader look at how these loans are structured, see our equipment financing guide.
What lenders actually evaluate when there's no business history
With no financials to underwrite, lenders shift weight to these factors:
1. Founder personal credit. Your personal FICO score, credit depth, and payment history become the primary credit signal. There's no universal minimum — thresholds vary widely by lender — but stronger credit means more competing offers and better pricing, and weaker credit generally means a larger down payment or shorter term. Every legitimate lender assesses credit and repayment ability; be wary of anyone who claims otherwise. See what credit score you need for a business loan for context.
2. The equipment itself. Age, condition, brand, resale market, and whether it's titled. New equipment from a major manufacturer with a vendor quote is the easiest case. Used equipment from a private seller usually requires more documentation (and sometimes an inspection or appraisal).
3. Down payment. Your Down Payment (Equity Injection) is skin in the game. Startups are commonly asked for 10%–30% down, though this varies by lender and asset. Some programs advertise low- or zero-down structures for strong-credit borrowers — we cover the trade-offs in no-money-down equipment financing.
4. Personal guarantee. For a startup, a Personal Guarantee is essentially universal — you're personally on the hook if the business can't pay. On SBA loans it's mandatory by regulation: 13 CFR 120.160 requires holders of 20% or more ownership to guarantee the loan (SBA Form 148, unlimited guaranty; owners under 20% may sign a limited guaranty on Form 148L). As of September 2026.
5. Industry experience and a credible plan. A startup trucking company run by a driver with 10 years behind the wheel reads very differently than one run by a first-timer. A short business plan with realistic revenue projections tied to the equipment ("this reefer trailer generates roughly $X per loaded mile at Y miles/month") materially strengthens a thin file.
Which equipment is easiest to finance as a startup
No primary source ranks asset classes, so treat this as general guidance — but lender appetite consistently tracks resale liquidity:
| Easier to finance | Why | Harder to finance | Why |
|---|---|---|---|
| Trucks, trailers, work vans (titled) | Deep resale markets, easy repossession via title | Custom fabrication / one-off machinery | Little resale value to anyone else |
| Construction equipment ("yellow iron") | Strong auction markets, holds value | Software-heavy or rapidly obsoleting tech | Value evaporates quickly |
| Medical, dental, restaurant equipment | Standardized, active secondary markets | Installed/attached equipment (hard to remove) | Repossession is costly or impractical |
| Late-model used equipment from dealers | Verifiable condition and price | Old used equipment from private sellers | Valuation and title/lien risk |
If your equipment is on the right side of that table, expect more paperwork, a bigger down payment, or a co-signed/cross-collateralized structure — not necessarily a decline.
A worked example: $80,000 box truck for a new delivery business
Say you're launching a delivery company and need an $80,000 box truck. A lender offers a 60-month equipment loan with 15% down.
- Down payment: $12,000 (15%)
- Amount financed: $68,000
- Illustrative rate: 12% APR (startup pricing varies widely; this is an example, not a quote)
- Monthly payment: roughly $1,513 for 60 months
- Total payments: about $90,760, so roughly $22,760 in interest over five years
Now the underwriting question you should ask yourself before any lender does: can the truck cover its own payment? If the truck generates $9,000/month in delivery revenue with $5,500 in fuel, insurance, and driver costs, that's $3,500 of monthly margin against a $1,513 payment — a comfortable cushion. If margin is $1,800, one slow month puts you underwater. Build this math into your projections; it's the single most persuasive page in a startup application.
▦Estimate your equipment financing paymentsRun the numbers in the equipment financing estimator →▸SBA options for startup equipment
SBA programs are slower than online equipment lenders but often cheaper, and they explicitly serve startups:
- SBA 7(a) loans go up to $5 million and can finance equipment on terms of 10 years or less — longer if the equipment's useful life exceeds 10 years, plus up to 12 extra months for installation (13 CFR 120.212). Rates are negotiated between you and the lender but capped by SBA: for variable-rate loans, maximums range from base rate + 3.0 points (loans over $350,000) up to base rate + 6.5 points (loans of $50,000 or less), per eCFR as of September 2026. SBA guarantees up to 85% of loans of $150,000 or less and 75% above that (sba.gov).
- SBA microloans provide up to $50,000 specifically to help businesses start up and expand; the average loan is around $13,000 and rates generally fall between 8% and 13% (SBA, March 2026). For a food trailer, salon chairs, or a first mower fleet, a microloan can be the right size.
Expect full underwriting either way — projections, a personal financial statement, and the mandatory personal guarantee discussed above. More detail in our startup business loans guide.
Startup equipment financing document checklist
Having these ready can cut approval time from weeks to days:
- Vendor quote or invoice for the exact equipment — make, model, year, serial/VIN, price, and seller details. For used private-party purchases, add photos, hour/mileage readings, and proof the seller owns it free of liens.
- Driver's license and personal credit authorization for each owner (expect a hard inquiry at funding; many marketplaces and lenders start with a soft pull).
- Personal Financial Statement (PFS) — assets, liabilities, liquidity. Cash reserves after the down payment matter.
- Business formation documents — LLC/incorporation papers, EIN, business license where applicable.
- Personal bank statements (and business, if any) — usually 3–6 months, to show the down payment source and living-expense cushion.
- Business plan with equipment-level projections — the revenue-per-unit math from the worked example above.
- Proof of insurance quote on the equipment — lenders require coverage naming them as loss payee before funding.
How to shop offers without wasting your credit file
Startup equipment pricing varies enormously between lenders — the same file can see offers several percentage points apart depending on which lender's credit box it happens to fit. That's the argument for a marketplace approach: through EQ Funding, one application reaches a network of equipment lenders who compete for your deal, instead of you applying serially and stacking hard inquiries. EQ is a marketplace, not a lender — the lenders in the network make all credit decisions.
When offers come back, compare them on the same axes: APR (not just payment), term length, down payment required, fees, prepayment terms, and whether the lien covers only the equipment or your whole business (a blanket lien is a meaningful concession — avoid it if a specific-asset lien is available). Our guide to comparing business loan offers walks through the math.
If the equipment doesn't fully cover your launch costs — working capital, deposits, inventory — startup capital financing can round out the picture alongside your equipment financing.