Equipment Financing Rates in 2025: What Business Owners Should Know

For many businesses, equipment is the backbone of operations. Whether it’s heavy machinery, medical devices, commercial vehicles, or technology upgrades, having the right equipment is critical for growth. But buying it outright can drain your cash flow. That’s where  equipment financing comes in—and understanding the rates in 2025 can help you make smarter financial decisions.

Why Equipment Financing Matters

• Allows businesses to spread costs over time instead of large upfront payments.

• Preserves working capital for payroll, marketing, and daily operations.

• Helps businesses stay competitive with up-to-date technology and machinery.

Equipment Financing Rates in 2025

As of 2025, equipment loan interest rates typically range between 6% and 20%, depending on factors like credit, lender type, and loan structure.

• Banks and Credit Unions: Generally on the lower end (6–12%), but require strong credit and longer approval times.

• Online Lenders: Faster approvals but higher rates (10–20%).

• SBA 504 Loans: Fixed, long-term rates as low as 5.5%–7% for qualifying equipment purchases.

• Leasing Options: Rates vary but may be higher than loans; leases can provide tax benefits and flexibility.

Rates also depend heavily on the equipment’s expected lifespan—shorter-lived equipment may come with higher financing costs.

Factors That Affect Equipment Financing Rates

1. Credit Score: Higher scores typically secure better rates.

2. Business History: Lenders prefer companies with 2+ years of proven revenue.

3. Collateral: The equipment itself often serves as collateral, lowering lender risk.

4. Loan Term Length: Longer terms can reduce monthly payments but increase total interest.

5. Industry Risk: Construction, restaurants, and trucking often face higher rates.

6. Down Payment: Larger upfront payments may reduce interest rates.

Steps to Get Equipment Financing in 2025 (Featured Snippet Section)

1. Check credit score and eligibility

2. Compare banks, SBA lenders, and online options

3. Gather financial documents and equipment quotes

4. Decide between loan or lease based on needs

5. Apply with multiple lenders to compare offers

6. Review repayment terms and total cost carefully

7. Finalize financing and purchase equipment

Pros and Cons of Equipment Financing

Pros

• Immediate access to essential equipment.

• Equipment serves as collateral, improving approval odds.

• Potential tax deductions (Section 179 depreciation).

Cons

• Interest increases overall cost.

• Risk of being tied to outdated equipment if term is long.

• Higher rates for startups or businesses with bad credit.

Tips for Securing the Best Rate

• Improve credit before applying by paying down debt.

• Work with SBA-preferred lenders for better terms.

• Compare at least 3 offers, including banks and online lenders.

• Consider leasing if technology becomes obsolete quickly.

• Negotiate terms with vendors—sometimes they offer in-house financing promotions.

Future of Equipment Financing in 2025

• More digital lenders offering same-day approvals for equipment purchases.

• Expansion of SBA 504 loan usage for manufacturers and healthcare firms.

• Increased flexibility in lease-to-own programs.

• Competitive environment may lower rates slightly if Fed rates continue easing.

Conclusion: Equipment Financing Rates in 2025 – What Business Owners Should Know

From manufacturers upgrading machinery to restaurants replacing kitchen equipment, financing is often the smartest path to growth. In 2025, rates range from 6% to 20%, with SBA loans and banks offering the most competitive terms.

Ready to move forward? Start by comparing lenders, checking SBA 504 programs, and asking vendors about financing promotions. With preparation and research, you can secure the best equipment financing rate for your business this year.