Equipment financing rates in 2026 run 7-22% APR, driven mainly by credit tier. A-tier (720+ FICO, 2+ years in business): 7-9%. Mid-tier (640-719): 10-14%. Bad credit (below 640): 15-22% with specialty lenders. Because the equipment is collateral, rates run 200-500 bps below unsecured working capital. Used equipment: +1-3 points. Larger deals ($100k+): roughly 0.5-1 point cheaper than sub-$50k. Most loans and $1-buyout leases are fixed-rate. Prime sits around 7.5%.
Equipment financing is one of the cheapest forms of business credit because the asset itself secures the loan. In 2026, rates sit at the higher end of the last decade thanks to the Federal Reserve's extended above-trend funds rate, but the spread between equipment financing and unsecured products remains wide. This page is a reference: 2026 rate ranges by credit tier and equipment type, what drives each quote, and how to tell whether the offer in front of you is competitive. For the evergreen explainer on how pricing works, see what are typical equipment financing rates; for cross-product context, see the 2026 business loan rates hub.
2026 Equipment Financing Rates by Credit Tier
| Credit Tier | Rate Range (2026) | Typical Term | Down Payment |
|---|---|---|---|
| A-tier (720+, 2+ yrs TIB) | 7-9% APR | 5-7 yrs | $0-10% |
| B-tier (680-719) | 10-13% APR | 4-6 yrs | 0-10% |
| C-tier (640-679) | 13-16% APR | 3-5 yrs | 10-20% |
| D-tier (580-639) | 16-22% APR | 2-4 yrs | 15-25% |
| Below 580 | Limited programs; pricing varies | 2-3 yrs | 20%+ |
Tiers assume new or late-model equipment with a strong resale market. See equipment financing with bad credit for sub-640 strategies and credit score requirements to confirm your tier.
How Equipment Type Moves the Rate
| Equipment Type | Rate Effect | Why |
|---|---|---|
| Trucks, trailers, construction | Best pricing | Deep, liquid resale markets |
| Manufacturing & CNC | Competitive | Standardized, reusable assets |
| Medical & dental | Competitive for established practices | Stable demand, strong borrower credit |
| Restaurant & commercial kitchen | +1-3 points | Faster depreciation, weaker resale |
| Used / high-hour equipment | +1-3 points | Less remaining useful life |
| Specialized / low-resale | +2-4 points | Thin secondary market raises lender risk |
How Equipment Financing Rates Are Set
Most equipment lenders are asset-based and set rates on internal models rather than publishing a prime-plus spread. Those models weigh cost of funds (which tracks the Fed), the borrower's credit and time in business, and the collateral's resale value. As of June 2026, prime sits around 7.5%, up from ~3.25% in early 2022, which is why even A-tier pricing starts near 7% rather than the sub-5% rates common before the tightening cycle. Lease structures ($1 buyout, FMV, TRAC) quote a rate factor instead of APR — always convert to an effective rate before comparing. See equipment loan vs lease for the structural differences.
What Actually Drives Your Quote
- Personal FICO — the single biggest input. 720 vs 680 vs 620 produces materially different pricing on the same machine.
- Time in business — 2+ years opens the best programs; 6-24 months still qualifies but at higher rates and shorter terms.
- Equipment resale value — liquid assets price 1-4 points better than specialized ones because the lender can recover more on default.
- New vs used — used and high-hour equipment adds 1-3 points.
- Down payment — 10-20% down lowers lender risk and can shave points, especially for newer businesses.
- Deal size — sub-$50k deals carry higher fixed-cost overhead; $100k+ deals price roughly 0.5-1 point cheaper per dollar.
How to Compare Equipment Offers Properly
- Convert lease rate factors to APR. A 0.0200 monthly rate factor looks tiny but can equal a low-double-digit APR once annualized. Ask every lender for the effective APR.
- Add fees to the rate. Documentation fees, origination (1-3%), and end-of-term buyouts change the real cost. A lower rate with a large balloon can cost more than a higher rate with none.
- Match the term to useful life. Stretching a 5-year asset to 7 years lowers the payment but raises total interest and can leave you paying on equipment past its productive life.
Next Step
Get equipment financing quotes from multiple lenders in one application, with no dealer markups or padded fees. Get matched at current 2026 rates.
Frequently Asked Questions
What are typical equipment financing rates in 2026?
They vary by credit tier and equipment type — strong credit on standard equipment earns the lowest rates, while weaker credit or specialized gear costs more. The equipment securing the loan keeps rates below most unsecured products.
How does equipment type affect the rate?
Equipment that holds value and is easy to resell — trucks, standard machinery — earns better rates because the collateral is strong; specialized or fast-depreciating equipment can carry a higher rate or larger down payment.
How are equipment financing rates set?
By your credit and revenue, time in business, the down payment, the equipment’s resale value, and the lender. Asset-secured pricing means the collateral does a lot of the work.
How do I compare equipment financing offers?
Compare total cost — the all-in dollars and effective APR — not just the rate or monthly payment. Watch the term length, any fees, the down payment, and the end-of-term buyout on leases.
Frequently Asked Questions
What are equipment financing rates in 2026?
Equipment financing runs 7-22% APR in 2026 depending on credit tier and equipment type. A-tier borrowers (720+ FICO, 2+ years in business) price 7-9%; mid-tier (640-719) price 10-14%; sub-640 borrowers price 15-22% with specialty lenders. Because the equipment secures the loan, rates are generally lower than unsecured working capital.
Is equipment financing cheaper than a working capital loan?
Yes. Equipment is collateral, so equipment financing typically prices 200-500 basis points below an unsecured working capital loan for the same borrower. A business that qualifies for a 12% working capital loan often gets 8-9% on an equipment loan.
Do used equipment loans have higher rates?
Usually 1-3 points higher than new equipment. Lenders weigh resale value and remaining useful life. Equipment with strong secondary markets (trucks, construction, CNC machines) prices better than specialized or low-resale assets.
What credit score do you need for the best equipment financing rates?
720+ FICO with 2+ years in business gets the bottom of the range (7-9%). Strong equipment collateral can offset a lower score, but credit is still the single biggest input to your rate.
Are equipment financing rates fixed or variable?
Most equipment loans and leases are fixed-rate, locking your payment for the full term. The fixed rate is set off prime at origination. Variable structures exist but are uncommon in traditional equipment financing.