Equipment Financing vs. Revenue-Based Financing: Compare Business Funding
Equipment financing vs. RBF — asset-collateralized loans vs. flexible revenue-tied capital for growing businesses.
Equipment Financing: Equipment financing uses the purchased equipment as collateral, making it one of the most accessible forms of business funding for asset-heavy industries. Revenue-Based Financing: Revenue-based financing provides capital in exchange for a fixed percentage of future monthly revenue until a set repayment cap is reached.
Equipment Financing vs. Revenue-Based Financing — side by side
| Equipment Financing | Revenue-Based Financing | |
|---|---|---|
| Typical amount | $5,000 – $5,000,000 | $25,000 – $1,000,000 |
| Typical term | 2 – 7 years | 6 – 36 months |
| Rate | 6% – 24% APR | 6% – 12% of monthly revenue |
| Minimum time in business | 1 year | 6 months |
| Minimum credit score | 600+ | 550+ |
Which is right for your business?
- Equipment Financing tends to fit best when you need machinery or vehicles.
- Revenue-Based Financing tends to fit best when you need saas growth or e-commerce inventory.
Frequently asked questions
Which is faster to close — equipment financing or RBF?
Both typically close in 1–5 business days. Simple equipment deals under $250K can close in 24–72 hours. RBF providers using open banking integrations can generate same-day offers. In practice RBF is often slightly faster due to automated underwriting.
