Equipment Financing vs. Startup Funding: Compare Business Funding
Equipment financing vs. startup funding — how new businesses can access equipment capital even without revenue history.
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. Startup Business Funding: Startup funding covers the earliest-stage capital needs — equipment, SBA microloans, and founder-backed lines of credit — for businesses with limited or no operating history.
Equipment Financing vs. Startup Business Funding — side by side
| Equipment Financing | Startup Business Funding | |
|---|---|---|
| Typical amount | $5,000 – $5,000,000 | $5,000 – $500,000 |
| Typical term | 2 – 7 years | 6 months – 10 years |
| Rate | 6% – 24% APR | 8% – 30% APR |
| Minimum time in business | 1 year | 0 – 12 months |
| Minimum credit score | 600+ | 600+ (personal credit weighted) |
Which is right for your business?
- Equipment Financing tends to fit best when you need machinery or vehicles.
- Startup Business Funding tends to fit best when you need initial equipment or inventory & supplies.
Frequently asked questions
Can a brand-new business get equipment financing?
Yes — equipment financing is one of the most accessible products for startups. Startups need strong personal credit (700+), a 10–20% down payment, and a credible equipment invoice. Some lenders focus exclusively on startup equipment deals.
