Images by GettyImages; Illustration by Hunter Newton/Bankrate
Key takeaways
- Equipment loans can often be funded quickly
- Large banks and the SBA take the longest to fund equipment loans
- Submitting a complete application with the required documentation can expedite loan processing
The best equipment loans can be funded in just a few days — provided your business documents are in order and you have a quote for the equipment you intend to buy.
Since equipment loans are a frequent need for many business owners, you have many options from bank and online lenders to equipment manufacturers. With these options comes a wide variety of funding timelines for you to consider.
Larger banks and SBA loans will typically take the longest, though they offer the lowest interest rates. Online or alternative lenders may only take a day to get approved, but you will likely see higher rates than traditional banks.
No matter which option you choose, be prepared to spend time comparing lenders and submitting an application. The more you take care of when you apply, the faster it will be to get equipment financing.
How long will it take to receive an equipment loan?
How fast you can get equipment financing varies based on the type of lender you select. You may pay more in interest for the speed of an alternative lender. So, if you aren’t in a rush for funding and qualify, an SBA or bank loan will often have a more competitive rate.
Banks and credit unions
Although banks and credit unions offer more competitive rates, their equipment loans — like most loan options — may take longer to fund. The entire process, from application to funding, could take 30 days or more, depending on the lender.
In general, the application may be more intensive and require more documentation. And the underwriting process could take longer, especially if the bank or credit union uses human underwriters rather than the underwriting software many online lenders use.
SBA loans
SBA 7(a) and 504 loans have a typical funding time of 30 to 90 days. The Express loan is much faster since the SBA doesn’t need to directly approve the loan. The Express loan timeline will depend on the lender’s usual process for approving loans.
Some SBA-approved alternative lenders can get your equipment loan approved and funded much faster, while large national banks may take the full 30 to 90 days to fund your equipment loan.
Online lenders
On average, online lenders have the quickest loan approval and funding timelines. For equipment loans, it may take only a day or two for you to know your application status. Online lenders are also willing to work with startup businesses or business owners with bad credit scores of 500.
Lenders like Taycor Financial and Triton Capital offer funding within a day — and Balboa Capital may be able to fund your loan on the same day you apply.
However, the process may take longer if the lender needs to inspect your equipment or you don’t have a quote from the seller to submit with your loan application.
No two lenders are alike, so as you explore your options, you’ll see varying loan amounts, interest rates and terms and different types of equipment loans
Manufacturer financing
If you apply for funding through a manufacturer, you may be able to get your loan funded quickly. A manufacturer or seller usually has preferred lenders they work with. Like all equipment loan options, it will depend on the type of equipment and the seller itself.
Although using an in-house financing option can be quicker, you may receive a higher rate due to the convenience.
Process for getting an equipment loan
The process of getting an equipment loan is relatively straightforward. They are a common loan option for businesses of every size, so you should be able to complete the process in a few steps.
- Check the requirements. Every lender has its own requirements, so confirm that your business meets or exceeds the minimum before applying.
- Compare lenders. In addition to general requirements, pick the best equipment loan based on each lender’s fees, processing time and interest rates. Comparing and finding low rates and fees is essential to help you pay the lowest cost possible for your equipment loan.
- Apply with three or more lenders. Once you have a handful of lenders that you qualify for, complete the application. There are common business loan documents you will need to submit to keep the application process quick.
- Wait during the underwriting. Banks and SBA loans have a longer underwriting period than online or alternative lenders. You may need to wait anywhere from a few hours to 30 days for your application to be processed and approved or denied.
- Receive your loan funds. If approved, the lender will transfer the funds to your business bank account. This may also take a few days, so keep up with your balance to confirm when your loan funds are available.
There are also alternatives to equipment loans with similar processes. In some cases, an alternative may be faster than an equipment loan. Each loan type has its benefits and drawbacks, so it is important to research before applying.
Bankrate insight
It was revealed in the Federal Reserve’s 2024 Report on Employer Firms: Findings from the 2023 Small Business Credit Survey that 13 percent of financing applications were for auto and equipment loans.
The bottom line
Equipment financing is generally an efficient process from start to finish. Be prepared when you apply. This will streamline the process and help you secure quicker funding. And although every lender has its own timeline, in most cases, you can expect funding within one to two weeks after approval. Organization and choosing the right small business lender will have the biggest impact on how long it takes to get an equipment loan
