Question 1

How new can my business be to qualify for equipment financing?

Accepted Answer

Most startup equipment financing programs require a minimum of 6 months in business. Some programs may work with businesses as new as 3 months if the owner has strong personal credit (650+) and relevant industry experience. Merchant Fund Express works with businesses that have been operating for at least 6 months.

Question 2

Do startups need a personal guarantee for equipment financing?

Accepted Answer

Most startup equipment financing does require a personal guarantee from the business owner since the business itself has limited credit history. The equipment also serves as collateral, so the personal guarantee is a secondary form of security. As your business builds credit and history, future financing may not require personal guarantees.

Question 3

What credit score do startups need for equipment financing?

Accepted Answer

Credit score requirements vary by lender. Traditional banks typically want 680+ for startup equipment loans. Alternative lenders like Merchant Fund Express may approve startups with scores as low as 550, especially if the business shows strong revenue and the equipment has good resale value.

Question 4

How much equipment financing can a startup get?

Accepted Answer

Startup equipment financing amounts typically range from $5,000 to $500,000, depending on your revenue, credit profile, time in business, and the type of equipment. Newer businesses generally start with smaller amounts and can increase their financing capacity as they build a repayment track record.

Question 5

Can I get startup equipment financing with no revenue yet?

Accepted Answer

Equipment financing with zero revenue is extremely difficult. Most lenders require at least some demonstrable revenue, typically $5,000-$10,000 per month minimum. If you are pre-revenue, consider alternatives like SBA microloans, personal loans, or equipment grants for new businesses.

Question 6

What types of equipment can startups finance?

Accepted Answer

Startups can finance virtually any type of business equipment including computers and IT infrastructure, commercial vehicles, restaurant and food service equipment, construction machinery, medical and dental equipment, manufacturing tools, salon and spa equipment, and more. The equipment must serve a clear business purpose.

Question 7

Is financing better for a startup?

Accepted Answer

Buying makes sense when equipment holds its value well and you plan to use it long-term. Many startups use a mix of both strategies.

Question 8

How long does the approval process take for startups?

Accepted Answer

At Merchant Fund Express, startup equipment financing applications typically receive a decision within 24-48 hours. Traditional banks may take 2-4 weeks. Having all documentation ready including bank statements, equipment quotes, and business plan can significantly speed up the process.

Question 9

Can I finance equipment before opening my business?

Accepted Answer

Pre-opening equipment financing is available but limited. You typically need to have your business legally formed (LLC, corporation, etc.), have a detailed business plan, and the owner needs strong personal credit (usually 680+). SBA loans and some equipment vendors offer pre-opening financing options.

Question 10

Will startup equipment financing help build my business credit?

Accepted Answer

Yes, equipment financing is one of the best ways to establish business credit for a startup. On-time payments are reported to business credit bureaus, creating a positive payment history. This credit history helps your startup qualify for better financing terms and larger amounts in the future.

Explore More Equipment Financing Options