How Long To Receive an Equipment Loan?

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How long it takes to get an equipment loan can vary significantly, ranging from one day to 90 days based on the lender you choose and the type of loan. Since equipment loans are a frequent need for many business owners, you have many options from bank and online lenders to equipment manufacturers.

Larger banks and SBA loans typically take the longest to get an equipment loan, 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, spend time comparing lenders to find the best terms and rates for your business.

How long will it take to receive an equipment loan?

You can get an equipment loan as fast as within 24 to 48 hours if you apply with the right lender and have all your business documents in order. However, funding timelines vary between the type of lender and loan. Funding timelines can range anywhere from one day for online loans up to 90 days for SBA loans.

However, you may pay more in interest for the speed of an online lender compared to bank business loans. 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, they may take longer to fund an equipment loan. The entire process from application to funding could take as fast as a week or up to 30 days, depending on the lender.

In general, the application may be more intensive and require more documentation than other lenders. And the underwriting process could take longer because many banks use humans to evaluate a loan 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 depends on the lender’s usual process for approving loans, which can take a week or more.

Some SBA-approved alternative lenders can get your equipment loan approved and funded much faster than the normal for SBA loans. Meanwhile, large national banks may take the full 30 to 90 days to fund your equipment loan.

Online lenders

Online lenders can often approve equipment loans within 24 to 48 hours, making them the fastest funding option. 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. No two lenders are alike, so you’ll want to compare lenders’ funding timelines along with their terms and rates.

However, the process may take longer if the lender needs to inspect your equipment or you don’t have the documentation required to submit when applying.

Manufacturer financing

If you apply for funding through an equipment 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.

1. Check the requirements. Every lender has its own eligibility requirements. For example, the lender may set a specific time in business, minimum credit score and minimum annual revenue that it requires to work with you. Confirm that your business meets or exceeds the minimum before applying.
2. 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.
3. Apply with multiple 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, and having these documents on hand will speed up the application process.
4. 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.
5. Receive your loan funds. If approved, the lender will transfer the funds to your business bank account. This process may also take a few days, so keep up with your balance to confirm when your loan funds are available.

The bottom line

Organization and choosing the right small business lender will have the biggest impact on how long it takes to get an equipment loan. It can take anywhere from one day to 90 days to get an equipment loan, and banks and credit unions tend to take a week to 30 days. However, you may pay higher interest for fast equipment loans, while bank and SBA loans offer competitive rates.

Compare your options with different lenders to find the best terms and rates available along with the funding timeline you need.

Frequently asked questions

• How long after my loan is approved do I receive the money?

  It depends on the lender and how quickly your financial institution processes deposits. Typically, loan funds are available within one to two business days of the lender depositing the funds. However, your bank may take up to a week to process large deposits.

• What does an equipment loan cover?

  Equipment loans typically allow you to purchase new or used equipment with the loan funds. The loan is backed by the equipment as collateral, so you’ll likely be limited in how you can use the funds.

• How long is the average equipment loan?

  Equipment loan terms often range from one to five years. However, you can find some equipment loans that offer terms up to seven years. If you need longer terms, you may be able to get a standard term loan which offers terms up to 10 years or longer.