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How long it takes to get an equipment loan varies widely from 1 to 90 days, based on the lender you choose and the type of loan. Equipment loans are often needed by many business owners, so there are many options, from banks and online lenders to equipment manufacturers.
Large banks and SBA loans are usually the longest to get equipment loans, but offer the lowest interest rate. Online or alternative lenders may only take one day to be approved, but they may see higher rates than traditional banks.
Whichever option you choose, compare lenders to find the best conditions and rates for your business.
How long does it take to receive an equipment loan?
If you apply to the right lender and organize all your business documents, you can get an equipment loan within 24-48 hours. However, your funding timeline will vary depending on your lender and the type of loan you are using. Funding timelines range from one day of an online loan to a maximum of 90 days of an SBA loan.
However, compared to bank business loans, you can pay more interest on the speed of your online lender. Therefore, if you are not in a hurry for funds and eligibility, SBA or bank loans often have a more competitive rate.
Banks and Credit Unions
Banks and credit unions offer more competitive fees, but it may take some time to fund equipment loans. The entire process from application to fundraising can take a quick and fast time, either in a week or up to 30 days, depending on the lender.
In general, an application may require more documentation than other lenders. The underwriting process can take time as many banks use humans to evaluate loans, rather than the underwriting software used by many online lenders.
SBA Loan
SBA 7(a) and 504 loans have a typical financing time of 30-90 days. Express loans are much faster as SBA doesn’t have to directly approve the loan. Express Loan Timelines rely on the lender’s usual process to approve loans that can take more than a week.
Some SBA-approved alternative lenders can approve and fund equipment loans much faster than usual for SBA loans. Meanwhile, large national banks can take 30-90 days to fully fund your equipment loan.
Online lender
Online lenders can often approve equipment loans within 24-48 hours, making them the fastest financing option. Online lenders are also willing to work with startup businesses and business owners with poor credit scores of 500 people.
Lenders like Taycor Financial and Triton Capital will provide funding within a day. Balboa Capital may be able to fund the loan on the day you apply. The two lenders aren’t similar, so we recommend comparing the lender’s funding timeline with its terms and rates.
However, the process can take time if the lender needs to inspect the equipment or if there are no documents to submit when applying.
Manufacturer’s funding
Applying for funding through an equipment manufacturer may help you quickly fund your loan. Manufacturers or sellers usually have lenders who prefer the lenders they work for. Like all equipment loan options, it depends on the type of equipment and the seller itself.
Using in-house fundraising options can be faster, but as convenient, you may receive a higher rate.
The process for obtaining equipment loans
The process of obtaining an equipment loan is relatively simple. These are common loan options for businesses of all sizes, so you should be able to complete the process in a few steps.
- Please check the requirements. Every lender has its own eligibility requirements. For example, lenders can set specific times in their business, minimum credit scores, and minimum annual revenue. Before applying, make sure your business meets or exceeds the minimum.
- Compare lenders. In addition to general requirements, choose the best equipment loan based on each lender’s fees, processing time and interest rate. It is essential to find a low price and fee comparison to help you pay as low costs as possible for your equipment loan.
- Applies to multiple lenders. Once you have a small number of eligible lenders, you will complete your application. Having general business loan documents you need to submit and having these documents handy will speed up the application process.
- I’ll wait while I’m underwriting. Banks and SBA loans have longer underwriting periods than online or alternative lenders. You may need to wait several hours to 30 days before processing and approving or denying the application.
- I’ll receive your loan funds. If approved, the lender will transfer the funds to a business bank account. This process can also take several days, so take a look at your balance to see when your loan fund is available.
Conclusion
Choosing an organization and the right small business lender has the biggest impact on the time it takes to get an equipment loan. If it takes 1 to 90 days to obtain an equipment loan, banks and credit unions tend to take 1 week to 30 days. However, bank and SBA loans offer competitive fees while allowing you to pay higher interest on high-speed equipment loans.
Compare options with different lenders to find the best conditions and rates available along with the funding timeline you need.
