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How equipment lenders make credit decisions

Published October 5, 2026

Every lender weighs risk a little differently, but most look at the same few things.

The business

• Time in business and industry experience.
• Financial strength, shown through financial statements, tax returns or bank statements.
• Cash flow, meaning whether the business can comfortably cover the new payment.

The owners

• Personal and business credit history.
• Owners are often asked for a personal guarantee, especially for smaller or newer businesses.

The equipment

• New or used, age, condition and how easily it could be resold.
• Its role in the business: does it produce revenue?
• How the price compares with the value of the equipment.

The deal

• Down payment or other security.
• Term length compared with the equipment’s useful life.
• Whether it is a purchase, a refinance or a sale-leaseback.

How to prepare

1. Gather recent financial statements and bank statements.
2. Have the equipment quote or invoice ready.
3. Be ready to explain how the equipment will pay for itself.
4. Check your credit report for errors before applying.
5. Apply to lenders that suit your profile rather than applying everywhere at once. Multiple credit inquiries can add up.