Equipment lenders pull the owner's personal credit on nearly every deal under about $250,000, because the owner signs a personal guarantee. The business credit file matters on larger deals and older companies. For most contractors and owner-operators, the personal FICO is the number that sorts the file.
What each band gets
What the same machine costs by band
| Structure | Financed | Term | Strong credit | Average credit | Challenged or start-up |
|---|---|---|---|---|---|
| $50,000 machine, 10% down, 60 months | $45,000 | 60 mo | $932/mo | $1,022/mo | $1,140/mo |
| $50,000 machine, 20% down, 48 months | $40,000 | 48 mo | $994/mo | $1,071/mo | $1,173/mo |
Illustrative estimates, not offers or quotes. Real payments depend on the funding program, credit, time in business, down payment, equipment age, and documentation fees. Run your own numbers in the payment calculator.
Three things that move a file more than 20 points of score
- What is on the report, not just the number. A 640 with a paid medical collection is a different file from a 640 with a repossession 14 months ago. Lenders read the tradelines. Recent equipment or auto repossessions and open tax liens are the two items that close doors regardless of score.
- Time in business. Two years is the line most programs draw. Above it, a 620 gets approved routinely. Below it, the same 620 needs a down payment and a story.
- Cash in the deal. A 600 with 20 percent down often prices better than a 660 with nothing down. The down payment is the one lever you control the week you apply.
What does not help
- Applying everywhere. Each lender pulls credit. Five hard inquiries in a month drop the score and mark the file as shopped. One application, reviewed on a soft pull, and one hard pull when you accept.
- Paying down cards the day before. Bureaus update monthly. A payment made this week shows up next month. Do it 30 to 45 days before you apply.
- A co-signer with great credit and no income. Lenders want a guarantor who could actually pay. Credit without cash flow adds little.
Lenders make their own credit decisions and set their own terms. Nothing here is an offer of credit or tax advice.
Questions we get
What is the minimum credit score for equipment financing?
Around 500 for subprime programs, 600 to 620 for most independent lenders, and 700 or better for bank pricing. Below 500 the file usually needs a large down payment or a co-signer with strong credit and income.
Do lenders check business credit or personal credit?
Personal credit on most deals under about $250,000, because the owner guarantees the contract. Business credit matters more on larger deals and on companies with several years of history.
Does a soft pull affect my score?
No. A soft inquiry is not visible to other lenders and does not change the score. The hard pull happens once, with the lender you choose, when you accept an offer.
How fast can a score improve?
Paying revolving balances under 30 percent of the limit can move a score 20 to 40 points in one reporting cycle, about 30 to 45 days. Collections and late payments take longer to fade.
