Through more than 100 equipment lenders, Rainstar Capital Group arranges equipment loans and leases ranging from $5,000 to $100 million. Its programs reach startups, borrowers with challenged credit and collateral-based deals that involve no credit check. Some lenders issue credit decisions within hours, while bigger transactions typically take two to three weeks to close.

Based in Grand Rapids, Michigan, Rainstar is a debt advisory firm whose platform includes more than 250 registered lenders. It finances new and used equipment for businesses in transportation, construction, farming, manufacturing, medical care and technology, and it also helps companies turn equipment they already own into cash.

Any financing remains subject to lender approval, underwriting, documentation and program terms. Rainstar Capital Group acts as a commercial financing intermediary and is not the direct lender on each transaction.

Equipment Funding Snapshot

• Amounts: $5,000 to $100 million, with individual lenders starting from $1,000.

• Structures: equipment loans (EFAs), $1 buyout leases, fair-market-value (FMV) leases and sale-leasebacks.

• Credit: the best rates tend to go to scores of 670 or higher, while collateral lenders may skip the credit check.

• New businesses: a number of lenders will look at them.

• Money down: from 0% up to 50%, based on the credit and collateral involved.

• Length: usually between 12 and 84 months.

• Speed: credit decisions in 1 to 24 hours at several lenders, and two to three weeks for larger deals.

• Equipment: many lenders accept new or used items and private-party sales.

These figures are examples drawn from current lender programs and are not offers. What a business actually gets rests on its credit, the equipment, the lender and underwriting.

How Equipment Financing Works

With equipment financing, a business gets machinery, vehicles or technology now and pays for them over time. Because the equipment serves as the main collateral, this kind of loan is often easier to get than one with no collateral.

Once the business has picked its equipment, the vendor is paid by the lender and the business makes fixed payments for the full term. A loan or $1 buyout lease ends with the business owning the equipment. A fair-market-value lease leaves three choices at the end: buy the equipment, return it or upgrade.

Equipment Loan vs Lease: Comparing the Structures

• Equipment loan or EFA: the business owns the equipment from day one and makes higher payments. This often suits long-life equipment it plans to keep.

• $1 buyout lease: the lessor holds ownership until the business buys the equipment for $1 at the end. Payments are higher, and it works much like a loan on lease paperwork.

• 10% purchase option: the lessor owns the equipment, payments run slightly lower and the business can buy it for 10% at the end, which balances cost and ownership.

• Fair-market-value (FMV) lease: the lessor owns the equipment and payments are the lowest. At the end the business can buy at FMV, return it or upgrade, which often suits technology that ages quickly.

• TRAC lease: the lessor owns the vehicle, payments are lower and a pre-set residual applies at the end. It is often used for titled trucks and trailers.

Tax treatment varies with the structure, so confirm the details with a CPA before choosing.

Startup Equipment Financing: What New Companies Should Know

Is Equipment Financing Possible for a New Business?

It can. With the equipment securing the deal, several lenders on Rainstar's platform will consider companies that have little or no operating history. For these applicants, lenders put more weight on the owner's personal credit and industry experience, the down payment and the equipment's resale value.

What Startup Lenders Review

• Personal credit: programs open to startups generally want a score near 600 or above.

• Cash down: 10% to 25% is common, with more expected when credit is weaker or the equipment is specialized.

• Industry experience: time spent working in the field, as with a CDL driver purchasing a first truck.

• A plan: customers, contracts or a written plan showing how the equipment will bring in money.

• Bank statements: personal or business statements that show reserves.

Startup Equipment Financing Options

• Startup-friendly lenders: trucks, trailers and machinery are the focus of one lender on the platform, which funds startups with a 600+ score for up to $125,000; a second approves startups for amounts from $1,000 to $200,000.

• Programs for new businesses and weaker credit: these lenders look at the whole story and can cover used equipment.

• Collateral-based lenders: a larger down payment takes the place of a credit and income review.

• Financing through a dealer or vendor: for standard equipment, this is sometimes the quickest path.

• SBA loans: buyers who qualify get lower rates but face more paperwork.

How a New Business Can Improve Its Chances

1. Register an LLC or corporation and get a dedicated business bank account.

2. Increase the down payment or offer more collateral.

3. Choose equipment with a strong resale market.

4. Bring evidence of demand, such as signed contracts, purchase orders or customer commitments.

5. Correct any errors on the owner's personal credit report before applying.

Bad Credit Equipment Financing and No Credit Check Options

Challenged credit does not rule out every option, since collateral-based lenders may still be able to help. One lender on Rainstar's platform lends purely against collateral: credit carries no weight, approvals generally come within eight hours, and deals need 40% to 50% down. On bigger deals of $400,000 to $5 million, another skips both the credit and income checks and advances as much as 80% of what the equipment would bring in a forced liquidation.

The price of that flexibility is more money down and a higher rate. Better credit by the time of a second purchase usually brings the cost down.

Equipment Sale-Leaseback and Cash-Out Options

A business that owns equipment free and clear, or holds equity in it, can use a sale-leaseback or equipment refinance to turn it into working capital. For construction, agricultural and manufacturing companies, one lender on the platform offers sale-leasebacks and working capital at roughly 50% of value. Another wants total collateral worth at least double the net funding. The business keeps using the equipment and makes monthly payments.

Types of Equipment Rainstar's Lenders Finance

Heavy Equipment and Construction Machines

New or used excavators, loaders, dozers, cranes, and paving and drilling equipment.

Trucks, Trailers and Work Vehicles

Semi, box and dump trucks plus trailers, with bad-credit truck programs among the options.

Equipment for Medical and Dental Practices

Imaging systems, dental chairs, and lab and diagnostic equipment, through specialist lenders in the medical field.

Restaurant Equipment and Food Service

Ovens, refrigeration, complete kitchens and point-of-sale systems.

Machinery for Manufacturers

Presses, CNC machines, packaging equipment and whole production lines, plus corporate financing for large-ticket purchases.

Farm and Agricultural Equipment

Combines, tractors, greenhouse equipment and irrigation systems.

IT, Telecom and Other Technology

Computers, servers, software and telecom systems, which often go on fair-market-value leases.

Fitness, Energy and Specialty Assets

Gym equipment, alternative-energy systems and other specialty items.

Used Equipment and Private-Party Sales

Used equipment is financed by many lenders, and some will fund a purchase from a private seller, within limits on age and condition that vary.

Shipping, Installation, Training and Other Soft Costs

Some lenders roll delivery, installation, software and training into the loan, generally capped at a share of the total cost. It is worth asking before buying.

Why Equipment Transactions Do Not Get Completed

A deal usually falls through for one of a handful of reasons. Each comes down to whether the request fits a particular lender's requirements.

• Cash flow is not strong enough for the lender.

• The down payment is smaller than the lender requires.

• The equipment is too old, since some lenders do not finance older equipment.

• The equity position in the equipment is not acceptable to the lender.

• The borrower expects a lower rate than the lender will offer for that credit profile.

• The credit score does not meet the lender's requirement.

What Lenders Usually Ask For

To apply for equipment financing through Rainstar Capital Group, a business will generally need the following. Other documents may be requested depending on the amount needed.

• A signed application

• Six months of business bank statements

• A quote or invoice for the equipment

• A credit report

• A list of equipment the business currently owns

Program Terms Can Change

Direct lenders and fund managers change their underwriting criteria and loan terms from time to time. Rainstar Capital Group updates its lender profiles from information the lenders provide, but it makes no claim as to the accuracy of those terms, and programs, interest rates and loan-to-value limits remain subject to each lender's underwriting.

Explore Equipment Funding With Rainstar Capital Group

Businesses can review lender programs and requirements on Rainstar Capital Group's equipment funding page, and a broader overview is available in the equipment and machinery financing guide. All financing is subject to lender approval, underwriting, documentation and program terms, and Rainstar is a commercial financing intermediary, not the direct lender for each transaction.