7 min read
Heavy Equipment Financing Rates in 2026: What You'll Actually Pay
By Christopher Chavez, Founder — Northwood Capital Group
Every lender advertises "rates as low as" — and almost nobody qualifies for the teaser number. Heavy equipment financing rates in 2026 realistically run from about 6% for a bank-grade credit file on new equipment to 20%+ for subprime borrowers buying older iron. Here's what actually sets your number.
2026 rate ranges by credit tier
| Credit tier | New equipment | Used equipment (5–10 yrs) | Typical down payment |
|---|---|---|---|
| 740+ FICO, 5+ years in business | 6–9% | 8–11% | 0–10% |
| 680–739 FICO, 2+ years | 8–12% | 10–14% | 10–15% |
| 620–679 FICO | 12–16% | 14–18% | 15–20% |
| 500–619 FICO (subprime) | 16–20%+ | 18–24% | 20–30% |
| Startup (under 2 years) | 12–18% | 15–22% | 20–30% |
These are market-wide ranges, not quotes — your actual rate depends on the specific deal. But if a quote lands far outside your tier's range, ask why.
The five factors that move your rate
- Credit score — the single biggest input. Moving from 640 to 700 can cut a rate by 3–5 points.
- Equipment age and hours — new machines get the best pricing; past 10 years old or 10,000 hours, expect the top of your tier's range.
- Time in business — two years of filed business returns is the line between "standard" and "story" underwriting.
- Down payment — more down means less lender exposure and better pricing, especially on subprime files.
- Term length — longer terms carry higher rates. A 36-month structure usually prices 1–2 points below a 60-month one.
Watch for factor rates dressed up as interest
Some working-capital products quote a "rate" of 1.25 or 1.35 — that's a factor rate, not APR, and it's a completely different (usually much more expensive) product. Equipment financing should always be quoted as an APR or a fixed monthly payment on an amortizing schedule. If you can't see the amortization, ask for it.
How to compare two financing offers
Compare total cost, not just rate: multiply the monthly payment by the term, add the down payment and any fees, and subtract the equipment price. That dollar figure is the true cost of financing. Also compare the tax side — a Section 179 deduction can offset a meaningful share of the cost in year one, and our $1 buyout lease vs. loan comparison shows how structure changes the math.
Get a real number on your machine
Northwood Capital Group finances heavy equipment nationwide — new, used, auction and private-party purchases, from $25,000 to $5 million. Start on the application page, review our construction equipment financing programs, or call (714) 679-8886 for a same-day quote.