An equipment collateral loan borrows against machinery you already own rather than financing a purchase, which makes it one of the few ways a business with assets and no spare cash can raise working capital without giving up equity or a receivable. It is sometimes called asset refinancing or a sale and leaseback, and the mechanics differ enough between those to be worth separating.
Refinance, sale and leaseback, and a straight charge
In a refinance the lender takes security over equipment you own and advances against its value; you keep title and keep using it. In a sale and leaseback you sell the machine to the funder and lease it back, so title moves and the accounting changes. A straight charge over assets is neither: it is a general security taken by a lender making an unsecured-looking loan, and it is worth knowing when that is what has happened. All three release cash from the same machine, and they differ in who owns it and what appears on your balance sheet.
What a lender will advance
A percentage of a conservative valuation, not of what you paid. Expect a valuation on anything substantial and expect the funder to discount for age, hours and specialisation exactly as it would on a purchase. Equipment already subject to finance can often still be refinanced, with the existing agreement settled from the advance, which means the useful figure is the equity you hold rather than the machine's value. Work that out before you apply; it is the number that decides whether the exercise is worth doing.
Why this page names no best equipment loans
This site's compliance position forbids presenting a ranking as a judgement of merit, and there is no honest single answer anyway: the best facility for a plant hire firm refinancing a fleet is not the one for a clinic buying a scanner. What this record does instead is publish what each lender says about itself. Nine of twenty-six publish an eligibility bar, the median published minimum credit score is 600 and the range is 500 to 625, and no lender in the record publishes a rate. That is a shortlist you can build; a ranking would be an opinion sold as a fact.
Questions people ask about equipment collateral loans
Can I borrow against equipment I already own?
Yes, as an equipment refinance or a sale and leaseback. The lender advances a percentage of a conservative valuation, and where the machine still carries finance the existing agreement is usually settled from the advance, so what you can raise is the equity rather than the value.
Which is the best equipment loan?
This record does not rank lenders on merit and is not permitted to. What it publishes is what each lender says about its own requirements, so you can see in advance which ones would look at a business like yours and shortlist from there.
Does refinancing equipment affect how I use it?
Usually not day to day: in a refinance you keep title and keep operating the machine. In a sale and leaseback title moves to the funder, which changes the accounting and can restrict modification or sale, so read what the agreement says about both.