# Subprime Credit Equipment Financing (600 to 639)

Canonical URL: https://fundmyequipment.com/learn/credit-tier/subprime-credit/
Last modified: 2026-05-29T19:39:17+00:00
Type: efin_credit_tier

## Summary

Equipment financing for subprime credit profiles (FICO 600 to 639). Specialty lender programs, larger down payments, shorter terms.

## Content

Sub-prime credit (FICO 600-639) requires specialty equipment lenders. Approval is achievable with strong compensating factors, but expect higher rates, larger down payments, and shorter terms than prime applicants.

What to expect

Typical APR17-22%
Typical term24-48 months
Down payment15-25%
Time to fund3-7 business days


Compensating factors that get you approved

Strong revenue. $40K+/month in business deposits
Time in business. 3+ years
Larger down payment. 25%+ down dramatically improves odds
Equipment with strong resale value. Trucks, construction, heavy manufacturing
Co-signer with stronger credit. Can move you into fair-credit pricing
Clean recent bank statements. No NSF, no overdrafts, stable revenue


Watch the high-cost trap
Some "sub-prime equipment financing" is actually merchant cash advance or revenue-based financing disguised. Red flags:

Factor rate quoted instead of APR (e.g., "1.30 factor on $50K" = ~50% APR equivalent)
Daily or weekly ACH payments instead of monthly
Term measured in months less than 12
Upfront fees before approval

Real sub-prime equipment financing quotes APR, has monthly payments, term of 24+ months, and equipment as the primary collateral.

Refinance path
Many sub-prime borrowers refinance into prime rates after 12-18 months of clean payments. Steps:

Take the sub-prime loan for the equipment you need now
Pay on time every month (set up auto-pay)
Pay down revolving balances
Build business tradelines
At month 12-18, get a new soft-pull pre-qualification and refi into a lower rate


Apply at /apply/ for soft-pull pre-qualification with sub-prime-friendly partner lenders.