# No Money Down Equipment Financing

Canonical URL: https://fundmyequipment.com/learn/no-money-down-equipment-financing/
Last modified: 2026-05-29T19:39:17+00:00
Type: efin_guide

## Summary

No Money Down Equipment Financing. Comprehensive guide.

## Content

No-money-down equipment financing is available for excellent-credit borrowers on new equipment. For sub-prime credit, used equipment, or first-time buyers, expect to put 10-30% down. The "zero down" claim is real for some buyers; aspirational for others.

Who qualifies for zero down

FICO 720+ (excellent credit)
2+ years in business
Strong revenue (10x+ monthly equipment payment in deposits)
New equipment from major OEM (Caterpillar, John Deere, Volvo, Kenworth, etc.)
Equipment with strong resale market
Established relationship with the lender or dealer


Who doesn't qualify for zero down

Sub-prime credit (under 650 FICO)
Newer business (under 2 years)
Used equipment (especially older or private-party)
First-time business owners
Specialty equipment with thin resale markets
Industries with restricted lender appetite


What "no money down" actually means
Zero down doesn't mean zero cash at closing. Expect to pay:

First payment in advance (sometimes 2 months upfront)
Doc fee ($150-500)
Insurance binder premium
Sales tax at delivery (in most states; some allow tax to be financed)
UCC filing fee (small)

Total cash-at-closing for "zero down" can still be $1,500-5,000 depending on the deal.

Trade-offs of zero down

Higher monthly payment. 100% financed = more principal to amortize.
Slightly higher rate. Some lenders price 100% LTV at 0.25-0.5 points above 90% LTV.
Underwater risk. Equipment depreciates faster than principal amortizes; you may owe more than the equipment is worth for the first 12-24 months.
Refinance limitation. Hard to refi during the underwater period.


When zero down makes sense

You have other higher-yield uses for the down-payment cash (paying off high-interest debt, working capital for inventory, etc.)
The equipment will generate enough revenue to cover the higher monthly payment
You qualify for the best rate tier (so the small rate premium is minimal)
You plan to keep the equipment long-term (so the underwater period passes)


When down payment is worth it

You want lower monthly payment for cash-flow predictability
You want lower total interest paid
You want flexibility to refinance early
You're unsure about the equipment fit and want a smaller commitment


Sub-prime "no down" scams to watch for
Some sub-prime lenders advertise "no money down" but bake the missing down payment into the equipment price:

Equipment list price inflated by 10-20%
Lender finances the inflated price
You appear to put zero down but actually paid the down payment as embedded markup

Always confirm the cash price independently. Get a written cash-price quote and a separate written financed-price quote; if they differ materially, that's the markup.

The middle ground
For most borrowers, putting some down is the right answer:

5-10% down: typical for prime credit on new equipment. Modest cash, escapes underwater quickly.
15-20% down: typical for fair credit or used equipment. Stronger lender approval, better rate.
25%+ down: typical for sub-prime, startup, or specialty equipment. Almost always required.


Apply for soft-pull pre-qualification at /apply/.Last reviewed: May 28, 2026. Not tax or legal advice.