You've decided you need a CNC machine for your shop. Maybe it's your first CNC mill, or you're upgrading to a multi-axis machining center. Either way, you're looking at $30,000 to $500,000+ in equipment costs.
Unless you're sitting on a pile of cash, you'll need financing. The good news? Getting a CNC machine loan is straightforward if you know the process and come prepared.
This guide gives you the exact steps to get approved—from understanding what lenders look for to submitting your application and closing the deal. By the end, you'll know exactly what to do to secure financing for your CNC equipment.
Quick Facts About CNC Machine Loans
Loan Amounts
$25K - $500K+
Based on equipment cost
Approval Time
1-5 Days
With documents ready
Interest Rates
5.99% - 20%
Based on credit score
In This Guide
- 1. The 7-Step Process to Get a CNC Machine Loan
- 2. What Lenders Look For
- 3. Credit Score Requirements
- 4. Required Documents Checklist
- 5. Types of CNC Machine Lenders
- 6. Loan Costs and Payment Examples
- 7. How to Improve Your Approval Odds
- 8. Common Application Mistakes
- 9. Getting a Loan with Bad Credit
- 10. Complete Timeline (Application to Delivery)
- 11. Frequently Asked Questions
- 12. Your Action Plan
The 7-Step Process to Get a CNC Machine Loan
Getting a CNC machine loan follows a predictable process. Here's exactly what to do, step by step:
1Check Your Credit Score
Before you do anything else, know where you stand. Your credit score determines your interest rate, down payment requirements, and whether you'll get approved at all.
What to Check:
- • Personal credit score (FICO or VantageScore)
- • Business credit score (if you have one)
- • Credit report for errors or issues
Excellent (720+)
Best rates (5.99-8.99%), lowest down payment, fast approval
Good (680-719)
Competitive rates (9-12%), 15-20% down
Fair (620-679)
Higher rates (12-16%), 20-25% down
Poor (Below 620)
Bad credit lenders only, 16-20%+ rates, 25-30% down
Pro tip: Check your credit for free at AnnualCreditReport.com or through Credit Karma. If you find errors, dispute them before applying—it can boost your score by 20-50 points.
2Determine Your Budget
Figure out how much you can realistically afford to borrow. Don't just focus on monthly payments—consider your total debt load relative to revenue.
The 40% Rule:
Your total monthly debt payments (including the new CNC loan) shouldn't exceed 40% of your monthly revenue. This ensures you have enough cash flow to handle the payments even during slow months.
Budget Calculation Example:
Average monthly revenue: $50,000
Maximum debt payments (40%): $20,000
Current debt payments: $12,000
Available for CNC loan: $8,000/month
At 8% over 5 years, $8,000/month = $395,000 borrowing power
3Choose Your CNC Machine
Before you can apply for a loan, you need to know exactly what equipment you're buying. Lenders require specific details about the CNC machine.
What Lenders Need to Know:
- • Exact make and model
- • New or used (if used: year, condition, hours)
- • Purchase price
- • Dealer or seller information
- • Equipment specs and features
Get a formal quote or invoice from the dealer. This serves as proof of price and equipment details for your loan application.
Important: If buying used, get an inspection report and maintenance records. Lenders want to see the machine is in good working condition before approving the loan.
4Gather Required Documents
This is the step most people underestimate. Having all your documents organized and ready speeds up approval by 3-5 days.
Business Documents:
- Last 2-3 years of business tax returns
- Current P&L statement (year-to-date)
- Balance sheet
- 3-6 months of bank statements
- Business license
- Articles of incorporation / LLC docs
Personal & Equipment:
- Personal tax returns (2 years)
- Personal financial statement
- Driver's license or government ID
- Equipment quote or invoice
- Equipment specs sheet
- Photos & inspection (if used)
Time-saver: Create a folder (digital or physical) with all these documents before you start applying. You'll use the same documents for every lender, so having them organized saves hours.
5Apply to Multiple Lenders
This is critical: never take the first offer. Interest rates can vary by 2-5% between lenders for the same borrower. On a $100,000 loan, that's $10,000+ in savings.
Apply to These 3-5 Lenders:
- 1. Your current bank (if you have a good relationship)
- 2. Equipment financing company (specialists get better rates)
- 3. Online lender (fastest approval, competitive rates)
- 4. CNC manufacturer financing (sometimes offers promotions)
- 5. Credit union (often has lower rates for members)
Most applications take 15-30 minutes to complete online. You'll upload your documents and provide basic business information.
Credit inquiry concern? Don't worry. Multiple loan applications for the same type of financing within 14-45 days typically count as a single inquiry on your credit report.
6Review and Compare Offers
You'll receive loan offers within 1-5 business days. Don't just look at the monthly payment—compare the total cost of financing.
What to Compare:
- Interest rate (APR) - Lower is better
- Loan term - Shorter = less total interest
- Monthly payment - Must fit your cash flow
- Down payment required - Affects cash on hand
- Total interest paid - True cost of the loan
- Fees - Origination, documentation, etc.
- Prepayment penalties - Can you pay off early?
Example Comparison:
Offer A: $100K at 7% for 5 years = $1,980/mo, $18,800 total interest
Offer B: $100K at 9% for 7 years = $1,576/mo, $32,384 total interest
Offer A saves $13,584 despite higher monthly payment!
7Accept Offer and Close
Once you've chosen the best offer, it's time to finalize the loan and get your CNC machine.
Closing Steps:
- 1. Review the loan agreement - Read everything carefully
- 2. Ask questions - Clarify anything you don't understand
- 3. Sign the agreement - Often done digitally (DocuSign, etc.)
- 4. Provide down payment - Wire transfer or check
- 5. Coordinate delivery - Lender pays dealer directly
- 6. Take possession - Inspect equipment upon delivery
- 7. Start making payments - Usually first payment in 30 days
Final tip: Before signing, confirm there are no prepayment penalties. If your business does well, you'll want the option to pay off the loan early and save on interest.
Calculate Your CNC Machine Loan Payment
Use our equipment loan calculator to estimate your monthly payment based on the loan amount, interest rate, and term length you're considering.
Calculate PaymentWhat Lenders Look For When Approving CNC Machine Loans
Understanding what lenders evaluate helps you present yourself as a strong borrower. Here are the four main factors that determine approval:
1. Credit Score (Personal & Business)
Your credit score is the single biggest factor. Most lenders check both personal and business credit (if applicable).
Weight: 35-40% of decision
Minimum: 600-650 for most lenders (550 for bad credit lenders)
Sweet spot: 700+ for best rates and terms
2. Time in Business
Lenders want to see you've been operating successfully for a while. The longer you've been in business, the lower your risk.
Weight: 20-25% of decision
Minimum: Most lenders prefer 2+ years
Startups: Can qualify with strong credit and larger down payment (30-40%)
3. Revenue & Cash Flow
Lenders analyze your revenue and cash flow to ensure you can afford the monthly payments. They calculate your debt-to-income ratio.
Weight: 25-30% of decision
Preferred: Debt payments ≤ 40% of monthly revenue
Minimum revenue: Most lenders want $250K+ annual (varies by loan size)
4. Down Payment & Collateral
Your down payment shows skin in the game. The CNC machine itself serves as collateral, which reduces lender risk.
Weight: 10-15% of decision
Typical: 10-20% down for good credit, 20-30% for weaker credit
Benefit: Larger down payment can offset weak credit or limited time in business
The Formula Lenders Use
Most lenders score you on these four factors. If you're strong in 3 out of 4 categories, you'll likely get approved. For example:
- • Excellent credit + 3 years in business + strong revenue = Approved at best rates (even with 10% down)
- • Fair credit + 1 year in business + decent revenue + 30% down = Approved at higher rates
- • Poor credit + startup + weak revenue + small down payment = Denied
Credit Score Requirements for CNC Machine Loans
Your credit score directly impacts your interest rate, down payment, and whether you get approved. Here's what to expect at each credit tier:
Excellent Credit (720+)
Interest Rates
5.99% - 8.99%
Down Payment
10-15%
Approval Time
1-2 days
What you get:
- • Lowest interest rates available
- • Up to 100% financing possible
- • Longest terms (up to 7 years)
- • Fastest approval process
- • Best negotiating power
Good Credit (680-719)
Interest Rates
9% - 12%
Down Payment
15-20%
Approval Time
2-4 days
What you get:
- • Competitive rates
- • 80-90% financing typical
- • 5-7 year terms available
- • Good selection of lenders
- • Straightforward approval
Fair Credit (620-679)
Interest Rates
12% - 16%
Down Payment
20-25%
Approval Time
3-5 days
What you get:
- • Moderate rates (still affordable)
- • 75-80% financing typical
- • 5 year terms common
- • Equipment financing specialists best bet
- • May need to explain credit issues
Poor Credit (Below 620)
Interest Rates
16% - 20%+
Down Payment
25-30%
Approval Time
5-7 days
What you get:
- • Higher rates (but still possible)
- • 70-75% financing typical
- • 3-5 year terms
- • Need bad credit specialist lenders
- • May require co-signer or additional collateral
Credit Below 620? You Still Have Options
Bad credit doesn't automatically disqualify you. Alternative lenders specialize in working with challenged credit. See the Bad Credit section below for specific strategies to get approved.
Complete Document Checklist for CNC Machine Loan Applications
Having all required documents ready before you apply is the #1 way to speed up approval. Here's your complete checklist:
Business Financial Documents
Business Tax Returns (2-3 years)
Most recent 2-3 years. Must be complete with all schedules.
Profit & Loss Statement (YTD)
Current year-to-date P&L. Should be no more than 60 days old.
Balance Sheet
Shows assets, liabilities, and equity. Current within 90 days.
Business Bank Statements (3-6 months)
Recent statements showing cash flow and revenue deposits.
Business License
Current and active. Must match your legal business name.
Articles of Incorporation / LLC Formation Documents
Proves business structure and ownership.
Personal Financial Documents
Personal Tax Returns (2 years)
For all business owners with 20%+ ownership stake.
Personal Financial Statement
Lists personal assets, liabilities, and net worth. Most lenders provide a form.
Government-Issued ID
Driver's license or passport. Must be current and not expired.
Equipment-Related Documents
Equipment Quote or Invoice
From the dealer showing exact price, make, model, and specifications.
Equipment Specifications Sheet
Technical specs, features, and capabilities of the CNC machine.
Photos & Inspection Report (Used Equipment Only)
Professional inspection report, photos, hour meter reading, maintenance records.
Serial Number & VIN
Required for UCC lien filing. Get this from dealer or seller.
Document Organization Tip
Create a folder (Google Drive, Dropbox, or physical folder) labeled "CNC Loan Documents" and keep everything organized. You'll submit the same documents to every lender, so having them ready saves hours of searching for files.
Pro tip: Scan physical documents to PDF. Most lenders accept digital uploads, which speeds up the process significantly.
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Read GuideCNC Loan with Bad Credit
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View Bad Credit GuideEquipment Loan Calculator
Calculate monthly payments, total interest, and create amortization schedules.
Use CalculatorReady to Get Your CNC Machine Loan?
Follow the 7 steps in this guide and you'll have your CNC machine financed and delivered in as little as 7-14 days.