Equipment · Chicago, IL
Equipment Financing & Loans in Chicago, IL
Equipment bought in Chicago usually carries the city's combined 10.25 percent sales tax. Illinois exempts machinery and equipment used primarily, meaning more than half the time, in manufacturing or assembling goods for sale, if the buyer gives the seller an exemption certificate. Which applies changes the amount you need to finance.
Check business eligibilityFunding specialists, not a lender. No approval guarantee.
Updated October 30, 2026
Decision guide
Equipment financing in Chicago: the 10.25% tax or the manufacturing exemption
A good fit when
- An equipment loan for equipment you will keep for most of its life.
- A lease for equipment you will replace in a few years.
- SBA 504 for major, long-life equipment.
- Form ST-587 for qualifying manufacturing equipment.
Look elsewhere when
- Paying tax on equipment that qualifies for the exemption.
- Claiming the exemption without records of how the equipment is used.
- A term longer than the equipment's useful life.
- A merchant cash advance for equipment.
| Situation | Tax |
|---|---|
| Taxable purchase at 10.25% | About $15,375 |
| Qualifying manufacturing equipment with ST-587 | $0 |
Illustrative only. Keep records showing the equipment is used more than 50% in manufacturing or assembling.
The exemption in practice
Since July 2019 the Illinois exemption also covers production-related items such as supplies, consumables and hand tools used primarily in manufacturing. The purchaser certifies eligibility to the seller on Form ST-587.
Get every cost in writing
Illinois has no commercial-financing disclosure law. Ask every provider for the total of payments, fees and end-of-term options.
Official sources (checked October 19, 2026): Illinois Department of Revenue: documenting exempt manufacturing purchases.
What a funding specialist adds. Nowbiz checks tax and exemptions before sizing equipment financing and compares loan and lease offers. The provider sets eligibility and terms.
Prepare
Documents that settle the decision
- Equipment quote with tax shown separately
- ST-587 exemption certificate, if it applies
- Two years of business tax returns for larger amounts
- A list of existing equipment loans and leases
- Three to six months of business bank statements
Local funding context
Why Chicago, IL businesses consider equipment financing
Chicago is the Midwest’s commercial capital and one of the largest small-business cities in the country: a restaurant scene that spans every neighborhood and cuisine, professional and financial firms in the Loop, the nation’s busiest rail and intermodal freight hub with thousands of trucking and logistics companies, hospital systems and medical practices, a deep construction trade, and commercial corridors from Pilsen to Devon Avenue to Bronzeville packed with immigrant- and minority-owned businesses.
Restaurants finance kitchen equipment on multi-year terms and use lines and term loans to bridge winter and refinance stacked advances; trucking companies serving the intermodal yards finance tractors and chassis and factor freight invoices; contractors factor invoices owed by developers, the city and institutions and finance equipment; medical and dental practices finance equipment and buildouts through SBA lenders; professional firms use lines to hire ahead of engagements. The SBA’s Illinois district office is downtown.
Equipment financing in local practice. In Chicago, carriers and owner-operators finance tractors, trailers and reefers with the truck as collateral, often with mileage and age limits; contractors finance excavators, skid steers, lifts and work trucks against the equipment itself, protecting bonding capacity. Medical practices finance imaging, exam-room and lab equipment on five-to-seven-year terms that match reimbursement cycles.
What to evaluate
- New or used business equipment may qualify
- The financed asset commonly supports the transaction
- Terms can be aligned with the asset's useful life
- Vehicles, kitchen, medical, manufacturing, and technology equipment may be considered
| Sector | Local driver | Products commonly considered |
|---|---|---|
| Restaurants and bars | City wage floor, winter lull, equipment | Equipment loans, lines, term loans |
| Contractors | City, institutional and developer receivables | Factoring and equipment financing |
| Medical and professional practices | Buildouts, equipment, hiring | SBA 7(a), equipment loans, lines |
Local numbers
Chicago business and SBA lending figures
The Census Bureau counted 134,513 business locations with paid employees in Cook County, which includes Chicago, in its 2023 County Business Patterns, and 74% of them had fewer than 10 employees. Average annual payroll was $83,100 per employee across 2,492,328 jobs.
In the SBA's 2026 fiscal year (October 2025 through September 2026), 100 lenders approved 785 SBA 7(a) loans totaling $442.6 million for businesses in Cook County, an average of $564,000 per loan. By number of loans, the most active were The Huntington National Bank (151 loans); U.S. Bank, National Association (82 loans) and Newtek Bank, National Association (59 loans). Certified development companies approved 102 SBA 504 loans totaling $104.7 million for real-estate and equipment projects there; the most active was Small Business Growth Corporation.
How to use these numbers: they describe the local market, not your odds. SBA figures count only loans the SBA guarantees, and a business is approved on its own revenue, credit and cash flow, whichever product it applies for, including equipment financing. A lender that is already active in the county is a reasonable place to ask about SBA options before comparing faster, costlier products.
| Measure | Cook County |
|---|---|
| Employer business locations (2023) | 134,513 |
| Share with fewer than 10 employees | 74% |
| SBA 7(a) loans approved, FY2026 | 785 ($442.6 million) |
| Lenders making SBA 7(a) loans here, FY2026 | 100 |
| SBA 504 loans approved, FY2026 | 102 ($104.7 million) |
Sources: U.S. Census Bureau, County Business Patterns 2023; U.S. Small Business Administration, 7(a) Lender and 504 CDC Activity Reports, FY2026 (data as of September 30, 2026, by project county). County figures include the whole county, not only Chicago.
Local rules and help
What to check in Illinois before you apply
| Factor | Detail |
|---|---|
| Where business liens are filed and searched | Illinois Secretary of State |
| SBA district office | Illinois: 332 S. Michigan Avenue, Suite 600, Chicago, IL 60604 |
Checked October 15, 2026 against official sources: Illinois Secretary of State, SBA Illinois District Office. Confirm current rules before relying on them.
How it works
How equipment financing works in Chicago, IL
Equipment financing is a purchase-money structure: a lender or lessor pays the vendor for a defined piece of equipment, and the business repays a fixed schedule over a term matched to the useful life of that asset. The equipment itself is the primary collateral, which is why underwriting leans on the invoice, the asset type, its resale market and its age rather than purely on the owner’s credit file. A Chicago contractor buying a used excavator and a dental practice financing a new CBCT scanner go through the same basic mechanics even though the assets could not be more different.
The full guide to equipment financing in Illinois covers the mechanics, the application review checklist, the timeline, best uses and watch-outs in depth.
Cost structure
What equipment financing costs: a $152,000 worked example
Compare the deposit, amount financed, payment schedule, fees and ownership at the end of a loan or lease. Ask whether delivery, installation and insurance are financed or paid separately. Used equipment and private-seller purchases need provider confirmation.
Hypothetical example for Chicago, IL: using $152,000 and the rate and repayment assumptions stated in the table below gives payments between $3,010 and $4,918, and total repayment between $180,587 and $295,063. These are calculation scenarios, not published market rates or current offers. Additional fees are excluded.
Build the same comparison from a dated written offer. Include amounts deducted before funding, payment dates, additional charges and any balance due at the end. Test the cash remaining in a weaker month before choosing an amount. Provider approval and a manageable payment are separate questions.
Payment estimator
Estimate equipment financing payments for a Chicago, IL business
Illustrative equipment financing figures for $152,000 using hypothetical rate assumptions. Actual offers depend on underwriting and the funding partner.
$3,901 per month and $234,076 in total payback (18.5% assumed annual interest; 60 months; fees excluded).
Hypothetical figures using the stated term or collection period. Fees are excluded. Revenue-based amounts are averages over an assumed period, not fixed payments.
| Scenario | Estimated payment | Total payback / customer settlement | Basis |
|---|---|---|---|
| Lower scenario input | $3,010 / month | $180,587 | 7.0% assumed annual interest; 60 months; fees excluded |
| Midpoint | $3,901 / month | $234,076 | 18.5% assumed annual interest; 60 months; fees excluded |
| Higher scenario input | $4,918 / month | $295,063 | 30.0% assumed annual interest; 60 months; fees excluded |
Secure eligibility check
Fast Funding Review
Share a few details about your Chicago business and the equipment financing amount you have in mind to start a confidential, no-obligation review. This step does not use a hard credit pull.
- No hard credit pull to apply
- Review and funding times vary by provider
- 5+ years in the industry
- Encrypted, private document handling
Documents
Documents an equipment lender expects
Prepare the records requested by the provider. Complete documents help the review but do not guarantee a decision or funding date.
- Equipment quote, invoice or purchase agreement naming the vendor and the exact model
- Business bank statements for the period requested by the provider
- Government-issued ID for the owners identified by the provider
- Most recent business tax return for larger amounts
- Year-to-date profit-and-loss and balance sheet when requested
- Vendor details and, for used equipment, the serial number, hours or mileage and condition photos
Alternatives
Alternatives to equipment financing in Chicago, IL
Compare the products a Chicago business is most likely to be offered alongside equipment financing; each guide below sets out structure, timing, credit guidelines and uses side by side.
Common questions
Equipment financing in Chicago, IL: what owners ask
What equipment may qualify?
A provider may consider new or used equipment needed by the business. Supply an itemized quote and ask about permitted asset types, age, condition, useful life and vendor requirements. Eligibility depends on the asset and the business, not the equipment label alone.
Will I need a down payment in Chicago, IL?
A deposit may be required. Ask for the amount financed, cash contribution, fees and excluded costs in writing. A provider advertising full financing may still have conditions or costs you must pay separately.
Can used equipment be financed in Chicago, IL?
Some providers consider used equipment, subject to age, condition, remaining useful life and vendor checks. Ask whether an inspection or valuation is needed and how the asset age affects the repayment term.
How do Cook County property taxes affect equipment financing for Chicago businesses?
Owners of their premises pay some of the heaviest property-tax bills in the country, and tenants see them passed through in rent. Lenders read those lumpy expenses in bank statements, so a profit-and-loss statement that shows cash flow after occupancy costs strengthens a equipment financing application.
Why is factoring common among Chicago contractors using equipment financing?
The city, Cook County, the CTA, hospitals and universities are major customers that pay on 60- to 90-day terms, and developers add retainage. Factoring or receivables-backed lines convert those invoices to cash while equipment financing covers vehicles and machinery.
Which Chicago resources complement equipment financing?
The SBA’s Illinois district office is downtown, the Illinois SBDC network has centres across the city, and the city’s Department of Business Affairs and Consumer Protection and local CDFIs offer counselling and small loans, particularly for minority-owned businesses.