How to qualify for corporate only equipment financing

What is corporate only equipment financing?

Corporate only financing, written in the industry as corp only and sometimes called a no-PG structure, is a transaction where the business entity alone is obligated on the debt. The owners sign the documents as officers of the company. They do not sign as guarantors.

This is a credit decision, not a separate product. The paper is the same paper: an equipment finance agreement, a capital lease, an FMV lease, a sale-leaseback. What changes is that the guaranty section is left off, and the lender's entire recovery position rests on the company and the equipment.

A personal guarantee is standard practice on small-ticket commercial equipment transactions, and it is typically required from every owner above a threshold stake, commonly 20 to 25 percent. Corporate only is the exception, and lenders treat it as one. Understanding why they ask for the guarantee in the first place is the fastest way to understand what you have to replace to get out of it.

The terminology, because it is used loosely

Brokers and lenders use several terms that sound similar and mean very different things. Knowing which one you are actually being offered matters:

If a lender tells you a deal is corp only, the useful follow-up question is whether the approval is corp only or whether corp only is merely under consideration. Those two answers are weeks apart in practice.

Why lenders require a personal guarantee at all

A personal guarantee does three jobs, and a corporate only file has to cover all three without it.

• Recovery. It gives the lender a second pocket. If the company defaults and the equipment sells for less than the payoff, the deficiency is collectible from the owner's personal assets.
• Alignment. It changes behavior. A corporation can be dissolved, drained, or walked away from. A person cannot. Owners who are personally on the hook manage distress differently, and lenders price that.
• Information. A personal credit report is fast, cheap, and highly predictive for small companies. When a business has a thin file, the owner's report is the only real data the lender has.

For most small businesses, the owner and the company are economically the same entity. The guarantee simply makes the paperwork match reality. Corporate only becomes possible at the point where that stops being true: when the company has its own history, its own credit identity, and enough financial substance that the owner's personal balance sheet is no longer the relevant question.

What has to replace the guarantee

Every one of those three jobs gets reassigned in a corporate only structure:

The five things a corporate only underwriter checks

Underwriting a corporate only request is a different exercise from underwriting a guaranteed one. The order of operations changes. Here is what gets looked at, roughly in the order it gets looked at.

1. Time in business and entity standing

Two years is the common minimum for a no-guarantee request to be considered at all, and three or more is where corporate only becomes realistic. Five years or more opens up materially more. For closely held companies, meaning one or two individual owners, some lenders publish a much higher bar: ten or more years in business, plus evidence of multiple prior corporate only borrowings.

That gap is not arbitrary. The fewer people who control the company, the more the company behaves like an individual, and the more a lender wants the individual on the paper. A widely held company, an ESOP, a private-equity-backed platform, or a subsidiary of a larger parent clears this hurdle far more easily than a two-owner S corporation of the same size.

Standing matters too, and it is the easiest thing to fix and the most commonly overlooked:

• Entity is active and in good standing with the Secretary of State, with no lapsed filings.
• A federal EIN, a business bank account, and a business address and phone that are listed and verifiable.
• A D-U-N-S number, which is free from Dun & Bradstreet and is the prerequisite for a D&B file existing at all.
• Ownership that has been stable. A recent change of control resets the clock in most credit policies.

2. Business credit depth and scores

With no personal guarantee, the business credit file stops being a supporting document and becomes the primary credit report. Most business owners have never looked at theirs. Before requesting corporate only terms, pull all of them.

Score bands are published bureau definitions. Individual lender cutoffs vary and are set by internal credit policy, not by the bureaus.

PayNet deserves particular attention. It is fed by commercial lending data contributed by lenders themselves, drawing on hundreds of variables covering payment history, delinquency frequency, defaults, public records, outstanding debt, time in business, revenue, entity structure, and industry code. If you have financed equipment before, that history is already in there. It is also the file where a thin record is most visible, because a company with no commercial borrowing has almost nothing in it.

3. Comparable borrowing history

This is the requirement that decides most corporate only files, and it gets its own section below.

4. Financial capacity

Once a guarantee is off the table, the company's ability to service the payment out of its own cash flow has to be demonstrated on paper rather than assumed. The ratios below are conventional commercial credit benchmarks. Different lenders weight them differently, but a file that clears all of them is a file that can be argued.

General underwriting benchmarks for orientation, not approval criteria. Actual requirements are set by each lender's credit policy and vary by industry, equipment type, and transaction size.

5. Public records and the derogatory scan

Anything that suggests the company has been under financial pressure gets weighted heavily, because there is no guarantor to fall back on. Open tax liens, judgments, prior repossessions, suits, and a bankruptcy anywhere in the entity's history will end a corporate only request in most credit boxes even when everything else is strong.

Comparable credit: the requirement that decides most files

Comparable credit, or "comps," means prior or existing borrowing in the company name only, at or near the size of what you are now requesting, paid as agreed. It is the single most common reason a strong company gets declined for corporate only terms, and it is the requirement borrowers understand least.

The logic is straightforward. A lender being asked to extend $300,000 with no personal recourse wants evidence that someone else already did something similar and got paid back. Financial statements show capacity. Comparable credit shows behavior. Underwriters treat demonstrated behavior as the better predictor, and they are right to.

What counts as a comp:

• Corporate only obligations. A prior equipment finance agreement, lease, term loan, or line of credit in the entity name with no personal guarantee attached. This is the strongest form.
• Reported to a commercial bureau. If it does not appear on PayNet, Experian Business, or D&B, it does not exist as far as underwriting is concerned. Loans from a local bank that does not report are the most common invisible comp.
• Comparable in size. A frequent internal standard is a comp at 50 to 100 percent of the requested amount. A $25,000 tradeline does not support a $400,000 request.
• Seasoned. Twelve months or more of history, and generally more than one. Lenders like to see a pattern, not a single instance.
• Clean. Paid as agreed throughout. A single 30-day late on a comp does more damage here than it would on a guaranteed file.

What does not count: trade lines with suppliers on net-30 terms (helpful for PAYDEX, not a substitute for a term obligation), business credit cards, guaranteed borrowing where an owner signed, and the owner's personal credit history no matter how strong it is.

This is why a profitable company with $40 million in revenue and no borrowing history can still be declined for a $200,000 corporate only request while a $6 million company that has quietly financed and paid off four machines gets approved. Corporate only is a credit-history product. Size helps. History decides.

How transaction size changes what you have to submit

The documentation burden scales with the number, and so does the underwriting method. Below roughly $250,000, corporate only decisions are largely score-driven and can be made from an application and bureau data. Above that, they become financial-statement decisions.

One consequence worth planning around: the application-only corporate only window is genuinely fast, and the full-financials window is genuinely not. A $240,000 request and a $260,000 request can be two weeks apart in funding time. If you are near a threshold, it is worth knowing where it sits before you structure the purchase.

When full corporate only is not available: the middle ground

Most files that ask for corporate only and do not get it are not simply declined. They come back with a structure that reduces personal exposure without eliminating it. These options are frequently better outcomes than holding out for a pure corp only approval, and they are negotiable:

• Limited guaranty. Personal liability capped at a fixed amount or a percentage of the original balance. A guarantee capped at 25 percent of a $400,000 transaction is a very different risk than an unlimited one.
• Burn-off guaranty. The guarantee releases after a defined period of clean payments, commonly 12 to 24 months, or on hitting a stated financial metric. Ask for this in writing at the outset. It is much harder to add later.
• Validity guaranty only. You stand behind the accuracy of what you represented, not the repayment of the debt. Standard on many larger corporate transactions.
• Corporate cross-guaranty. An affiliated entity you own, particularly a profitable one or a real-estate holding company, guarantees in place of you individually.
• Parent guaranty. For subsidiaries, the parent signs. This is often the simplest route and is standard practice.
• Larger down payment. Twenty to thirty percent down changes the lender's loss position materially and is the most reliable lever on a marginal corporate only file.
• Shorter term. A 36-month structure carries far less residual risk than an 84-month one, and amortizes below the equipment's value faster.
• Additional collateral. Cross-collateralizing owned equipment or accepting a blanket UCC-1 rather than a specific filing can bridge the gap.

A blanket lien deserves a caution. It encumbers all business assets, not just the financed equipment, and it will show up on the next lender's UCC search and complicate your next financing. Trading a personal guarantee for a blanket lien is sometimes the right call and sometimes an expensive one. Know which you are doing.

Who gets corporate only almost automatically

Some borrowers never see a guarantee request, and it is useful to know why, because the reasons point back at what everyone else is trying to prove.

• Publicly traded and investment-grade companies. A rated credit has audited financials, public disclosure, and an external opinion on its ability to pay. There is no individual to guarantee it and no need for one.
• State and local government. Municipalities, counties, school districts, and fire districts finance through tax-exempt municipal lease purchase agreements. These carry a non-appropriation clause instead of a guarantee, meaning the obligation is subject to the governing body appropriating funds each fiscal year. The structure also delivers a lower rate, since the interest portion is tax-exempt to the lender.
• Established 501(c)(3) non-profits. With audited statements, reserves, and an operating history, non-profits are routinely financed on the entity alone. There is often no owner who could sign personally in the first place.
• Institutionally owned and private-equity-backed companies. Diversified ownership removes the closely-held concern entirely.
• Subsidiaries of creditworthy parents. The parent guaranty substitutes cleanly for a personal one.

What corporate only costs

Removing the guarantee is not free, and any broker who tells you it is should be questioned. The lender is giving up a recovery source, and it prices for that. Expect the trade to show up in one or more of these places:

• Rate. A corporate only structure commonly carries a premium over the same transaction with a guarantee. On strong corporate credits the difference is modest. On borderline files it can be substantial.
• Advance and down payment. Lower advance rates and more money down are the most common adjustments.
• Term. Shorter amortization to keep the balance below the collateral value.
• Documentation and time. Financial statements, a debt schedule, agings, and a credit committee instead of a score-driven auto-decision. Plan on weeks rather than days above the application-only threshold.
• Covenants and reporting. On larger transactions, ongoing financial reporting requirements and maintenance covenants.
• Insurance and filing requirements. Stricter certificate requirements and, in some cases, a broader UCC filing position.

Run the comparison honestly. If a guaranteed structure prices materially better and your company's balance sheet is the only asset that would realistically be exposed anyway, the guarantee may be the cheaper answer. Corporate only is most valuable when there is genuine personal exposure to protect: a personal residence, other business interests, or a pending personal financing where a contingent liability would count against you.

What kills a corporate only request

These come up constantly, and several of them are self-inflicted:

• Stacked merchant cash advances. The most damaging item on this list. Multiple MCA positions and the blanket UCC filings that come with them signal distress, consume cash flow, and prime the lender's collateral position. Many credit policies decline corporate only outright on any open MCA.
• Open tax liens or judgments. A filed federal tax lien does not automatically outrank a lender that perfected its security interest first, but it does take priority as to assets acquired after the filing, and it reads as distress on the file. Most corporate only credit policies decline on an open lien, and even an installment agreement in good standing narrows options sharply.
• A thin or nonexistent business credit file. No D-U-N-S, no reporting tradelines, no commercial borrowing history. The company may be excellent and simply invisible.
• Negative bank days and NSF activity. Three months of statements showing overdrafts undercuts every financial argument on the file.
• Recent change of ownership or entity. A new EIN starts a new credit history regardless of how long the underlying business has operated.
• Commingled finances. Personal expenses running through the business, or business revenue landing in a personal account, tells the underwriter the company is not actually separate. That is the entire premise of a corporate only request.
• Declining revenue or losses in the most recent year. Correctable with a strong explanation and interim figures showing recovery, but it will be asked about.
• Industry. Cyclical and high-attrition sectors face tighter corporate only criteria. Long-haul trucking, restaurants, and construction subcontractors sit at the harder end. Medical, dental, manufacturing, and professional services sit at the easier end.

How to build toward corporate only in 12 to 24 months

If your company does not qualify today, the path is well-defined. Most businesses that reach corporate only eligibility got there deliberately, in roughly this order.

• Get the entity clean first. Confirm good standing with the state, an EIN, a listed business address and phone, and a business bank account used exclusively for business. Request a D-U-N-S number from Dun & Bradstreet. None of this costs meaningful money and all of it is prerequisite.
• Stop commingling completely. Business income and expenses run through business accounts. Owner draws are documented as draws. This is the difference between a company with financial statements and a company with a shoebox.
• Open tradelines that actually report. Not every vendor reports to the commercial bureaus. Ask before you assume. Three to five reporting suppliers paid on or before terms will establish a PAYDEX and start moving it toward 80.
• Take a guaranteed equipment deal and pay it perfectly. This is the step most owners skip and it is the one that matters most. A financed and fully repaid obligation in the company name is the raw material of comparable credit. Paying cash for equipment builds nothing.
• Step the size up. Each successfully completed transaction raises the ceiling on the next one. Going from $50,000 to $150,000 to $400,000 over three deals is a normal and effective progression. Trying to jump from nothing to $400,000 corporate only is not.
• Ask for a burn-off provision on the way. When you do sign a guarantee, negotiate a release after 12 to 24 months of clean payments. Lenders grant this more often than borrowers ask.
• Upgrade the financial statements as you grow. Internally prepared statements are adequate under $250,000. CPA-compiled or reviewed statements are the expectation in the middle range. Audited statements are the norm above $5 million. Move up a level before you need it, not after.
• Stay away from MCAs. A single stacked position can undo two years of this work. If short-term cash is the problem, solve it somewhere that does not file a blanket lien.
• Monitor the business bureaus. Errors on commercial credit files are common and nobody is going to catch them for you. Check D&B, Experian Business, and Equifax at least annually and dispute what is wrong.

What to have ready when you submit

A corporate only file that arrives complete gets a real answer. One that arrives in pieces gets a guarantee request, because underwriting defaults to the safer structure when it cannot see enough. Assemble this before you apply:

• Completed credit application signed by an officer, with the corporate only request stated explicitly up front.
• Three years of business tax returns.
• Two to three years of year-end financial statements, plus a current interim P&L and balance sheet.
• Three to six months of business bank statements.
• A current debt schedule listing every obligation, lender, balance, payment, and maturity.
• Accounts receivable and accounts payable aging reports.
• The equipment quote or invoice, with the vendor identified.
• Articles of incorporation or organization, the operating agreement, and a certificate of good standing.
• A certificate of insurance naming the lender as loss payee and additional insured.
• Business credit references, including any prior corporate only obligations and who financed them.

That last item does more work than its position on the list suggests. Naming your prior corporate only lenders and the amounts gives the underwriter the comparable credit argument directly instead of hoping the bureaus surface it.

Three misconceptions worth correcting

Corporate only does not mean no personal credit check. Many lenders still pull the owner's credit on a corporate only file, usually as a soft inquiry, to screen for personal bankruptcies, tax liens, and judgments. No guarantee is being signed, but the owner's record is still information about how the business is likely to be run.

Corporate only does not mean no consequences. The company remains fully liable. On default, the lender can repossess the equipment, sue the entity, obtain a deficiency judgment against it, and report the default to the commercial bureaus, where it will follow you into every future application. Validity guaranties and fraud carve-outs also survive: if the information submitted was false, personal liability generally comes back.

Forming an LLC or buying an aged corporation does not create eligibility. There is a persistent industry of "corporate credit building" and "shelf corporation" offerings promising no-PG funding to new entities. Underwriters know exactly what an aged shelf entity with no operating history looks like, and the credit bureaus flag them. Corporate only eligibility comes from operating history and repayment behavior, and there is no shortcut around either.

Does corporate only change the tax treatment?

No. Whether an owner guarantees the debt has no bearing on how the equipment is depreciated. What matters is the structure of the agreement.

Equipment finance agreements and $1-buyout structures are generally treated as ownership for tax purposes, which puts the equipment in play for Section 179 expensing and bonus depreciation. True fair-market-value leases are generally treated as rentals, where the payments are deducted as an operating expense instead.

For 2026, the Section 179 deduction limit is $2,560,000, with the phase-out beginning at $4,090,000 of qualifying property placed in service and full phase-out at $6,650,000. Bonus depreciation is back at 100 percent for qualifying property acquired and placed in service after January 19, 2025, under the One Big Beautiful Bill Act. The usual sequence is to apply Section 179 first, then bonus depreciation to the remaining basis.

Tax figures are current published limits for the 2026 tax year and are provided for general information. Five West Financial does not provide tax advice. Confirm treatment with your CPA before relying on it in a purchase decision.

The bottom line

Corporate only equipment financing is not a better version of a normal approval handed to better borrowers. It is a different underwriting question. A guaranteed file asks whether the owner can repay. A corporate only file asks whether the company already has.

That is why the qualifying criteria cluster around history rather than size: two years minimum, three or more to be realistic, and ten at some lenders for closely held companies, an established business credit file with a PAYDEX at 70 or better, comparable borrowing at half the requested amount or more, and financials showing 1.25x coverage on the payment. A company that can show those four things has an argument. A company that cannot has a project, and a well-defined one.

If you are somewhere in between, the middle-ground structures are usually the right answer. A limited guarantee, or a full one with a 12-month burn-off, protects most of what a corporate only structure would protect and gets funded now rather than in two years.

Frequently asked questions

What is corporate only equipment financing?

Corporate only, or corp only, equipment financing is a transaction where the business entity is the sole obligor and no owner signs a personal guarantee. The owners sign as officers of the company. The lender's recovery is limited to the company and the financed equipment.

How do you qualify for equipment financing with no personal guarantee?

Four requirements carry most corporate only approvals: two years in business at minimum and three or more to be realistic, with ten or more required at some lenders for closely held companies; an established business credit file with clean payment history and a D&B PAYDEX of 70 or better; comparable borrowing history in the company name at 50 to 100 percent of the requested amount; and financial statements showing debt service coverage of about 1.25x. A clean public record with no open tax liens, judgments, or merchant cash advance positions is also required.

What is comparable credit in equipment financing?

Comparable credit means prior or existing borrowing in the business name only, at or near the size of the amount being requested, paid as agreed and reported to a commercial credit bureau. It is the most common deciding factor on corporate only files. Trade lines with suppliers, business credit cards, and personally guaranteed loans do not count as comparable credit.

How much business revenue do you need for corporate only financing?

There is no universal revenue threshold. On small-ticket corporate only files, a common internal benchmark is annual revenue of at least ten times the amount financed. Revenue alone does not qualify a company, however. A business with substantial revenue and no commercial borrowing history will typically be declined for corporate only terms in favor of a company with less revenue and an established repayment record.

Is corporate only financing more expensive?

Usually, yes. Removing the personal guarantee removes a recovery source for the lender, and that is priced. The premium shows up as a higher rate, a larger down payment, a shorter term, more documentation, or financial covenants. On strong corporate credits the difference is modest. On borderline files it can be significant.

Does corporate only mean the lender will not check my personal credit?

No. Many lenders still pull the owner's personal credit on a corporate only file, generally as a soft inquiry, to screen for personal bankruptcies, tax liens, and judgments. No personal guarantee is signed, but the owner's record is still treated as information about the business.

What is a burn-off guarantee?

A burn-off guarantee is a personal guarantee that is released after a defined performance period, commonly 12 to 24 months of on-time payments, or on reaching a stated financial metric. It is often the most practical outcome for a company that is close to corporate only eligibility but not there yet, and lenders grant it more often than borrowers ask for it.

Can a new business get corporate only equipment financing?

Effectively no. Corporate only underwriting rests on operating history and demonstrated repayment behavior, neither of which a new entity has. Forming an LLC or acquiring an aged shelf corporation does not create eligibility, and commercial credit bureaus flag entities with no operating history. The realistic path for a newer company is a guaranteed transaction, ideally with a burn-off provision negotiated at signing.

Do municipalities and non-profits need a personal guarantee?

No. State and local government entities finance through tax-exempt municipal lease purchase agreements, which carry a non-appropriation clause rather than a guarantee, meaning the obligation is subject to funds being appropriated each fiscal year. Established 501(c)(3) non-profits with audited financial statements are also routinely financed on the entity alone.

Related guides

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This article is general information about commercial equipment financing and is not a commitment to finance, nor is it tax or legal advice. All financing is subject to credit approval and underwriting. Rates, terms, structures, and approval depend on the complete business and credit profile. Credit score ranges cited are published bureau definitions; individual lender requirements are set by internal credit policy and vary.