Want a Corp-Only Equipment Loan? Here’s What It Really Requires — No Sugarcoating

One of the most common misconceptions we hear from business owners is this:

“I want the loan to be under the business only – without using my personal credit.”

In other words: a Corp-Only approval.

While it’s possible, lenders approve corp-only deals far less frequently than people realize. Why? Because removing the personal guarantee shifts all the risk onto the business. That means the business must prove it has the financial strength, credit depth, and stability to stand on its own.

At Truecore Capital, we see thousands of applications every month – and only a very small percentage truly qualify for corp-only. In this article, we break down exactly what lenders are looking for and how to put yourself in the best position to get approved.

Why Corp-Only Is So Rare

When the lender removes the personal guarantee, they lose their strongest repayment assurance: the guarantor.

• Without that, the business must show:
• – Consistent profitability
• – Strong business credit
• – Low debt load
• – Solid cash flow
• – Clean financials and tax returns

Most small and midsize businesses simply aren’t financially mature enough to qualify on business strength alone. According to research presented at the Consumer Financial Protection Bureau’s 2022 Research Conference, 86% of small employer firms rely on the owner’s personal credit in some capacity to fund their operations.

What Lenders Need for a Corp-Only Approval

1. 1. Strong Business Credit (Not just a DUNS Number)

• A well-established commercial credit profile is required for the business – this includes:
• – Multiple trade lines reporting
• – Credit accounts aged 12-24+ months
• – Clean payment history
• – Low utilization and no derogatories

• Lenders may evaluate:
• – Paynet
• – Experian Intelliscore
• – Equifax Business Delinquency Score
• – UCC filings
• – PayNet data

If your business credit file is thin or nonexistent, corp-only will be unlikely. For a deeper breakdown on lender expectations, see our equipment financing requirements guide.

1. 2. Healthy Cash Flow & DSCR Above 1.25

• Business lenders frequently analyze DSCR (Debt Service Coverage Ratio):
• – DSCR = Net Operating Income + Total Debt Obligations
• – Most corp-only lenders want DSCR 1.25+, meaning the business earns 25% more than its total debt obligations.
• – This is why stable revenue, low existing debt, and clean bank statements are critical

1. 3. Time in Business: Typically 3-5+ Years

Startups almost never qualify for corp-only – even at 2 years in companies are still building revenue consistency and credit stability.

• Lenders generally expect:
• – 36+ months minimum TIB
• – 60+ months preferred for larger ticket items

For comparison, here’s how lenders classify younger companies in our start-up equipment financing guide.

1. 4. Strong Financial Statements & Clean Tax Returns

• To remove a personal guarantee, lenders will request full documentation:
• – Last 2 years business tax returns
• – Year-to-date P&L
• – Balance sheet
• – Bank statements

• These must show:
• – Consistent revenue
• – Profitability
• – Low leverage
• – Logical expense structure

To get your financials year-end ready, check out our 2025 CapEx Year-End Checklist.

1. 5. Equipment Type & Age Matter Too

• Even with perfect business credit, a corp-only deal can still get declined if the equipment is:
• – Too old
• – Too many hours/miles
• – Highly specialized
• – Difficult to resell
• – High-risk assets (like trucks with overhauled engines) often get flagged immediately

If you’re considering used trucks, read our risks of overhauled engines article.

Why Most Applicants Don’t Qualify (And Don’t Realize It)

Most business owners think: “My business is doing fine – I should qualify.”

• But lenders typically see:
• – Thin business credit
• – Inconsistent revenue
• – Low DSCR
• – High debt load
• – Limited time in business
• – Weak tax documentation
• – Equipment that doesn’t fit guidelines

This is why 99% of deals require a personal guarantee — not because lenders are rigid, but because the business itself isn’t strong enough to stand on its own.

How to Improve Your Chances of a Corp-Only Approval

If corp-only financing is your goal, here’s how to position yourself:

1. Establish strong business credit
– Aged tradelines + clean payment history.

2. Improve DSCR to 1.25-1.50+
– Increase revenue or reduce existing debt.

3. Keep tax returns clean and accurate
– Avoid large write-offs that reduce net income.

4. Separate business and personal finances
– No commingling.

Final Verdict: Corp-Only is Possible – But Only With the Right Profile

Corp-only approvals aren’t impossible – but they’re rare and require a business to be financially strong, well-documented, and stable for several years.

And if your business doesn’t qualify for a corp-only approval — don’t worry. Most companies don’t, and it has zero impact on your ability to secure strong commercial financing.

The good news: you’re in the right place! At Truecore Capital, we specialize in building the best possible structure for your situation, with flexible options that fit your cash flow and help your business move forward.

Ready to Explore Your Options?

Give us a call at (805) 422-7342 or submit a quick contact form below and one of our specialists will reach out to you shortly.

• Sources:
• – CFPB Research Conference, 2022, “How Much Do Small Businesses Rely on Personal Credit?”, [https://files.consumerfinance.gov/f/documents/cfpb_2022-research-conference_session-6_fonseca-wang_paper.pdf].