Key highlights
- Banks can be competitive on strong, straightforward deals
- Non-bank lenders often win on flexibility and speed
- Tighter bank criteria can mean declines for good businesses
- Comparing both is the only way to find the sharpest rate
Banks are not automatically cheaper for equipment finance. For strong, straightforward applications they can be very competitive, sometimes from around 6.55% p.a. for eligible, asset-backed deals. But their criteria are tighter, and for older assets, lower-doc deals or less-than-perfect credit, non-bank lenders often approve where a bank declines, and sometimes price better too. The only way to know is to compare both, which is exactly what Overdrive does across 80+ banks and non-bank lenders on a single application, so you see the real market rather than one shopfront.
Where banks can be competitive
For a clean, well-documented application, a bank can offer a genuinely sharp rate. If you have strong financials, a solid trading history, good credit and you are buying a mainstream, near-new asset, you tick the boxes their pricing is built around, and the number can be very attractive. Banks fund at scale and can price keenly for the low-risk deals they want. The catch is that this describes a specific type of applicant. If your situation sits outside that neat profile, the bank's advertised rate may not be the rate you are actually offered, if you are approved at all.
Where non-bank lenders shine
Non-bank and specialist lenders often lead on flexibility. They may accept older assets, lower-doc applications, shorter trading histories or explained credit issues that a bank would decline outright. Their assessment tends to weigh the full picture rather than a rigid checklist, and decisions can be faster. On rate, they are frequently comparable and sometimes better for the deals banks do not favour. They are not automatically cheaper across the board, but for a large slice of real-world applications they are the funders most likely to say yes at a sensible price, subject to lender assessment.
Approval matters as much as rate
A brilliant advertised rate is worthless if your application is declined. Banks generally have tighter, more automated criteria, so good businesses are sometimes knocked back for reasons that have little to do with their ability to repay, such as a thin file or an older asset. A non-bank lender might approve the same deal comfortably. When you compare options, look past the headline number to the likelihood of approval and the total cost. The best outcome is a lender that both approves your specific deal and prices it well, not simply the lowest rate you can find advertised.
The cost of shopping one lender at a time
Approaching banks and lenders individually is slow, and each direct application can add a credit enquiry, which may make your file look worse over time. You also only ever see one price at a time, with no easy way to know whether it is sharp or merely average. Because banks and non-banks assess so differently, the range of offers on the same deal can be wide. Seeing them side by side is the only reliable way to judge value, and doing so through one channel avoids the enquiry pile-up that comes from knocking on doors one by one.
How comparing changes the outcome
When a broker reviews your deal once and matches it to the right lenders, banks and non-banks alike, you see where your application genuinely fits best. Sometimes that is a bank, sometimes it is not. Overdrive compares 80+ funders on a single application, so the market competes for your business rather than you chasing it one lender at a time. That comparison also tells you honestly when your own bank is the sharpest option, which is worth knowing either way. Same-day pre-approval and 24-48 hour settlement may be available for eligible applicants. All figures are indicative and subject to lender assessment until a formal approval is issued.
So do banks offer better rates? Sometimes, for the right deal, but not as a rule, and never on every application. The honest answer only appears when you compare banks and non-bank lenders together. Overdrive's dedicated broker, Simon Kendrick, does exactly that across 80+ lenders on one application. Request a free quote and find out who really offers you the best rate, rather than assuming it is your bank.
Frequently Asked Questions
Are banks always cheaper than non-bank lenders?
No. Banks can be very competitive for strong, straightforward deals, but non-bank lenders are often comparable and sometimes cheaper for older assets, lower-doc files or explained credit issues that banks decline. There is no universal winner, which is why comparing both on the same deal is the reliable approach.
Why would a bank decline a good business?
Banks tend to use tighter, more automated criteria, so applications can be knocked back for reasons unrelated to repayment ability, such as a thin trading history, an older asset or a minor credit event. A non-bank lender weighing the full picture may approve the same deal comfortably.
Is my own bank the best place to start?
It is worth a look, but starting and stopping there means you only see one price with no benchmark. Because banks and non-banks assess so differently, the range of offers on one deal can be wide. Comparing across the market shows whether your bank's rate is genuinely sharp.
Does going to a non-bank lender cost more?
Not necessarily. Non-bank lenders are frequently comparable on rate and sometimes better for deals banks do not favour. They shine on flexibility and speed rather than always on price. What matters is finding the lender that both approves your deal and prices it well, subject to assessment.
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