Equipment is the one cost that will not wait. A delivery van goes, an oven fails, a CNC machine needs replacing, or a contract arrives that you can only service with a second truck. The money has to be found quickly, and paying for a long-lived asset out of this month’s cash flow is rarely the right answer. Equipment financing spreads that cost over the working life of the asset instead.
This page sets out the realistic routes for Canadian businesses, including the government-backed programme most people have never had explained to them, and where each one makes sense.
Financing versus leasing: the distinction that matters
These two get used interchangeably and they are not the same thing.
Equipment financing is a loan against the asset. You own the equipment from day one, it sits on your balance sheet, and the lender holds security over it until the balance is cleared. You claim the capital cost allowance. When the term ends you owe nothing and you keep the machine.
Equipment leasing means the lessor owns the asset and you pay to use it. Payments are usually lower, the asset is not yours, and at the end of the term you hand it back, extend, or buy it out at a residual value set in the contract.
The honest rule of thumb: finance anything with a long useful life that holds its value and that you will still want in five years, such as kitchen equipment, vehicles, or production machinery. Lease anything that dates quickly or that you only need for a specific contract, such as IT hardware or specialist plant. If the asset will be worth something at the end of the term, owning it is usually the better deal.
What you can fund
Most lenders, including us, will consider anything that is a genuine business asset with a resale market:
- Vehicles, from a single van to a fleet of trucks and trailers
- Commercial kitchen equipment, refrigeration, and point-of-sale systems
- Production and manufacturing machinery, including CNC, presses, and moulds
- Construction plant, excavators, lifts, and attachments
- Medical, dental, and veterinary equipment
- Diagnostic and shop equipment, hoists, and alignment rigs
- Computers, servers, and specialist software where it is capitalised
- Fixtures, fittings, display cases, and leasehold improvements
Freight, installation, and non-refundable taxes can usually be rolled into the amount financed, which matters more than people expect. Shipping and commissioning on a large machine can add a fifth to the invoice.
What it costs
Equipment financing is priced on three things: the asset, the file, and the lender. A strong set of books plus new, easily resold equipment such as trucks, yellow iron or standard machinery, financed through a bank or a manufacturer’s own programme, puts you in the high single digits. Average files, used equipment, or specialised assets with a thin resale market sit in the low to mid teens. Alternative lenders funding bruised credit or a young business price higher again, in exchange for approvals the banks will not write.
Down payments run anywhere from nothing to twenty per cent. New equipment with a strong resale market often finances at the full purchase price. Used or niche equipment usually wants some skin in the game.
The rate is not the whole cost. Three things to check in any offer:
- Documentation and PPSA registration fees, which are standard but vary by lender
- End-of-lease buyout terms. A one-dollar buyout behaves like a loan. A fair-market-value buyout can produce an unwelcome number at the end of the term, so get it in writing at the start
- Personal guarantees. Most Canadian equipment deals under $250,000 still include one, whatever the marketing says
The government-backed route, with the real numbers
The Canada Small Business Financing Program is the option most owners either have not heard of or have been told is not worth the paperwork. It is worth understanding before you borrow anywhere else, because the terms are better than anything a private lender can offer.
Under the programme, the federal government shares the risk with the lender, which lets banks and credit unions approve businesses they would otherwise decline. The current limits:
- Up to $500,000 for equipment and leasehold improvements, of which up to $150,000 can go to intangible assets and working capital
- Up to $1,000,000 in total term lending, with the amount above $500,000 reserved for purchasing or improving real property
- A separate $150,000 line of credit, on top of the term loan maximum
- Your business must have gross annual revenue under $10 million in the fiscal year the loan is approved
Eligible costs include the purchase, installation, improvement, or modernisation of equipment, and vehicles count. Your own labour does not, and neither do vehicles for personal use. You will need proof of purchase and proof of payment for everything claimed.
The catch is process, not price. You apply through a bank or credit union rather than the government, the lender makes the credit decision, and the paperwork is substantial. Expect several weeks from first conversation to funds in the account, sometimes longer if your financial statements need work. If your equipment purchase is planned rather than urgent, start here.
When speed matters more than the rate
The programme above is the cheapest money available to a small Canadian business. It is also the slowest, and it is administered by institutions that will decline you for a short trading history, a thin credit file, or a sector they have decided they do not like.
That is the gap we work in. If the oven died this week, if the truck that earns the contract has to be on the road by Monday, or if the bank has already said no, a slower and cheaper option is not actually an option. Revenue-based funding and short-term equipment advances cost more than a government-backed term loan and they are decided in hours rather than weeks, on your trading record rather than your balance sheet.
We will tell you when the bank is the better answer. If you have time and a clean set of books, use it. If you do not, talk to us.
How to qualify with us
Our criteria are deliberately simpler than a bank’s:
- Six months or more of trading history
- Consistent monthly revenue, typically $10,000 or more
- A Canadian business bank account
- The invoice or quote for the equipment you are buying
Across trades, transport, healthcare, hospitality and fitness the pattern is consistent. Equipment lenders weight four things, in this order:
- The asset’s resale market. A dump truck finances easily. A custom one-of-a-kind machine does not, whatever it cost new
- Your last six months of deposits. Revenue consistency matters more than a credit score, because the only real question is whether the payment fits inside your cash flow
- Time in business. Two years opens every door. Six to twenty-four months narrows you to the government-backed programme, manufacturer finance, and alternative lenders, all of which still work
- Credit, last. Bruised credit raises your rate. On well-secured equipment it rarely kills the deal outright
We do not require a perfect credit score, a long-standing banking relationship, or audited accounts. Three to six months of business bank statements tell us most of what we need to know. Decisions are usually same day, and funds move within 24 to 48 hours of approval.
Equipment financing by industry
What counts as essential equipment, and how quickly it needs replacing, varies enormously by sector. We work across all of them:
- Restaurants and food service, where refrigeration and cooking equipment failures stop trade the same day
- Transportation and logistics, for trucks, trailers, and the repairs that keep a fleet certified
- Auto shops, for hoists, diagnostic rigs, and alignment equipment
- Healthcare and wellness, for clinical and diagnostic equipment with long lead times
- Retail, for fit-outs, display, refrigeration, and point-of-sale
- Professional services, for IT, premises, and specialist software
- E-commerce, for warehouse, packing, and fulfilment equipment
Common questions
Can I finance used equipment?
Yes. Used equipment is financed routinely, particularly vehicles and production machinery where the second-hand market is strong. The lender will look at the age of the asset against the length of the term, because nobody wants a loan running longer than the machine.
Do I need a deposit?
Not always. Bank and programme lending often expects you to contribute a share of the purchase price. Revenue-based funding generally does not, because it is secured against your trading rather than the asset alone.
What if my credit is poor?
Credit history matters less to us than current trading. If revenue is consistent and the bank statements are healthy, a past default or a thin file does not rule you out. A government-backed programme loan is harder to get in that position, which is usually what brings people to us.
Can I fund equipment and working capital together?
Yes, and it is often sensible. New equipment usually comes with costs around it: installation, training, a bigger inventory run, or extra staff. A merchant cash advance or revenue-based facility can cover the asset and the working capital in one arrangement.
How long are the terms?
Terms are matched to the asset. Vehicles and heavy machinery typically run three to five years; shorter-life equipment runs over twelve to twenty-four months. Revenue-based funding is shorter again, usually six to eighteen months, repaid as a percentage of daily or weekly receipts.
Talk to us about an equipment purchase
Send us the quote or invoice and three months of business bank statements and we will tell you what we can do, usually the same day. If the government-backed route is a better fit for your situation, we will say so.
Apply now or get in touch to talk it through first.
Last reviewed November 2026. Programme limits for the Canada Small Business Financing Program are as published by Innovation, Science and Economic Development Canada and are subject to change. This page is general information, not financial advice.
