As the Canadian economy continues to evolve in 2025, understanding how equipment finance interest rates are changing is essential for business owners planning to invest in machinery, tools, or vehicles. Whether you're upgrading your fleet, expanding a manufacturing line, or digitizing operations, securing favorable financing terms can significantly impact your long-term profitability.
In this guide, we’ll break down how these rates are set, current market trends, and what you can do to secure the best rates—especially with the support of a trusted financing partner like Mehmi Financial Group.
Interest rates for equipment loans in Canada are shaped by several economic and financial factors. While borrowing costs have stabilized compared to the volatility seen in 2022–2023, market dynamics continue to shift.
Interest rates on equipment loans are generally calculated as a markup over Canada’s prime lending rate. Lenders evaluate various risk factors to determine the final rate offered to each applicant.
Most equipment financing products use the prime rate as a base. The final rate is typically expressed as:
Equipment Loan Rate = Prime Rate + Risk Margin
The margin varies depending on factors like:
Lenders use risk-based pricing, which means your rate will depend on:
Staying ahead of current trends can give your business an edge when financing new equipment:
Online equipment finance companies and fintech lenders are offering faster approvals and competitive fixed rates. This competition is helping push traditional lenders to offer more borrower-friendly terms.
Businesses investing in low-emission machinery, electric trucks, or energy-efficient equipment may access lower rates due to government-backed green lending incentives.
With economic uncertainty lingering, more lenders are offering:
These help businesses manage cash flow while investing in critical upgrades.
When it comes to navigating equipment financing in Canada, choosing the right partner is critical. At Mehmi Financial Group, we simplify the lending process while helping you secure competitive rates—even if your business is newer or your credit is less than perfect.
Explore our Equipment Financing Solutions →
Lenders reward financial stability, strong documentation, and clear business planning. Here’s how to improve your chances of securing the lowest possible rate:
Lenders may ask for:
If you’re applying for refinancing, include your existing loan agreement.
Interest rates fluctuate based on macroeconomic conditions. Apply during periods of lower base rates or during lender promotional campaigns.
Don’t rely on just one quote. Leverage brokers or firms like Mehmi Financial Group to access a wider network of lenders.
What is the average equipment loan rate in Canada in 2025?
Rates vary widely based on credit and equipment, but typically range from 7% to 14% for small and medium-sized businesses.
Can I finance used equipment?
Yes. Many lenders offer financing for used equipment, although rates may be slightly higher due to asset depreciation risk.
Is leasing cheaper than financing?
Leasing may offer lower monthly payments but doesn’t build equity. Financing may cost more monthly but leads to ownership. Choose based on your long-term goals.
Do I need a down payment?
Not always. Some lenders offer 0-down equipment loans. However, a down payment (10–20%) can improve your interest rate.
Can I get approved with bad credit?
Yes. Bad credit equipment loans are available, especially if you have strong income, collateral, or a co-signer.
Equipment financing doesn’t need to be complicated—or expensive. By understanding the forces shaping interest rates and working with a trusted partner like Mehmi Financial Group, you can secure the funding you need to fuel business growth.
Whether you're in need of construction tools, transport vehicles, or specialized machinery, our team is here to help.
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