Conveyor & Sortation Leasing: B/C/D Options

Conveyor and sortation lines are the heartbeat of Canadian distribution centres, 3PLs, and e-commerce ops. But banks often stall on used components, private-sale mixes, or integration-heavy installs. As both a seller of commercial assets and a financing partner across 30+ Canadian lenders, we routinely place conveyor packages with private (B/C/D) lenders who underwrite the asset + throughput story, not just perfect financials. If you’d like a quick read on your file, feel free to contact our credit analysts.

What private underwriters look for (beyond your credit score)

Asset package

• Bill of materials: belt/roller modules, transfers, merges/diverts, sorters (shoe/cross-belt), scanners, PLCs/HMI, drives, controls, guardrails.
• Integration scope: mechanical/electrical install, PLC programming, WMS/WCS links, FAT/SAT.
• Docs that matter: vendor quotes, layout drawings, controls architecture, commissioning plan, warranty/support agreements.

Business & cash flow

• Throughput math: current vs post-install orders/hr, picks/hr, error rate, labour savings.
• 3–6 months business bank statements with steady deposits and low NSFs.
• Customer/seasonality profile (retail peaks, import cycles) to justify seasonal or skip payments.

Risk mitigants

• Acceptable: staged funding to milestones, holdbacks until SAT, performance warranty, service contract, insurance naming lender as loss payee.

Structures that get funded (and when to use them)

• Lease-to-own ($10/$1 buyout): For long-life core conveyors and main sorters you’ll keep 5–10 years.
• FMV/Residual lease (often 10–20%): Lowers the monthly and suits tech that you’ll refresh.
• Sale-leaseback / refinance: Unlock equity from installed assets to fund an expansion or add scanners now. See Refinancing & Sale-Leaseback.
• Hybrid: New modules on $10 buyout + software/integration on FMV for flexibility.

Apply in one shot via Leasing & Loans.

Bank vs. Private Lender (B/C/D): quick verdict

• Bank/Credit Union: Lowest headline rate, heavier covenants, stricter on used/private-sale components and integration-heavy SOWs.
• Private (B/C/D): Faster, milestone funding, comfort with mixed new/used, private sale elements, and non-standard layouts—priced to risk but tailored to your go-live date.

If receivables are lumpy while you ramp, pair the lease with Invoice Factoring or a Working-Capital/LOC so payroll and inventory aren’t squeezed.

What terms you’ll actually see (Canada, 2025 reality)

• Ticket size: ~$75k–$1.5M (module lines to full sortation cells)
• Term: 36–72 months (24–60 most common; 72 on newer systems with strong residual)
• Down payment: 0–10% on strong files/vendor installs; 10–30% for mixed used/private sale, startups, or softer credit
• Funding mechanics: Deposits → progress draws (delivery/install) → SAT holdback; PPSA, first/last in advance, proof of insurance
• Speed: Same-week funding on complete, milestone-based packages

Estimate payments with our calculator, then we’ll price both lanes.

The approval playbook (broker steps that de-risk your deal)

1. Package the asset properly
   Include vendor quote, BOM, drawings, project plan, service/warranty, SAT criteria, photos/specs for used gear.
2. Tell the throughput story
   Show before/after metrics: picks/hr, orders/hr, FTE reduction, error-rate improvement, payback months.
3. Choose the right structure
   Core conveyors on $10 buyout; rapidly evolving controls/scanners on FMV; equity unlock via sale-leaseback for down payment.
4. Stabilize banking 30 days pre-submit
   Clean 3–6 months statements; reduce NSFs; keep cash cushion visible. Overlay factoring/LOC if needed.
5. Pre-clear insurance & milestone schedule
   Lender named as loss payee; agree on staged draws tied to delivery, install, SAT.
6. Submit once, cleanly
   Application, IDs/registry, statements, insurance contact, vendor SOW/drawings, commissioning plan—via Leasing & Loans.

Snapshot: Which structure fits your conveyor plan?

Case pattern (Ontario e-commerce DC)

A 3PL needed a shoe sorter, merges/diverts, scanners, and controls refresh. Bank hesitated on used modules and integration risk. We placed a 60-month FMV lease with staged funding (deposit → delivery → install → SAT), plus a $150k LOC for launch inventory. Result: on-time go-live, lower monthly during ramp, clean cash conversion by peak.

Fast-track checklist

• Vendor quote/BOM, layout drawings, controls scope, commissioning plan (FAT/SAT)
• Photos/specs for used modules (rollers, drives, scanners)
• 3–6 months business bank statements
• IDs for owners ≥25%; corporate registry
• Insurance broker contact (lender as loss payee)
• Short use-of-funds note (throughput, labour savings, payback)

FAQs

Can private lenders fund mixed new + used conveyor packages?
Yes—common in B/C/D lending with proper documentation, inspections, and milestone draws.

Is FMV or $10 buyout better for automation?
If you’ll refresh scanners/controls, FMV keeps payments lower and upgrades easier; core conveyor frames often suit $10 buyout.

Can I raise a down payment without draining cash?
Use a sale-leaseback on existing equipment or add a working-capital/LOC.

What if receivables are slow during ramp-up?
Stabilize with invoice factoring on anchor accounts so payroll and parts are covered.

How fast can this fund?
With a complete, milestone-based package and insurance ready, same-week funding is common. Start with our calculator.

Why Mehmi (seller + financier)

We sell commercial assets and finance them—daily. Our credit team understands real liquidation values, integration risk, and what underwriters flag before it slows you down. We place files across 30+ Canadian lenders and tailor structures to your WMS/WCS roadmap.

Next step: Planning a conveyor or sorter upgrade? Feel free to contact our credit analysts for a friendly, pressure-free review: Contact Us.

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