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Compare dealer financing programs in Canada, including loans, leases, customer requirements, dealer payout, fees and a practical setup process.
A customer wants your equipment, understands its value and agrees with the price. The sale still stalls because paying the entire invoice would leave too little cash for payroll, materials or operating expenses.
A dealer financing program gives that customer another purchasing option. But adding a financing button is only the beginning. Your dealership also needs clear application responsibilities, accurate payment information and a reliable process for getting paid.
This guide covers business-purpose equipment and commercial-vehicle financing, not personal-use auto loans or consumer retail financing.
Quick Answer: Dealer financing programs in Canada let equipment sellers connect business customers with third-party loans or leases during the sale. The dealer supplies the equipment and transaction details; the lender or lessor decides credit and funds approved purchases. Suitability depends on equipment eligibility, customer cash flow, costs, provincial requirements and dealer-payout conditions.
A dealer financing program connects the equipment sale with a financing application. In a third-party arrangement, the customer obtains financing from a separate lender or leasing company rather than making instalment payments directly to the dealership.
The dealer remains responsible for selling and delivering the equipment. A financing brokerage can help prepare applications, identify potential financing sources and coordinate the transaction, while the applicable lender or lessor makes the final credit decision.
BDC’s equipment financing guide describes financing through manufacturers and independent leasing providers as alternatives to bank financing. (BDC.ca)
Keep the purpose clear: this article concerns financing your customer’s purchase, not borrowing money to stock your dealership’s inventory.
Choose the operating model separately from the financing product. A branded application, for example, can lead to either a loan or a lease.
A referral model provides a straightforward handoff. Your salesperson identifies the financing need, obtains the appropriate permission and introduces the customer to the financing partner.
This can be a sensible starting point when financing requests are occasional or your team does not need detailed application tracking.
A structured program adds consistent procedures: a designated application channel, standard equipment information, clear communication responsibilities and a defined funding process.
Consider this approach when several salespeople handle financing requests or incomplete handoffs regularly interrupt sales.
A branded application presents financing within the dealership’s customer experience. Embedded financing places that application within equipment listings, quotations or other purchasing steps.
Neither arrangement automatically makes the dealership the lender. The distinction between branding and funding is explained in Mehmi’s guide to white-label equipment financing for dealers.
A manufacturer-owned financing company is different again. BDC notes that manufacturer financing can include incentives on new equipment, while other transactions may require independent financing. Compare the actual offer rather than assuming a captive, bank or brokerage arrangement is always preferable. (BDC.ca)
Financing is worth discussing when a viable buyer needs productive equipment but prefers to spread the acquisition cost rather than exhaust available cash.
There is established demand for external financing. Statistics Canada’s 2023 Survey on Financing and Growth of Small and Medium Enterprises, released in February 2025, found that 49.3% of Canadian SMEs requested external financing in 2023. The survey covered businesses with 1–499 employees and annual revenue of at least CAD $30,000, with certain sectors excluded. This is not a dealer-financing approval rate or a forecast of sales improvement. (Statistics Canada)
For your dealership, start with actual transactions. Review where buyers paused because of upfront cash requirements, unsuitable financing or an unclear application process.
Do not assume every lost sale was a financing problem. Equipment suitability, price, delivery and customer demand still matter.
Start with your inventory and customers, not the number of lenders advertised.
Ask the prospective partner to review representative transactions: an established buyer purchasing new equipment, a used-equipment purchase and a more complex request. Establish which files fit, which require additional support and which fall outside the program.
Then examine the operational details. Who answers credit questions? Who follows up on missing documents? Who communicates approval conditions? Who confirms delivery authorization and dealer payment?
A brokerage can help evaluate different financing sources, but access to several lenders does not mean every application receives several offers. Mehmi’s explanation of working with an equipment-financing broker outlines the role of matching the borrower, asset and transaction to an appropriate provider.
Also request the proposed dealer agreement. Review exclusivity, customer communication, compensation, fees, cancellation provisions and any repayment or repurchase obligations.
A useful financing relationship should produce understandable offers and manageable closings, not merely more applications.
Providers need to assess repayment capacity and the equipment supporting the request. BDC identifies business information, financial statements, projections and the intended use of financing among the information lenders review. (BDC.ca)
Prepare an explanation of how the customer will support the payment after operating expenses and existing debt.
For a replacement purchase, identify the equipment being replaced and whether an existing payment will end. For expansion, explain the additional work, staffing and operating cash required.
Credit history and banking conduct can also affect assessment. Current arrears, unexplained returned payments or inconsistent financial information deserve attention before another submission. There is no responsible universal credit-score or revenue threshold for every Canadian dealer program.
Use the equipment financing documentation guide to help customers prepare without promising that one document package will satisfy every provider.
Document the equipment’s year, make, model, serial number or VIN, condition and purchase price. Include hours, kilometres, maintenance records and inspection information where relevant.
BDC notes that unfamiliar or specialized equipment can create valuation concerns for financing providers. (BDC.ca)
From a transaction-planning perspective, avoid extending repayment merely to achieve an attractive payment if the equipment is unlikely to remain productive throughout that period.
Ask how much cash the buyer can contribute without leaving the business unable to operate.
BDC states that its down-payment requirements depend on the financing structure, business risk and equipment. That illustrates why a provider’s policy should not be presented as a nationwide rule. (BDC.ca)
Explain the difference between a down payment and total cash due at signing using the equipment financing down-payment guide.
Assign responsibilities before sending the first customer through the program.
Your dealership should prepare its legal business information, equipment categories, typical transaction amounts, provinces served and proposed payment instructions. Ask the partner which onboarding documents it requires.
For customer transactions, organize information into three groups:
Keep sensitive information within the approved financing process. The online credit application guide for equipment dealers explains how to structure that handoff.
Give every active file an owner and a specific next action. “Waiting on financing” is not sufficiently precise; “customer must provide insurance evidence” is actionable.
Offer access to structures that fit the buyer’s intended use and ownership goals.
With a conventional equipment loan, the business purchases the equipment and repays the borrowing. With a lease, the lessor generally owns the equipment during the agreement, and the customer’s purchase, renewal or return rights depend on the contract.
A lease should not be described as automatically including maintenance, unrestricted upgrades or eventual ownership. BDC recommends examining purchase costs, lease payments, end-of-lease costs, insurance, maintenance and other operating implications when comparing alternatives. (BDC.ca)
A written loan-versus-lease quote comparison helps customers evaluate those differences.
Ask whether the payment schedule fits the business’s collection cycle. A seasonal business needs to assess obligations during slower months, not only during peak revenue periods.
Also separate equipment financing from working capital. BDC cautions against using operating credit for expensive, long-lived equipment because doing so can reduce liquidity. A temporary collection gap and ongoing operating losses require different responses. (BDC.ca)
Separate dealer-side costs from customer borrowing costs.
For the dealership, ask about onboarding charges, platform fees, transaction deductions and promotional-rate subsidies. Confirm whether any referral compensation can be reversed after cancellation, early repayment or another contractual event.
For the customer, obtain an itemized offer showing the financed amount, payment frequency, term, financing charges, fees and any final purchase obligation. Confirm whether charges are paid upfront or added to the balance.
Mehmi’s guide to comparing equipment financing fees in Canada provides a framework for reviewing these costs.
Examine early payout separately. Permission to repay early does not necessarily mean all remaining financing charges disappear. Ask for the contractual calculation and review the Canadian equipment-financing prepayment guide.
A free-to-join dealer program does not mean free borrowing for the customer.
Assume a Canadian business purchases equipment for CAD $100,000 before tax and contributes CAD $10,000, leaving CAD $90,000 financed.
For this mathematical illustration, assume a fixed 9.00% nominal annual interest rate, calculated monthly, over 60 months. Payments occur at the end of each month, beginning one month after funding. There is no balloon payment.
Assume a CAD $500 documentation fee paid separately at closing, with no other financing fees. Exclude GST/HST, PST/QST, registration, insurance, inspections, delivery, installation and maintenance.
Under these assumptions:
The monthly payment is approximately CAD $1,868.25. Total scheduled loan repayment is approximately CAD $112,095.12, including CAD $22,095.12 in interest.
Adding the documentation fee produces a financing cost of approximately CAD $22,595.12. Including the down payment, total cash outlay is approximately CAD $122,595.12, before excluded costs. Totals use unrounded calculations; the final payment may require a minor rounding adjustment.
The 9% assumption is not an all-in APR incorporating the separate fee. This example is not a Mehmi offer, available-rate claim or customer result.
Suppose the business forecasts CAD $3,000 monthly cash available after operating expenses, tax provisions and existing debt, but before this new payment. Approximately CAD $1,131.75 would remain. Test that remaining cushion against slower collections and repairs before proceeding.
Use the loan section of Mehmi’s CAD equipment financing calculator to explore different purchase amounts and terms. Its estimates exclude sales taxes; account for separately paid fees outside the payment calculation.
Follow the transaction’s written funding instructions. Do not treat an approval email as permission to release equipment.
Outstanding conditions can include signatures, insurance, verified payment details, customer contributions, corrected invoices, existing-lien payouts or delivery acceptance. The sequence matters when a provider requires acceptance before funding but the dealership expects payment before release.
Resolve that difference before scheduling delivery. Never ask a customer to confirm delivery or acceptance that has not occurred.
The guide to how vendors get paid when customers finance explains the distinction between approval, closing conditions and payment.
Read recourse provisions carefully. Recourse concerns circumstances in which the financing provider can seek payment or another remedy from the dealer. Ask specifically about ordinary customer default, fraud, misrepresentation, non-delivery, refunds and equipment disputes.
Do not translate “non-recourse” into “the dealership has no contractual responsibilities.”
In Ontario, the Personal Property Security Registration system supports registrations and searches concerning security interests under the PPSA. Quebec uses the RDPRM, which publishes rights affecting movable property, including vehicles and business assets. These are distinct legal systems. (Personal Property Ontario)
Agree with the financing provider on responsibility for searches, registrations, existing payouts and releases. Accurate business names and equipment identifiers are essential transaction inputs.
Canada’s privacy regulators emphasize explaining what personal information is collected, why it is needed and with whom it will be shared. Applicable obligations differ under PIPEDA and provincial privacy legislation. Follow the official meaningful-consent guidance when designing the application process. (Office of the Privacy Commissioner)
Show applicable taxes clearly and ask the customer’s accountant to confirm treatment. CRA permits eligible GST/HST registrants to claim input tax credits to the extent purchases support commercial activities and the relevant conditions are met. Do not promise every buyer a full tax recovery. (Canada)
Have qualified advisers confirm any licensing, advertising and contract-language requirements for the dealership’s actual activities and provinces served.
Mehmi Financial Group operates as a financing brokerage and intermediary, not a direct lender. Its published vendor financing program includes branded applications, document uploads, application tracking and assistance comparing available financing approvals. Final credit and funding decisions remain with independent financing providers. (Mehmi Group)
Start by discussing your equipment mix, customers and existing financing relationships. Confirm Canadian availability and the proposed workflow rather than assuming every asset or applicant fits.
After launch, track completed applications, approvals that actually fund, reasons for cancellation and unresolved closing conditions. Use those results to improve the process—not to pressure customers into borrowing.
Ask whether the proposed agreement is exclusive. Where permitted, an additional relationship can be evaluated for transactions that do not fit your existing arrangement. Avoid submitting the same application through several channels without coordination and appropriate customer authorization.
Potentially. Ask the partner to assess age, condition, value, ownership and remaining useful life before quoting terms. Provide service records or inspection information where available. A financing approval is not a mechanical warranty.
Some providers consider more complex applications, but another submission does not guarantee approval. Identify the original obstacle first. Limited operating history, unresolved arrears, insufficient cash flow and unsuitable equipment require different responses.
Do not assume either outcome. Ask whether a guarantee is required and obtain its terms before the customer signs. A personal guarantee creates a personal obligation under its wording; it is separate from security taken over the equipment. (Mehmi Group)
Ask for approval of the complete structure, including asset schedules, suppliers and delivery milestones. A combined approval does not automatically establish when each supplier will be paid. The fleet and multi-unit dealer guide addresses these arrangements.
When the payment depends on optimistic revenue, the required contribution would exhaust operating cash, or the equipment does not solve a demonstrated business need. Consider a smaller purchase, temporary rental, repairs to existing equipment or waiting for confirmed work.
Bring a representative transaction rather than only asking for a headline rate.
Share your typical financing amount, Canadian province, equipment sold, customer use of funds and required delivery or program-launch timing. These details help determine whether the financing process fits the sales your dealership actually handles.
Call Mehmi Financial Group at 833-863-4644 or contact the team about customer financing.
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