Equipment Financing Interest Rates

Understanding Equipment Financing Interest Rates

When financing commercial equipment—whether trucks, construction machinery, or medical devices—interest rates are a key factor in total cost. The right rate can save your business tens of thousands over the term of a loan or lease.

In Canada, equipment financing rates vary widely based on:

• Type of financing: Loans vs leases
• Credit profile: Business credit score, personal credit of owners
• Asset type and age: New equipment often qualifies for lower rates; used assets may carry higher rates
• Term length: Shorter terms generally have lower rates but higher monthly payments
• Down payment: Larger contributions reduce the financed amount and can lower the rate

Mehmi Financial Group offers flexible equipment financing programs with competitive rates tailored to your business needs.

Using an equipment financing calculator allows startups to forecast monthly obligations under various rate scenarios and plan for seasonal or project-based cash flow.

Geographic Considerations

Interest rates are generally consistent across Canada, but provinces with different sales taxes, equipment incentives, and lending regulations can affect total cost. Major cities where businesses frequently purchase equipment include:

• Toronto, ON
• Mississauga, ON
• Brampton, ON
• Vancouver, BC
• Calgary, AB
• Edmonton, AB
• Montreal, QC
• Ottawa, ON
• Winnipeg, MB
• Quebec City, QC
• Halifax, NS
• Saskatoon, SK

Local lenders, municipal programs, or tax incentives may slightly adjust the effective rate.

Case Study: Securing a Competitive Rate

Business: Calgary construction contractor
Equipment Needed: Excavator and skid steer
Challenge: Limited cash reserves but strong contracts in place
Strategy:

• Modeled multiple financing options using calculator
• Selected a 48-month loan with a 15% down payment
• Negotiated a 7.5% APR with Mehmi’s lender network
  Outcome: Monthly payments manageable, financed 100% of new equipment, improved job bidding capacity

FAQ: Equipment Financing Rates

Q: Are rates fixed or variable?
A: Most equipment loans offer fixed rates for predictability. Lines of credit may have variable rates tied to prime.

Q: Can I refinance to get a lower rate?
A: Yes, equipment refinancing can reduce interest costs and monthly payments.

Q: How do lease rates compare to loan rates?
A: Lease “implicit rates” can be lower than loans but you don’t own the asset until buyout. Best for cash-flow-sensitive businesses.

Q: Do startups qualify for competitive rates?
A: Startups may face slightly higher rates but can access in-house financing or partial collateral options.

Q: Can I finance used equipment?
A: Yes, with slightly higher rates; eligibility depends on age, condition, and asset type.

Take Control of Your Equipment Financing Today

Interest rates define your monthly payment and total cost. By comparing loan, lease, and line of credit scenarios, using a financing calculator, and working with Mehmi Financial Group, Canadian businesses can secure the best terms available.

Are you looking for a truck? Check our used inventory and see what can be financed today.

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