Equipment financing isn’t one product; it’s a toolkit. A deal’s structure combines the asset, borrower profile, lender channel, term and rate, security, and—if leasing—the residual/buyout. Below is a clear, Canada-focused breakdown so you can choose the right path and model payments before you commit.
The building blocks of a deal
- Facility type: loan, lease, line of credit, or refinance/sale-leaseback.
- Term & amortization: usually 24–84 months (longer for long-life assets).
- Rate & fees: fixed/variable pricing plus documentation fees.
- Security: lien on the equipment; personal/corporate guarantees are common.
- Residual/buyout (leases): $10, 10%, or FMV shapes monthly cost and end-of-term options.
- Documents: invoice or bill of sale, equipment details (year/hours), bank statements/financials.
Start at the Equipment Financing hub and run options in the calculator.
Core structures in Canada
| Structure | Ownership Path | Upfront | Monthly Profile | End of Term | Best For | Learn More |
| Equipment Loan |
Own during/after |
~0%–20% down |
Fixed amortization |
Own free & clear |
Long-life assets |
Loans |
| Equipment Lease |
Own at buyout |
First/last + fees |
Lower via residual |
$10 / 10% / FMV |
Cash-flow focus, tech |
Leases |
| Equipment Line of Credit |
Own per draw |
Minimal on setup |
Interest on draws |
Convert to term |
Rolling purchases |
Equipment LOC |
| Refinancing & Sale-Leaseback |
Sell then lease back |
N/A (liquidity in) |
Lease payment |
Buyout/continue |
Unlocking cash |
Sale-Leaseback |
| Asset-Based Lending |
Loan on assets |
Depends on advance |
Revolving/term |
Paydown/refi |
Working capital + capex |
ABL |
| Conditional Sales Contract |
Title at payoff |
Similar to loan |
Fixed schedule |
Title transfers |
Dealer/private sale |
CSC |
Other specialized options: In-House Financing for thin files; Truck Repair Financing to spread rebuilds.
How lenders underwrite
- Credit & time in business: stronger histories lower rate/equity asks.
- Cash flow & leverage: bank statements, DSCR, existing obligations.
- Equipment strength: age, hours, resale liquidity.
- Deal structure: down payment vs residual; term vs useful life.
- Industry risk: trucking, construction, manufacturing each price differently.
See industry pages: Transportation & Trucking, Construction & Contractors, Manufacturing & Wholesale. Check Eligible Equipment and our inventory (Mehmi sells equipment directly).
Typical lifecycle and documents
- Discovery & quote: asset details, target payment, term.
- Application & docs: IDs, void cheque, bank statements, invoice/bill of sale.
- Underwriting & approval: conditions, rate/term/residual.
- Docs & funding: execution, vendor paid; you take delivery.
- Servicing: insurance, renewals, buyout/refi options.
If cash is tight at start-up, blend with Working Capital Loan or Invoice/Freight Factoring. Eligible borrowers may also explore the Canada Small Business Financing Program.
Choosing the right structure
- Ownership & lifespan: keep it long? favour a loan.
- Cash-flow priority or rapid tech cycles: consider a lease with a modest residual.
- Frequent purchases: stand up an equipment LOC.
- Need liquidity now: sale-leaseback on gear you own.
- Working capital alongside capex: pair with ABL or working capital.
Model all of the above in minutes with the calculator, then feel free to contact our credit analysts via Contact Us.
FAQ
What term lengths are typical?
Most facilities run 24–84 months; long-life assets can go longer if credit supports it.
How do leases lower my monthly cost?
Residuals defer part of principal to end-of-term (e.g., 10% or FMV), cutting monthly payments.
Can I finance used or private-sale equipment?
Yes—pricing and equity may be higher. Start on loans or leases.
What if I already own equipment?
Use a sale-leaseback to unlock cash while keeping the asset in service.
Are repairs financeable?
Yes—see Truck Repair Financing for rebuilds/overhauls.
How do I keep total cost down?
Match term to useful life, avoid over-long amortizations, and compare loan vs lease on the calculator.
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