Equipment Loan Down Payment

For most Canadian SMEs, the typical down payment on an equipment loan lands around 10%–20% of the purchase price. With prime credit and strong cash flow, some deals approve at 0%–10%. Startups or credit-challenged files may see 20%–35%+. Used, older, or specialty assets often require more. If minimizing upfront cash is critical, consider a lease (first/last plus fees instead of a classic down), or a sale-leaseback on gear you already own.

Run your own scenarios with the calculator and compare loans vs leases.

What drives the down payment

• Credit & time in business: Lower risk = lower equity requirement.
  
  
• Asset type/age: Newer, liquid equipment needs less equity than older/specialty gear.
  
  
• Deal structure: Lease residuals reduce upfront; loans rely more on down payment.
  
  
• Invoice & documentation: Dealer quotes are simpler; private sales can add equity.
  
  
• Cash flow strength: Solid bank statements and DSCR support lower down.
  
  
• Soft costs & taxes: Many programs finance delivery/installation/taxes—model this in the calculator.
  
  

Ways to reduce upfront cash

• Use a lease with a residual to shift cost to end-of-term.
  
  
• Leverage a sale-leaseback on owned gear to inject cash and support lower down on the new unit.
  
  
• Provide a guarantor or extra collateral (e.g., pair with asset-based lending).
  
  
• Choose the right term (48–72 mo) and ticket (age/hours) to fit lender appetite.
  
  
• Ask about in-house financing for flexible structures.
  
  

Case study

A BC landscaping startup needed a used skid steer (~$58k). Bank wanted 30% down. We modeled a lease with 10% residual plus a small sale-leaseback on a trailer they owned. Upfront cash fell to ~6% equivalent, monthly fit the budget, and they secured a municipal contract.

FAQs

How much down is “normal”?
Most loans close at 10%–20%, with 0%–10% for prime files and 20%–35%+ for startups/credit challenges.

Can I do $0 down?
Sometimes—typically with strong credit/cash flow and newer assets. Otherwise, consider a lease to minimize upfront.

Do leases require a down payment?
Leases usually take first/last payment + fees (often ~0%–5% equivalent) instead of a classic down payment, plus a buyout at term.

Does used equipment need more down?
Often yes—age/hours and resale risk can push equity higher.

Can taxes and delivery be financed?
In many programs, yes. Include them in the calculator and we’ll structure accordingly.

How do I get a lower down payment approved?
Stronger documentation, residual leases, added collateral/guarantor, or a sale-leaseback.

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Are you looking for a truck? Look at our used inventory.
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Ready to structure your deal? Feel free to contact our credit analysts via Contact Us, or compare scenarios for loans, leases, and equipment LOC. Check asset fit on Eligible Equipment.