Equipment Loans in Canada & How to Qualify with Bad Credit

What is an equipment loan?

An equipment loan is a fixed-term facility used to buy business equipment (e.g., trucks, excavators, CNC machines, ovens, medical devices). You borrow the purchase price (often plus taxes/soft costs), make monthly payments over 24–84 months, and the lender takes a security interest in the asset until it’s paid off. Model scenarios in our calculator and see Equipment Loans.

If cash flow or upgrade cycles matter, compare Equipment Leases or a flexible Equipment Line of Credit. We also structure Refinancing & Sale-Leaseback and Asset-Based Lending.

Can you get an equipment loan with bad credit?

Yes—structure wins even when your score is bruised. Lenders look at the whole file: time in business, cash flow, down payment, asset age/resale, guarantees, and contracts/POs. Many approvals happen below prime when we match the asset and terms to your cash flow.

Fast playbook for bad-credit approvals (Canada)

1. Pick liquid equipment. Newer/common models underwrite better. Check Eligible Equipment.
   
   
2. Right-size the structure. If a loan strains the monthly, a lease with a modest residual often improves approvals while keeping an ownership path. See Leases.
   
   
3. Add equity or collateral. Even 10–20% down or pairing with ABL can tip a decision.
   
   
4. Leverage what you own. Use sale-leaseback to unlock cash and strengthen the new purchase.
   
   
5. Document cash flow. Provide 3–6 months bank statements and any contracts/POs to prove payment capacity.
   
   
6. Consider in-house or government options. Ask about In-House Financing and eligibility under the Canada Small Business Financing Program.
   
   
7. Avoid over-long terms. Match amortization to the asset’s useful life to keep lenders comfortable—and your total cost controlled.
   
   
8. Pre-model your target payment. Use the calculator; bring a realistic payment range to underwriting.
   
   

Quick comparison for bruised credit

What documents to prepare (speeds approvals)

• Government ID, void cheque
  
  
• Invoice/bill of sale with year/hours/km/serials
  
  
• 3–6 months bank statements (and YTD financials if available)
  
  
• Any contracts/POs/backlog supporting cash inflows
  
  
• Ownership list of existing equipment (for potential sale-leaseback)
  
  

Industry notes

• Transportation & Trucking: Late-model tractors/trailers often qualify well. See Transportation and Trailer Financing.
  
  
• Construction & Contractors: Hours/maintenance history matter; explore Construction and Construction Equipment expertise.
  
  
• Manufacturing & Wholesale: Consider a loan + ABL blend. See Manufacturing & Wholesale.
  
  

Are you looking for a truck? Look at our used inventory. Mehmi also sells equipment directly.

FAQ

Is bad credit an automatic decline?
No. With the right asset, equity, and structure, approvals are common below prime.

What credit score is usually enough?
Many approvals occur around 650+, but lower scores can work if the structure is strong.

How much down payment will I need?
Loans often land 10%–20%; leases typically take first/last plus fees.

Can I finance private-sale or used equipment?
Yes—documentation and asset condition matter. Start on Loans or Leases.

How fast can I be approved?
Clean files often clear in 24–48 hours with specialized programs.

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If you want a tailored path for your file, feel free to contact our credit analysts via Contact Us or run payment options now in the calculator.