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Learn how B2B distributors can offer customer financing in the U.S. and Canada without carrying customer loans on their own books.
A business customer may need the equipment you distribute but prefer not to pay $50,000, $150,000 or $500,000 in cash upfront.
That creates a financing opportunity for industrial distributors, equipment wholesalers and other B2B suppliers.
Instead of sending the buyer away to arrange financing independently, a distributor can make loans, leases or other financing options part of the sales process while a third-party finance provider handles underwriting and funding.
Quick Answer: Distributors can offer customer financing by partnering with banks, equipment finance companies, lessors or financing brokerages. The distributor provides an accurate quote and introduces financing, while the finance provider reviews the business, transaction and collateral. The distributor gets paid after funding conditions are satisfied without necessarily carrying the customer's multi-year debt itself.
The simplest model is third-party vendor financing.
Your distribution company remains the seller.
A separate finance provider extends the credit.
The customer selects the equipment, completes an application and, if approved, signs the applicable financing agreement with the lender or lessor.
Your sales team stays involved in the purchase without making the credit decision.
This can begin with a simple referral process. A salesperson sends the customer a secure application link and provides the finance provider with the quote.
More developed distributors can use co-branded applications, payment estimates, CRM workflows or embedded-financing tools.
Mehmi's existing guide on offering financing explains the basic progression from simple referrals to branded and embedded programs. How to Offer Financing to Your Equipment Customers
For Canadian distributors building a repeatable workflow, the third-party dealer-program guide explains how credit, documentation and vendor payment can sit outside the distributor's balance sheet. Dealer Finance Program Canada: Third-Party Setup
The important distinction is that your company is facilitating access to financing, not promising a particular credit result.
A distributor often sells a broader and more complicated basket of products than a single-brand dealer.
One order might contain a CNC machine from one manufacturer, tooling from another supplier, freight, installation, software and training.
Another customer might purchase forklifts, chargers and warehouse equipment as one project.
A distributor may also carry demo units, used equipment and several competing manufacturers.
That creates a documentation challenge.
The finance provider needs to know exactly what portion of the invoice represents durable, identifiable equipment and what portion represents services, consumables or other soft costs.
A $250,000 invoice is not automatically $250,000 of equipment collateral.
The distributor should therefore make the quote easy to understand before sending the customer to underwriting.
The strongest candidates are usually durable commercial assets with a meaningful useful life.
That can include manufacturing machinery, packaging equipment, forklifts, construction equipment, trucks, trailers, agricultural equipment, commercial kitchen equipment, compressors, generators and other identifiable business assets.
The finance provider can consider factors such as equipment type, age, condition, purchase price and resale market.
Consumable goods are different.
Raw materials, inventory, replacement supplies and other goods that will quickly be sold or consumed may fit a working-capital loan or revolving line better than conventional equipment financing.
This distinction matters for distributors that sell both equipment and supplies.
For example, financing a $120,000 packaging machine over several years may make sense.
Financing $120,000 of packaging film over the same term usually does not, because that material will be consumed long before the financing ends.
The financing structure should match what is actually being purchased.
Itemize the quote.
Do not make an underwriter reverse-engineer a $300,000 “production package.”
Where applicable, identify the machine, make, model, year, serial number, attachments and price separately.
Then identify freight, installation, training, software, warranty products and other services.
That does not mean those additional costs cannot be financed.
Some finance providers may include eligible soft costs when they are directly connected to the equipment acquisition.
The point is that the lender needs to know what those costs are.
Canadian customers preparing a complete equipment file can use Mehmi's application checklist to see why the vendor invoice, asset description and borrower information have to align. Equipment Financing Application Checklist
Mehmi's document guide also explains why private sales, used equipment and more complicated transactions require additional verification. Documents Needed for Equipment Financing
Before price becomes the reason the customer delays the order.
Suppose a manufacturer is interested in a $175,000 production machine.
The distributor's salesperson can ask:
“Are you planning to pay cash, use your existing bank, or would you like to review financing options?”
That keeps the conversation neutral.
A financially strong company may still prefer financing because paying cash would reduce working capital available for materials, payroll or another project.
Financing should therefore be introduced as a capital-allocation option rather than only as a solution for customers that cannot afford the purchase.
The same approach can appear on written proposals, websites and follow-up emails.
The distributor should still show the cash price clearly.
Financing is another way to pay for the purchase, not a replacement for transparent pricing.
Yes, provided the payment is presented as an estimate rather than an approval.
The calculation should use a defined purchase amount, assumed rate or pricing, term and payment frequency.
Important exclusions should be clear.
A distributor should not simply advertise:
“Only $2,500 per month.”
Without the assumptions, that number tells the customer very little.
The term might be unusually long. A lease might include a substantial buyout. Taxes or fees may not be included.
Canadian distributors can use Mehmi's equipment financing calculator for CAD estimates and scenario planning. The calculator itself states that its results are estimates rather than financing offers. Equipment Financing Calculator
Sales teams should also understand why a lease quote cannot always be compared directly with a loan payment. Mehmi's line-by-line comparison guide explains the importance of fees, residuals, buyouts and total cash out. Loan vs. Lease Quote Comparison
Keep the menu manageable.
A customer buying equipment for long-term ownership may prefer an equipment loan or finance agreement.
Another customer may prefer a lease because it wants different upfront cash requirements or end-of-term flexibility.
A repeat buyer making several purchases throughout the year may benefit from a revolving equipment or business credit facility where available.
A customer whose order contains large amounts of inventory, consumables or project costs may need working capital rather than asset financing.
The distributor should not try to select the final credit product itself.
The sales team's job is to identify what the customer wants to buy and why.
The finance partner's job is to determine what structure is supportable.
Mehmi's Canadian customer-financing menu provides a useful example of keeping the choices simple instead of overwhelming buyers with too many structures. Customer Financing Menu: Two Options Dealers Need
Repeat purchasing can make financing especially useful.
Imagine a manufacturing customer that buys one machine this quarter and plans to add several more units over the next year.
Starting a completely new financing process from zero for every purchase can create unnecessary friction.
A financing partner may be able to establish a repeat-buyer process or revolving facility for a financially strong customer, subject to ongoing credit approval.
The buyer may still need to provide updated information, and every asset still needs to meet the financing provider's rules.
But the workflow can become much more efficient.
This is particularly relevant for distributors supplying growing fleets, warehouses and production facilities.
A distributor should track financed customers in its CRM so the salesperson knows whether the buyer has an existing financing relationship before sending it back through a completely unrelated process.
The lender or lessor needs to understand repayment capacity.
Cash flow matters because the new payment must fit after payroll, rent, taxes, suppliers and existing debt.
Credit history can influence approval and structure, but there is no responsible universal score that applies to every distributor customer.
Operating history provides evidence that current revenue is established rather than projected.
Existing leverage matters too.
A company can generate millions of dollars in annual revenue and still have very little room for another payment if substantial debt is already being serviced.
When equipment secures the financing, collateral also becomes part of the decision.
The lender may consider age, condition, market value, useful life and resale demand.
Vendors should understand these factors without trying to make the underwriting decision themselves.
Focus on the information you control.
Use the customer's correct legal business name.
Provide a complete quote.
Identify equipment accurately.
Explain whether the equipment is new, used or demo inventory.
Separate material soft costs.
Disclose trade-ins.
Keep serial numbers and delivery information accurate.
Then send the customer through the approved finance process.
The fastest distributor financing programs are generally not fast because they skip credit work. They are efficient because the transaction arrives in a form that is easy to understand.
Mehmi's vendor-program setup checklist focuses on that operational discipline rather than simply promising fast decisions. Vendor Program Setup Checklist
The customer-financing mistakes guide also explains why inconsistent quotes, incomplete documents and poorly explained payments can turn workable transactions into stalled ones. Customer Financing Mistakes to Avoid
Make the condition transparent.
Used equipment can be financeable, but it generally creates more collateral questions than a new machine.
The financing provider may want the equipment's year, operating hours or mileage, serial number, maintenance history, current condition and supported market value.
Demo equipment should also be described accurately.
Do not represent a heavily used demonstration unit as factory new simply because the distributor still owns it.
Older or more specialized equipment may require a shorter term, larger customer contribution or additional valuation support.
Mehmi's used-equipment guide explains why remaining useful life and resale demand can change the financing structure. Used Equipment Financing Guide
This matters when a large order does not arrive all at once.
A distributor may need deposits from the customer or finance provider before equipment is manufactured, imported or configured.
The balance may be due at shipment, delivery, installation or final acceptance.
Those milestones should be discussed with the finance provider before the distributor promises a payment schedule.
A lender may be willing to finance an approved deposit or progress payment, but advancing money before final equipment exists changes the risk.
The finance provider may therefore require stronger documentation around the manufacturer, build schedule, equipment specifications and acceptance process.
Do not assume that a normal approval automatically means the lender will fund every supplier deposit.
Assume a U.S. industrial distributor is selling a business customer a machine and related equipment for USD $150,000.
For illustration only, assume:
Amount financed: USD $150,000.
Assumed annual interest rate: 8.75%.
Term: 60 months.
Payment frequency: monthly.
Assume no down payment for this mathematical example.
Exclude sales tax, documentation charges, UCC filing costs, freight, installation, software, insurance, warranties and maintenance.
The estimated monthly payment is approximately USD $3,095.58.
Estimated total repayment across 60 monthly payments is approximately USD $185,735.09.
Estimated financing cost under those assumptions is approximately USD $35,735.09.
This is an illustrative calculation only. It is not a Mehmi Financial Group rate, financing offer, approval or customer result.
The customer should compare the $3,095.58 payment with the financial benefit expected from the machine.
If the equipment removes a production bottleneck and creates $8,000 of incremental monthly contribution after operating expenses, the purchase may have a supportable business case.
If the equipment is unlikely to be used enough to cover the payment, financing does not improve the economics.
The distributor should therefore sell the equipment's business value without presenting the financing approval as proof that the purchase itself is financially wise.
Business financing in the United States remains subject to federal credit rules.
The CFPB's current Regulation B states that covered business-credit transactions include business loans, lines of credit and credit cards, subject to applicable exclusions.
That is one reason distributors should let the appropriate creditor control the actual credit decision rather than creating informal approval standards inside the sales team.
For secured equipment financing, Article 9 of the Uniform Commercial Code is also important.
UCC §9-310 states the general rule that filing a financing statement is required to perfect many security interests, subject to listed exceptions.
The financing provider should determine the collateral, filing jurisdiction and perfection requirements.
The distributor's responsibility is to provide accurate equipment and transaction information.
State licensing, brokering and commercial-finance disclosure laws can add further requirements, so distributors operating nationally should confirm their permitted role rather than assuming one process applies in every state.
Canada uses provincial secured-credit systems rather than U.S. UCC Article 9.
Ontario's PPSR allows creditors to register notices of security interests in personal property and allows searches to determine whether security interests have already been registered. Registration helps establish priority between competing interests.
Quebec uses the RDPRM. The Quebec government explains that this register can indicate whether business assets and other property have been given as security or are affected by debt.
That becomes particularly important when a distributor sells used or demonstration equipment or accepts assets on trade.
Privacy matters as well when financing involves information about individual owners or guarantors.
Where PIPEDA applies, Canada's Office of the Privacy Commissioner states that organizations generally need meaningful consent for collecting, using and disclosing personal information and that people must understand the nature, purpose and consequences of that processing.
A practical distributor workflow is therefore to let the finance provider's secure application collect sensitive credit information while the distributor focuses on the sales transaction.
Sometimes, but understand what that means.
If you deliver $150,000 of equipment and let the customer pay your company over three years, you have effectively funded the transaction yourself.
Your cash stays tied up in the receivable.
Your team must collect the payments.
Your company absorbs the risk if the customer stops paying.
Traditional trade credit can still make sense for short periods and strong repeat customers.
But financing large commercial purchases over several years requires a much more deliberate credit and collections infrastructure.
A third-party financing program lets the distributor preserve its own working capital and focus on selling and servicing products instead.
When financing does not solve the real problem.
A customer with continuing losses may not benefit from another fixed payment.
A buyer ordering equipment that it has no clear need or utilization for may be better off waiting.
A customer may also need a smaller order rather than a longer financing term.
The distributor should avoid using monthly payments to hide an uneconomic purchase.
Financing works best when it removes a capital-timing barrier from a business purchase that already makes operating sense.
Yes. A distributor can partner with banks, equipment finance companies, lessors or financing brokerages rather than lending its own money.
Potentially. Available structures depend on the finance provider, customer and asset. The customer should understand ownership, buyouts and end-of-term obligations before choosing.
Sometimes. Certain providers may finance eligible soft costs directly related to an equipment purchase. These costs should be itemized rather than hidden in the equipment price.
Potentially. The financing provider may place additional emphasis on equipment age, condition, operating hours, market value and ownership.
Potentially. A bundled equipment package may be financeable, but each significant asset should be clearly identified so the finance provider understands what supports the financing amount.
Equipment financing may not be the right product for goods that will quickly be consumed or resold. A business line of credit or working-capital facility can sometimes fit those purchases better.
In a typical third-party vendor transaction, the distributor is paid after required financing documents and funding conditions are completed. Exact payout procedures depend on the program and transaction.
Not automatically. Vendor recourse, repurchase requirements and other obligations depend on the actual program agreement. Distributors should review those terms rather than assuming every third-party program transfers all risk.
Mehmi Financial Group operates as a financing brokerage and intermediary rather than a direct lender.
Mehmi's current homepage says its vendor program supports businesses that sell, manufacture or distribute equipment and allows customer financing to be offered at the point of sale, while financing remains with the applicable third-party provider.
If your distribution company wants to add financing, be prepared to discuss your typical financing amount, whether your customers are in the United States or Canada, the states or provinces you serve, the equipment or products you distribute, the customer's intended use and normal transaction timing.
Call Mehmi Financial Group at 833-863-4644 or use the current contact page. The page confirms the toll-free number.
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