How to Combine Equipment Loans, Leases & Credit Lines

When your business grows, so do your capital needs—and one financing product rarely covers everything.

Buying a new CNC machine? That’s a job for a term loan.
Need to equip delivery vans? Consider leasing.
Handling fluctuating costs or install expenses? A line of credit might be the flexible tool you need.

The smartest operators don’t pick one—they combine them intelligently to match the purpose, cash flow profile, and lifecycle of each need.

This guide will show you:

• When to use loans, leases, and credit lines
• How to structure them together
• Mistakes to avoid when layering financing
• A real-world example of coordinated funding

Why Use Multiple Financing Products?

Using just one tool (like a term loan) for every capital need can leave you:

• Overcommitted to fixed payments
• Paying high rates for short-term needs
• Missing out on tax and flexibility advantages

Instead, match the right product to the right purchase, and you’ll:

✅ Preserve working capital
✅ Lower borrowing costs
✅ Increase approval odds
✅ Build a stronger balance sheet

Tool Overview: Loans vs. Leases vs. Credit Lines

Explore:

• Leasing & Loans
• Working Capital & LOC

Example: Coordinated Financing for a Manufacturing Upgrade

Business: Ontario-based metal fabricator expanding operations

Equipment & Costs:

• $225K CNC laser cutter
• $65K in vehicle upgrades (2 vans)
• $18K in installation tools, wiring, HVAC upgrades

Financing Strategy:

• Term Loan: 60-month loan for CNC, 100% financed
• Vehicle Lease: 48-month lease on vans with $1 buyout
• LOC: $25K line of credit for install and tools, drawn as needed

Result:

• Lower monthly obligations than one large loan
• Tools and HVAC paid down within 6 months
• Preserved cash flow and qualified for future credit at better rates

How to Combine Financing Products Wisely

✅ Match Terms to Asset Lifespan

Use long-term loans for long-life equipment, leases for mid-term use, and LOCs for short-term liquidity.

✅ Separate Fixed and Flexible Debt

Keep core asset payments predictable, while using revolving credit only for variable or seasonal expenses.

✅ Use Leases Strategically

Leasing is ideal for:

• Equipment with rapid depreciation (tech, vehicles)
• When you want to preserve balance sheet flexibility
• When you want off-balance-sheet expense treatment

✅ Don’t Stack Debt Without a Plan

Coordinate repayment schedules. Avoid overlap where large payments hit at once across products.

Mistakes to Avoid

🚫 Using a line of credit for big-ticket purchases
You’ll tie up your liquidity and may pay more interest long-term.

🚫 Leasing tools that will be obsolete in 6 months
Short-term leases can be costly. Buy short-use items outright or via LOC.

🚫 Overlapping repayment terms across high-volume months
Map your cash flow calendar to avoid bottlenecks.

🚫 Not tracking multiple obligations in one view
Use accounting software or a simple spreadsheet to track total exposure, interest, and payoff timelines.

Tips for Coordinating Financing Products

✅ Work with a financing partner who understands multi-product structuring
✅ Use one broker or analyst to keep terms aligned
✅ Ask about bundling certain assets (e.g. lease vehicle + upfitting)
✅ Monitor your debt-to-revenue ratio quarterly
✅ Reassess your capital stack annually for refinancing opportunities

FAQs: Combining Equipment Financing Tools

Can I apply for all three products at once?
Yes. In fact, many businesses secure a loan, lease, and LOC through a coordinated application with Mehmi.

Will it hurt my credit to apply for multiple products?
Not if done through one broker. We pull soft credit first, then match you to multiple lenders strategically.

How do I know how much LOC is safe to use?
Limit your usage to what you can repay within 3–6 months. Use it as a working buffer, not long-term debt.

Can I refinance later if my business grows?
Absolutely. Many clients refinance their original loan or lease into better terms once their revenue or credit improves.

Final Word: Think Like a CFO—Even if You're the Founder

Smart financing isn’t just about getting approved—it’s about designing a capital strategy that fuels growth while protecting cash flow.

Whether you’re scaling operations, replacing aging assets, or launching new revenue lines, combining the right tools at the right time gives you power and flexibility.

At Mehmi, we help Canadian business owners finance with foresight—not just convenience.

Want help structuring the right mix of financing products?
Talk to a credit analyst or use our calculator to compare term loans, leases, and lines in one place.

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