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Learn how U.S. and Canadian B2B sellers can offer customer financing through third-party providers without funding customer loans themselves.
A customer can want your equipment, machinery or commercial product and still hesitate at a $75,000, $150,000 or $500,000 upfront purchase.
You do not necessarily need to lend the customer your own money to solve that problem.
A third-party vendor financing program lets you put financing directly into the sales process while a bank, lessor, equipment finance company or financing brokerage handles the actual credit transaction.
Your company continues selling. The financing provider underwrites, documents and funds approved deals.
Quick Answer: You can offer financing without becoming the direct lender by connecting customers with third-party commercial finance providers. Your sales team introduces financing and supplies accurate transaction information, while the lender or lessor controls underwriting, approval and final credit terms. Your exact regulatory obligations still depend on your activities and jurisdiction.
There is a major difference between offering access to financing and providing the financing yourself.
Suppose you sell a $100,000 machine.
If you deliver the machine today and allow the customer to repay your company over five years, your company is carrying the receivable and taking the credit risk.
If you instead connect the customer with a third-party equipment finance company, the customer enters into a separate financing agreement with that provider. Once the transaction funds, you are paid according to the approved vendor process.
That second model is what most independent equipment sellers mean when they say they want to offer customer financing without becoming the lender.
Canadian sellers can see the basic structure in Mehmi's guide to offering financing to equipment customers and its more direct Offer Financing Without Being a Bank guide.
The important point is not the branding.
It is who actually extends the credit, sets the approved terms, carries the receivable and handles repayment.
The simplest approach is a referral.
Your salesperson asks whether the customer wants financing and sends interested buyers to the finance provider.
A more developed version is a co-branded or white-label vendor program. Financing appears inside your own sales experience, but the actual financing agreement still sits with the third-party provider.
Canadian vendors considering that model can review Mehmi's Dealer-Branded Equipment Financing guide.
The most integrated model is embedded financing. The financing application can sit inside the website, CRM, dealer portal or quoting workflow.
You do not need to start there.
A clean quote, one application path and a reliable handoff are usually more important than sophisticated technology.
Your salesperson should understand the financing process without pretending to be the underwriter.
A representative can explain that financing is available, show an illustrative payment, help identify the equipment being purchased and direct the customer into the application.
The representative should not promise approval, invent a rate, tell the customer what financial information to report or make an independent credit decision unless the company is actually authorized and structured to perform that role.
This is particularly important in the United States.
The current federal Regulation B definition of “creditor” includes, for certain anti-discrimination and discouragement provisions, businesses that regularly refer prospective applicants to creditors or select creditors for applicants. The official interpretation specifically gives dealers and similar businesses as examples.
That does not mean every vendor referral makes your company the direct lender.
It does mean “we are only referring people” is not a reason to ignore credit-related compliance altogether.
Use one consistent application path and let the finance provider make the actual underwriting decision.
Introduce it early, not after the customer rejects the cash price.
Suppose you are quoting a $175,000 production machine.
A salesperson can simply ask whether the customer intends to pay cash, use its existing bank or review financing.
That frames financing as a normal capital-management choice.
A financially strong business may still finance because it wants to preserve its cash for payroll, inventory, expansion or another investment.
Do not imply that customers who ask for financing are financially weak.
For Canadian sales teams building this process, Mehmi's Vendor Program Setup Checklist provides a useful operational framework for the application, documentation and funding handoff.
Yes, provided the number is clearly an estimate.
Show the cash price first.
Then identify the assumptions used to calculate the payment, including the amount financed, assumed pricing, term and payment frequency.
Do not hide a large down payment, residual or end-of-term buyout simply because it makes the advertised payment look smaller.
For example, assume a U.S. equipment seller is quoting a commercial machine for USD $150,000.
For illustration only, assume the full $150,000 is financed at an 8.50% annual interest rate for 60 months, with monthly payments.
Assume no down payment and exclude sales tax, documentation charges, UCC filing costs, insurance, delivery, installation, warranties and other transaction expenses.
The estimated monthly payment is approximately USD $3,077.48.
Estimated total repayment over 60 months is approximately USD $184,648.78, including approximately USD $34,648.78 of financing cost.
This is a mathematical illustration only. It is not a Mehmi Financial Group offer, approval, customer result or representation of current lender pricing.
The seller could accurately describe that as an illustrative estimated payment subject to credit approval and final financing terms.
It should not tell the customer, “Your payment will be $3,077.”
Canadian sellers wanting a simplified customer-facing menu can review Mehmi's Customer Financing Menu: 2 Options Dealers Need.
A financing program does not eliminate underwriting.
The provider still needs to determine whether the customer can repay and, where equipment secures the transaction, whether the collateral supports the financing.
Cash flow matters because the new payment must fit after payroll, suppliers, rent, taxes and existing debt.
Credit history can affect approval and structure, but there is no responsible universal minimum score that applies to every provider.
Operating history helps show whether current revenue is established.
Existing leverage matters because a high-revenue business can still have limited additional borrowing capacity.
For equipment transactions, the provider may also consider age, condition, purchase price, useful life and resale demand.
The vendor's job is to make the transaction information accurate.
The provider's job is to decide whether the credit works.
Start with a clean quote.
Identify the correct seller and buyer.
For equipment, include the year, manufacturer, model, serial number or VIN where available, condition and purchase price.
Used equipment should include accurate hours or mileage where relevant.
Separate major attachments.
Large soft costs such as freight, installation, engineering, software or training should be itemized rather than buried inside the equipment price.
A financing provider may be willing to include some of those costs, but it should know what it is financing.
Canadian distributors with more complex multi-OEM orders can review Mehmi's Vendor Financing Program for OEMs & Distributors.
The customer's sensitive credit information should generally move through the finance provider's approved process instead of being unnecessarily stored in individual sales inboxes.
The finance provider reviews the customer and transaction.
It may approve the request, request more information, propose a different structure or decline the application.
Approval is not necessarily the same thing as funding.
An approval may still require final documents, insurance, proof of customer contribution, accurate serial numbers, lien clearance, delivery verification or customer acceptance.
The vendor should therefore distinguish between:
Credit approved
and
Cleared for funding or delivery.
That distinction protects the seller from releasing expensive equipment before all closing requirements are complete.
Not automatically.
A third-party model usually prevents the vendor from carrying the customer's entire multi-year receivable, but the vendor agreement still matters.
Some programs can contain recourse provisions, repurchase obligations, representations about equipment, fraud-related responsibilities or other vendor commitments.
Do not assume that “third-party financing” automatically means “zero risk.”
Read the actual agreement.
The vendor should know what happens if the equipment information is inaccurate, the transaction is unwound or the customer later defaults.
Mehmi's Canadian Customer Financing Mistakes to Avoid guide explains why the process after approval is just as important as getting the customer through credit.
Federal law is only part of the picture.
As noted above, Regulation B applies to business credit and can impose certain obligations even on businesses that regularly refer applicants rather than actually funding them.
Secured equipment financing can also involve UCC Article 9. UCC §9-310 states the general rule that a financing statement is required to perfect many security interests, subject to its exceptions.
The finance provider should normally manage its own lien and perfection process.
State rules can add another layer.
California, for example, regulates certain finance lenders and brokers making or brokering commercial loans and separately requires disclosures for covered commercial-financing offers.
That is why a nationwide vendor should not assume that the same legal setup applies in every state.
If your role goes beyond a simple introduction and into brokering, negotiating terms or presenting specific offers, confirm the applicable state requirements before launch.
For a practical U.S. example of keeping the equipment sale separate from the commercial credit transaction, see Mehmi's Palletizer Vendor Financing guide for Atlanta and Sortation System Vendor Financing guide for Duluth.
Canadian vendors need to think about both secured-credit rules and privacy.
Most common-law provinces use provincial personal-property security legislation.
In Ontario, financing statements can classify collateral as equipment, inventory, accounts or other personal property, and the system is used to register secured interests.
Quebec uses the RDPRM, which the provincial government describes as a register showing whether assets such as company property have been given as security or are affected by debt.
The financing source should normally handle its security registration.
The vendor should provide accurate asset information and avoid promising how liens will be structured before the provider completes the documentation.
Privacy is equally important.
Where PIPEDA applies, organizations generally need meaningful consent for collecting, using and disclosing personal information. Alberta, British Columbia and Quebec have substantially similar private-sector privacy laws that may apply instead in certain intraprovincial circumstances.
A practical rule is simple: collect only what your sales team actually needs and route sensitive credit information through the approved finance workflow.
Yes.
A co-branded application, financing page or “payment options available” message can make the process feel integrated into your sales experience.
But the customer should not be misled about who actually provides the financing.
Your marketing can say that financing is available through third-party providers or that your company can help customers arrange financing.
Avoid language implying that your business directly approves or funds loans when that is not true.
The goal is a seamless customer experience without blurring the legal roles.
Only if you deliberately want to carry credit risk.
If you allow a customer to pay your company over several years, your own working capital becomes tied up in that receivable.
You also need a credit policy, collections procedures, loss management and a plan for defaults.
For a company selling a few large pieces of equipment each month, those responsibilities can quickly become significant.
A third-party finance program can provide the payment experience customers want while keeping your own capital available for inventory, payroll and growth.
Large captive finance operations can make sense for major manufacturers.
Most independent vendors do not need to build one to offer useful customer financing.
When the customer cannot reasonably support the purchase.
Financing does not turn poor economics into good economics.
A business with ongoing operating losses may be worse off after adding another fixed payment.
A customer buying equipment it will barely use may be better off renting.
An older asset with limited useful life may not justify a long repayment term simply because the longer term produces a more attractive monthly payment.
Sometimes the right answer is a smaller purchase, more reasonable customer contribution or waiting.
A sustainable vendor program should help qualified customers complete sensible purchases.
It should not try to approve every sale.
No. A third-party vendor program can allow customers to obtain financing from an outside lender or lessor while your company remains the seller.
Yes, but payments should be presented as estimates based on stated assumptions and remain subject to final credit approval and financing terms.
Not if the actual financing is being provided by a third party. Your team can collect transaction information and make referrals, but the lender or lessor should control the underwriting decision.
Potentially. Used equipment generally requires more review around condition, age, ownership, liens and supported market value.
In a typical third-party equipment financing transaction, the vendor is paid after the financing provider's documentation and funding conditions are satisfied. Exact timing depends on the program and transaction.
The customer should receive accurate information about who the creditor or lessor is and what agreement it is signing. Co-branding should not obscure the actual financing relationship.
The answer depends on your activities and jurisdiction. A simple referral can be treated differently from negotiating terms, brokering credit or extending financing yourself. U.S. state rules and Canadian provincial requirements should be reviewed for the actual program.
Mehmi Financial Group operates as a financing brokerage/intermediary rather than a direct lender. Its current Vendor Program is designed to help equipment sellers present financing while third-party finance providers handle the underlying approvals and funding.
If your company sells trucks, trailers, construction equipment, manufacturing machinery, warehouse equipment, agricultural assets or other high-value B2B products, Mehmi Financial Group can discuss how third-party financing could fit into your sales process.
Be prepared to discuss the typical financing amount, whether your customers are in the United States or Canada, the states or provinces you serve, what you sell, how customers use the purchase and your normal transaction timing.
Call Mehmi Financial Group at 833-863-4644 or use the current Mehmi contact page. The contact page confirms the toll-free number.
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