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Learn how Canadian B2B sellers can offer customer financing, compare net terms, BNPL and equipment financing, and get paid without becoming the lender.
A customer wants to buy from your business, but paying the entire invoice today would take too much cash out of operations.
You have several ways to solve that problem.
You can extend payment terms yourself. You can offer installments. You can connect the buyer with a third-party financing provider. Or, after extending terms, you can finance your own receivables through factoring or accounts-receivable financing.
Those options are often grouped together as “customer financing,” but financially they work very differently.
For most Canadian B2B sellers of higher-ticket equipment and commercial products, the cleanest model is usually to keep the sale with the vendor while an independent financing provider handles the customer's credit application and repayment obligation.
Quick Answer: Canadian B2B sellers can offer financing without funding customer purchases themselves by using a third-party financing partner. The customer applies for credit, the financing provider handles underwriting and approved terms, and the seller is paid after funding conditions are satisfied. Net terms, BNPL, equipment financing and receivables financing solve different problems and should not be treated as interchangeable.
Offering financing simply means giving the buyer another way to manage the purchase price over time.
That does not necessarily mean your company needs to use its own cash to lend to the customer.
A Canadian vendor can use a third-party financing model in which:
The vendor sells the product.
The customer applies for financing.
An independent financing provider evaluates the application.
Approved financing terms are presented to the customer.
Required documents and funding conditions are completed.
The vendor receives payment according to the funding instructions.
The customer then repays the applicable lender or lessor.
For equipment sellers, this is the structure Mehmi explains in its existing How to Offer Financing to Your Equipment Customers in Canada.
Demand for outside financing is not unusual among Canadian businesses. Statistics Canada's 2023 Survey on Financing and Growth of SMEs found that 49.3% of Canadian SMEs with 1 to 499 employees requested some form of external financing, including debt, leases and trade credit.
The practical opportunity for a seller is to make that financing path part of the sale rather than forcing every buyer to arrange it independently.
There are several models, and choosing the wrong one can move unnecessary credit risk onto your own balance sheet.
This is usually the most direct model for larger B2B purchases.
The buyer finances the equipment or purchase through an independent financing provider.
Your company sells the product and receives payment once the financing transaction funds.
You do not wait several years for monthly customer installments.
This can work particularly well for trucks, trailers, construction machinery, CNC equipment, forklifts, agricultural machinery and other commercial assets.
Canadian OEMs and distributors can see the broader structure in Mehmi's Vendor Financing Program for OEMs and Distributors.
Trade credit is different.
You deliver the goods now and give the customer additional time to pay your invoice.
That can be appropriate for trusted repeat customers and relatively short payment periods.
But your business carries the receivable.
If the buyer pays late, your cash remains tied up.
If the buyer defaults, you bear the loss unless you have insurance, guarantees or another arrangement providing protection.
This makes trade credit a credit-management decision rather than simply a sales feature.
Canadian suppliers deciding between carrying receivables and third-party financing can review Mehmi's Supplier Payment Terms Canada guide.
Mehmi's Net 30 vs. B2B Buy Now, Pay Later guide also provides a useful comparison for larger or newer customer relationships.
B2B BNPL brings the installment-payment concept into commercial purchasing.
An approved buyer receives the goods or services and repays according to the provider's schedule, while the seller may receive payment earlier according to the program terms.
This can be useful for defined B2B purchases where conventional equipment financing is unnecessarily complex.
But do not assume all BNPL programs have identical customer limits, terms, fees, guarantees or credit requirements.
For a Canada-specific overview, see Mehmi's B2B Buy Now, Pay Later Canada guide.
Your company can also choose to finance customers itself.
For example, you could deliver a CAD $60,000 product and collect CAD $5,000 per month for twelve months.
This gives your business full control over approval and customer terms.
It also means you have effectively turned part of your balance sheet into a customer credit portfolio.
Your company now needs to think about underwriting, bad debt, collections, documentation, payment processing and what happens after default.
For many small and mid-sized B2B sellers, that is not where management wants to deploy capital.
No.
This is an important distinction.
Factoring generally occurs after your company has already extended payment terms and created an accounts receivable.
For example:
You sell CAD $50,000 of goods on Net 60 terms.
Your customer now owes your company CAD $50,000.
Instead of waiting 60 days, you sell or finance that receivable through a factoring provider.
The factoring arrangement gives your company earlier liquidity.
It does not itself finance the buyer's original purchase in the same way as point-of-sale customer financing.
Mehmi's Invoice Factoring in Canada guide explains how factors assess the invoice, customer and payment terms.
Similarly, Accounts Receivable Financing in Canada uses eligible receivables to support working capital.
These products can make it easier for a seller to offer Net 30 or Net 60 terms because the seller has another source of liquidity.
But they should not be confused with the customer receiving a loan or lease at the point of sale.
Not when the financing itself is being provided through an appropriate third-party structure.
A vendor can introduce financing, explain that payment options are available and direct an interested business customer to the financing process.
The applicable financing provider then handles the actual credit decision.
That does not mean every legal or regulatory responsibility disappears simply because another company supplies the money.
The precise obligations depend on the role your company performs, the type of transaction and the province.
The safest operating principle is to keep responsibilities clear.
Your salesperson sells the product.
Your financing partner handles detailed credit review.
Your salesperson should not independently promise:
“You are approved.”
“You will get 0% down.”
“You qualify for this rate.”
“Everyone gets 60 months.”
For a deeper discussion of the third-party model, see Mehmi's Offer Financing Without Being a Bank.
A good financing partner should make financing easier for both the seller and customer.
That can include a clear application process, credit review, communication of outstanding documents, financing documentation, coordination with funding providers and vendor payout.
For higher-volume vendors, the program may also include:
A co-branded application.
Sales-representative submission tools.
Deal-status tracking.
Payment-estimate tools.
Used-equipment support.
Different financing options for different credit profiles.
The seller still needs to provide accurate information about what is being purchased.
Your financing partner cannot properly structure a CAD $150,000 transaction if the final invoice contains a different asset, unexplained installation costs or materially different pricing.
Canadian dealers considering a more integrated experience can review Mehmi's Dealer-Branded Equipment Financing guide.
Start with a clean quote.
The financing provider should be able to understand exactly what your customer is buying.
For equipment, that can include:
Custom manufacturers should also identify deposit and progress-payment requirements.
Do not wait until funding to explain that the manufacturer needs 30% upfront before building the machine.
The financing structure needs to account for that at the beginning.
Carefully.
A business financing application can contain personal information about owners and guarantors, including identification and financial information.
Canada's Office of the Privacy Commissioner says organizations subject to PIPEDA generally need meaningful consent to collect, use and disclose personal information. Applicants should understand what information is collected, why it is needed and which parties it will be shared with.
PIPEDA also requires organizations to identify their purposes for collecting information before or at the time of collection.
The practical lesson for sellers is simple.
Do not turn every sales representative's email inbox into a storage location for sensitive credit documents.
Use a controlled financing application or document-upload process.
Your salesperson may need to know that the application is in underwriting.
They do not necessarily need copies of the owner's bank statements.
Introduce it before the customer has already rejected the cash price.
A salesperson can simply ask:
“Are you planning to pay cash, or would you like to compare financing options as well?”
That makes financing a normal purchasing choice rather than a rescue product for a buyer who cannot afford the item.
On a website or quote, you can also use language such as:
Business financing available subject to approval.
Request monthly payment options.
Apply for equipment financing.
Avoid guaranteeing a payment that has not been approved.
Payment examples should be explicitly based on stated assumptions.
Assume a Canadian business wants to finance CAD $100,000 of commercial equipment.
For illustration only:
Amount financed: CAD $100,000
Assumed annual interest rate: 9.50%
Term: 60 months
Payment frequency: Monthly
Financing fees: $0 assumed
Taxes: Excluded
Documentation and registration costs: Excluded
Residual or balloon: None
Using a standard fully amortizing calculation, the estimated monthly payment would be approximately CAD $2,100.19.
Over 60 payments, estimated total repayment would be approximately CAD $126,011.17.
That represents approximately CAD $26,011.17 of financing cost under the stated assumptions.
This is an illustrative example only. It is not a Mehmi Financial Group rate, approval or financing offer.
From the customer's perspective, the question is whether roughly CAD $2,100 per month fits the business's cash flow better than using CAD $100,000 in operating cash today.
From the seller's perspective, the goal is to provide the financing path without carrying that CAD $100,000 receivable for five years.
Canadian sellers can also use Mehmi's Equipment Financing Calculator for CAD planning scenarios. Calculator outputs are estimates, not financing offers.
Usually after the financing transaction satisfies its funding conditions.
Do not confuse customer approval with vendor payout.
Depending on the transaction, the financing provider may still need:
Signed financing documents.
Insurance.
The customer's required contribution.
Final invoice.
Equipment serial number.
Delivery confirmation.
Acceptance documents.
Security registration.
Existing lien releases.
This is why the vendor should have a documented release process.
Do not let CAD $200,000 of equipment leave your facility merely because a salesperson received an email saying the customer was approved.
The appropriate funding conditions should be completed first.
If the financing provider takes security in business equipment or other personal property, it may register that interest through the applicable provincial system.
Ontario, for example, says creditors that secure payment of a debt by taking an interest in personal property should register a financing statement under the Personal Property Security Act through the PPSR system.
Other provinces use their own personal-property security systems, while Quebec uses the RDPRM framework.
The vendor generally does not need its salesperson to perform security-registration work.
The seller needs to provide accurate business and asset information so the financing provider can complete the appropriate process.
No.
Financing is an option, not the default answer.
A customer with plenty of cash may prefer paying the invoice outright and avoiding financing costs.
A company with ongoing operating losses may make its situation worse by adding another fixed payment.
A short-term rental may be more appropriate when the customer only needs equipment for one project.
And if the buyer is purchasing a larger package solely because monthly payments make the price feel smaller, the salesperson should not lose sight of whether the transaction actually makes sense.
The objective is to remove an unnecessary cash obstacle from a legitimate business purchase.
It is not to maximize customer debt.
For many B2B sellers, the simplest setup is a third-party financing partner with a co-branded or hosted application. The seller introduces financing while the partner handles underwriting and financing documentation.
Yes. Net 30 is trade credit, meaning your company delivers first and waits for payment. It can work well for trusted repeat customers, but your business carries the receivable and default risk.
No. Both spread payments, but program size, underwriting, ownership structure, repayment terms and eligible purchases can differ. Larger productive equipment is often better suited to equipment-specific loans or leases.
Potentially. With an appropriate third-party financing arrangement, the financing provider funds the approved transaction and the vendor receives payment according to the funding conditions instead of collecting installments for years.
Not directly. Factoring finances the seller's existing accounts receivable after the seller has extended payment terms. It is primarily a working-capital tool for the vendor.
Yes. Canadian vendors can use a financing page, co-branded application or deeper embedded-financing integration depending on sales volume and technical requirements.
No. Approval depends on the customer's financial profile, the transaction, equipment and applicable financing-provider requirements.
Mehmi Financial Group operates as a financing brokerage and intermediary rather than the direct lender. Mehmi can help package and place financing transactions, while final approval, pricing, terms and funding remain subject to the applicable funding provider.
If your customers regularly ask for monthly payments, Net 30 or more time to pay, start by identifying the problem you actually need to solve.
For a trusted customer needing a short extension, trade credit may be sufficient.
For slow receivables, factoring or receivables financing may help your own cash flow.
For a larger commercial purchase, third-party customer financing can let the buyer spread the cost while your company receives payment after the transaction funds.
Mehmi Financial Group works with Canadian dealers, manufacturers, distributors and other B2B sellers through its Vendor Financing Program.
To discuss a program, be prepared to share your typical financing amount, Canada as the customer market, provinces served, use of funds or products being financed, and desired implementation timing.
Call 833-863-4644 or use the Mehmi Financial Group contact page. The current contact page verifies the toll-free number.
All financing is subject to credit approval, documentation, funding-provider requirements and product availability.
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