Yes—sometimes. Learn when Canadian lenders waive personal guarantees on equipment financing, what replaces it, and how to qualify.
If you’re asking “Can I get equipment financing without a personal guarantee?” you’re usually trying to protect two things: your personal assets and your personal borrowing capacity (home mortgage, LOCs, future projects). In Canada, the honest answer is:
Yes, it’s possible—but not common for smaller or newer businesses.
Most lenders will still want some form of backstop. If they don’t take a traditional personal guarantee, they’ll usually replace it with stronger collateral controls, bigger equity, tighter documentation, covenants, or a limited guarantee instead of an unlimited one.
This guide walks you through:
Primary keyword: equipment financing without personal guarantee
Close variants: no personal guarantee equipment leasing Canada, corporate-only equipment lease, equipment lease without PG, limited personal guarantee equipment finance, non-recourse equipment financing Canada
Search intent promise: After reading, you’ll know whether “no personal guarantee” is realistic for your business, what you’ll need instead, and how to structure an approval-ready request.
Key point: A personal guarantee (PG) makes you personally responsible if the business doesn’t pay—even if the borrower is a corporation.
BDC states plainly that a personal guarantee is required for most types of loans (with some exceptions in specific cases). (BDC.ca)
Two clarifications business owners often miss:
BDC’s glossary explains that some lenders may require a personal guarantee and may even require it to include specific assets (like a home or investments), treating those assets as collateral tied to the guarantee. (BDC.ca)
In practice, “no PG” usually means one of these:
Key point: Guarantees are a risk tool. Underwriters use them to reduce the chance of loss—and to encourage “skin in the game.”
Think like a credit team for 60 seconds:
A personal guarantee doesn’t change the equipment’s resale value, but it can reduce PD (people fight harder to pay when personal consequences exist) and reduce LGD (another source of recovery).
This fits directly into the 5Cs:
The more “unknown” you are (newer business, thin statements, volatile industry), the more likely the lender will want a PG.
Key point: “No PG” becomes realistic when the lender can clearly recover without you, and when your business is strong enough that default looks unlikely.
Here are the most common “yes, this can happen” scenarios:
If your business has:
…many lenders will consider corporate-only financing, especially on standard, liquid equipment.
Some equipment categories are simply easier to underwrite “no PG” because the lender’s collateral exit is clearer (lower LGD). Examples often include:
No PG requests often succeed when you bring:
Some OEM captive programs can be more flexible on guarantees for stronger borrowers—especially when the OEM is motivated to move units and the asset is new, standardized, and easy to remarket.
(If you’re comparing captive vs independent approvals, see Mehmi’s guide:
Captive financing vs independent lenders: Caterpillar, John Deere, and more)
Under the Canada Small Business Financing Program (CSBFP), program info notes lenders have the option to take an unsecured personal guarantee and must take security on the assets financed for real property and equipment. (ISED Canada)
Separately, CSBFP regulations include rules about how multiple personal guarantees must state aggregate liability limits. (Department of Justice Canada)
Translation: CSBFP can change the risk-sharing dynamics, but it doesn’t automatically mean “no PG.”
Key point: If you’re early-stage or the asset is hard to value, most lenders will want a PG—or something equivalent.
“No PG” is unlikely when:
If this is you, the smarter move is usually not to fight reality—it’s to negotiate the form of recourse:
For used/private purchases where paperwork is the real problem, use:
How to finance used equipment from a private seller in Canada
Key point: In equipment finance, structure is a risk tool. A lender is more likely to waive a PG if the structure reduces PD/LGD.
An FMV (fair market value) lease typically has a residual at the end. That can:
For a clear explanation of FMV vs $1 buyout vs fixed options, see:
Construction equipment leasing Canada: complete guide (2026)
When you structure the deal so the equipment is essentially paid off through payments, lenders may see:
That doesn’t mean it’s wrong—just that it often increases the need for a PG unless your file is very strong.
If you want “no PG,” you’re usually asking the lender to accept less recovery certainty. You often need to “pay” for that through:
If you already own equipment and need liquidity, sale-leaseback can sometimes be structured with corporate-only recourse for strong businesses—because the asset and ownership trail are already known.
Start here:
Sale-leaseback financing in Canada
(And the tax nuance here:
Sale-leaseback tax implications Canada guide)
Key point: You’re not just asking for financing—you’re asking to remove a key risk control. Your package must replace that control.
Use this checklist to package a lender-ready request:
Most equipment financings fund smoothly when:
Mehmi has a practical “vendor financing package” breakdown that mirrors what causes approvals to move fast vs stall:
How to offer financing to your equipment customers in Canada
Key point: Many owners fixate on “no PG” and accidentally choose a worse deal.
Sometimes a capped or limited PG with a better structure is safer than a “no PG” deal that forces:
A smarter goal is often:
If you want to compare true cost across structures (so you don’t overpay to avoid a PG), use:
Equipment financing cost calculator Canada (free) + full guide
Key point: The guarantee is a credit term. Your deductions depend on whether it’s a lease or ownership/CCA setup.
CRA’s leasing costs guidance states you can deduct lease payments incurred in the year for property used in your business. (Canada)
For a leasing vs financing tax comparison built for owners, see:
Canadian tax benefits of leasing vs financing equipment (2026)
(Always confirm your specific treatment with your accountant—especially for vehicles, mixed-use assets, and atypical structures.)
Key point: The win is often a better form of recourse, not “none.”
Business: Ontario-based contractor with 5+ years in operation
Need: $310,000 for two pieces of used equipment (mainstream category, strong resale market)
Owner goal: “No personal guarantee—I don’t want my home in play.”
What underwriters didn’t like at first:
How we structured it (Mehmi approach):
Outcome:
Why it worked (credit translation):
This is the reality: in Canada, “no PG” is sometimes possible—but smart structuring is always possible.
Key point: Treat “no PG” as a negotiation outcome you earn, not a checkbox you demand.
Pick an equipment category with a known resale market and clean documentation trail.
FMV or fixed option structures often help more than $1 buyout when you’re pushing for reduced recourse.
You’re replacing the lender’s comfort that a PG provides. Your package must be “boringly complete.”
Instead of “no PG,” try:
Usually via:
Independent equipment lenders may have more flexibility than traditional banks on structure—but banks can be competitive when your financials are strong.
If you’re shopping lender options, start here:
Top equipment leasing companies in Canada
If you want to reduce or avoid a personal guarantee on your next equipment purchase, Mehmi Financial Group can help you structure the deal (term, residual, fees, documentation) to improve the odds—without accidentally trading the guarantee for worse covenants, higher cost, or fragile payments.
Sometimes—typically when the corporation is established, financially strong, and the equipment is liquid collateral. More often, lenders will offer a capped or limited PG instead of zero.
It can be, because leases are often collateral-forward and easier to control. But the lender still needs recovery certainty—no PG usually requires stronger financials or stronger structure.
Rarely. Startups typically lack the history that replaces a guarantee. The better target is usually a smaller capped guarantee and a structure that keeps payments affordable.
Not automatically. Program guidance notes lenders have the option to take an unsecured personal guarantee, and they must take security on the financed assets for real property and equipment. (ISED Canada)
A guarantee can expose personal assets depending on the terms and enforcement. Some lenders may require the guarantee to include specific assets; others do not. Review terms with legal counsel before signing. (BDC.ca)
Yes—the presence or absence of a PG doesn’t determine deductibility. CRA’s leasing guidance focuses on lease payments incurred in the year for property used in your business. (Canada)
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