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Offer customer financing in Canada without funding the loan yourself. Learn how payouts, fees, approvals and vendor responsibilities work.
A customer wants your equipment but would rather pay over time. Your business wants the sale without waiting years to collect the purchase price.
You do not necessarily need to choose between losing the customer and financing the purchase yourself.
A third-party financing arrangement can separate those responsibilities. The important distinction is that not funding your customer’s loan does not mean the sale requires no working capital, no administration or no contractual risk.
Quick Answer: Canadian businesses can offer customer financing through a third-party lender, lessor or financing brokerage instead of funding instalments themselves. The financing source reviews the buyer and pays according to the agreed closing conditions. Your business still needs to manage delivery, possible upfront costs and its vendor agreement. (BDC.ca)
It means an outside financing source funds the customer’s approved purchase rather than your business carrying the instalment obligation.
BDC’s equipment financing guidance describes equipment sellers partnering with financial institutions to help customers obtain loans or leases when the seller does not have an in-house financing division. (BDC.ca)
Compare that with allowing customers to pay your company over several years. You have delivered the product, but much of the selling price remains uncollected. Meanwhile, your suppliers and employees still expect payment.
Third-party financing can remove that long collection period from the sale. The customer’s scheduled financing payments go to the lender or lessor under a separate agreement, while your business receives the agreed proceeds when the transaction funds. (Mehmi Financial Group)
However, borrowing against your own operating line and then offering customers instalments is different. You have obtained external money, but your business still owes its lender and remains responsible for collecting its customers.
Look at who owes the money, not simply where the money originated.
Match the financing to what the customer buys and how that purchase generates cash.
For durable equipment, compare loans and leases. A loan can suit an ownership objective, while a lease requires careful review of ownership during the term, purchase options, renewal provisions and return requirements.
BDC recommends comparing acquisition costs, cash-flow effects and end-of-lease obligations rather than treating the lowest payment as the deciding factor. Mehmi’s Canadian loan-versus-lease quote comparison provides a practical framework for that review. (BDC.ca)
For recurring inventory purchases, ask whether shorter-term purchase credit or a revolving facility better matches the collection cycle. Do not automatically place a short-lived expense into a multi-year equipment structure.
Also distinguish financing the buyer from financing your receivables. Factoring involves selling eligible invoices; it is not the same transaction as arranging an equipment loan for your customer.
Start partner discussions with your actual transaction mix. Mehmi’s one-funder versus broker-backed vendor program guide compares a single financing relationship with a brokerage-supported approach.
Establish the financing relationship, sales handoff and payout rules before promoting payment options.
Identify the actual lender or lessor, the financing intermediary, the party servicing payments and the person responsible for outstanding conditions.
Ask about supported provinces, equipment categories, typical transaction sizes and customer profiles. Obtain written confirmation of eligibility and operating restrictions rather than relying on a broad Canadian service description.
Review compensation, exclusivity and termination provisions before committing.
Include the correct legal parties, CAD purchase price, equipment description, quantities, condition, deposits and expected delivery date. Add serial numbers or VINs when available.
Separate physical equipment from freight, installation, software, training and other services. Ask which costs the financing provider will consider.
For bundled purchases, Mehmi’s vendor financing guide for Canadian manufacturers and distributors explains the importance of making each part of the transaction identifiable.
Start with an approved application link or branded page. Your salesperson can introduce financing without collecting the entire credit file personally.
Mehmi’s dealer-branded financing guide explains how the application experience can remain connected to your company while financing responsibilities remain separate.
Assign an internal owner to connect each application with the correct quote and follow up on vendor-side requirements.
The financing provider still needs evidence that the customer can repay.
BDC’s business lending assessment guidance emphasizes cash flow, existing debt, credit, financial strength and the proposed investment’s effect on the business. Revenue alone does not establish borrowing capacity. (BDC.ca)
Prepare customers to discuss operating history, current obligations, available cash contribution and why the purchase makes sense now.
Depending on the transaction, the financing source may request financial statements, recent bank statements, ownership information, an existing-debt schedule and the vendor quote. Mehmi’s equipment financing document guide provides additional preparation context.
For equipment, document age, condition, maintenance, useful life and value. A used machine with significant upcoming repairs needs a different acquisition budget from one ready for service.
Resolve inconsistent names, unexplained deposits and missing ownership records before submission. Disclose existing financing rather than allowing it to emerge late in the review.
There is no single credit score, revenue figure or contribution percentage that guarantees approval across every provider.
When the agreed funding conditions are completed, not simply when the customer receives an approval.
Mehmi’s published disclosures distinguish preliminary or conditional approval from final funding. Documents, verification and other requirements may remain outstanding. (Mehmi Financial Group)
Ask the financing source to identify the payout trigger in writing. It could depend on delivery, installation, customer acceptance or an approved progress-payment milestone.
Mehmi’s guide to how Canadian vendors get paid explains why the seller’s payout schedule must be considered separately from the customer’s repayment schedule.
Before releasing equipment, confirm the final invoice, customer contribution, insurance, equipment identifiers and written release instructions.
Material changes need another review. Do not assume an approval for one machine automatically covers a different machine, higher price or revised purchaser.
Never ask the customer to certify delivery or acceptance before it has actually occurred.
Yes. Customer financing and your own production funding solve different problems.
Your business may need to purchase inventory, pay technicians, prepare equipment or cover freight before the financing source pays you.
Map the transaction against three dates: when your supplier must be paid, when you must deliver, and when the financing source can release proceeds.
Where those dates do not align, discuss customer deposits, supplier terms, staged delivery or specifically approved pre-delivery financing. Do not assume a standard approval supports manufacturing deposits.
A useful planning calculation is:
Costs payable before funding − deposits you are permitted to use − confirmed pre-funding = the remaining cash requirement.
Do not treat a refundable or restricted customer deposit as unrestricted working capital.
The goal is to avoid carrying the customer’s long-term debt. It is not to ignore the cash required to complete your side of the sale.
Illustrative example: a CAD $150,000 equipment sale
Assume a Canadian vendor sells equipment for CAD $150,000. The buyer contributes CAD $15,000, and a third-party lender finances CAD $135,000.
For this example, assume:
The estimated monthly payment is CAD $2,868.35.
Total scheduled loan repayment is approximately CAD $172,101.06, including CAD $37,101.06 in interest. Adding the documentation fee produces a financing cost of approximately CAD $37,851.06.
Including the initial contribution, the buyer’s total cash outlay is approximately CAD $187,851.06.
These calculations exclude GST/HST, applicable provincial sales taxes, registration, delivery, installation, insurance and maintenance. Totals use the unrounded payment; the final payment may require a small adjustment.
This is not a Mehmi offer, approval, customer result or current rate quote. The assumed 10% interest rate is not an all-in APR incorporating the separate fee.
Assume the transaction funds fully, the customer contribution is paid to the vendor, and no vendor fees, holdbacks or existing-lender payoffs apply.
The vendor receives CAD $15,000 from the customer plus CAD $135,000 from the lender, satisfying the CAD $150,000 equipment price before excluded taxes and costs.
The lender’s future interest is not additional equipment-sale revenue for the vendor.
The vendor does not wait five years to collect the financed portion. The buyer retains more cash at purchase but takes on approximately CAD $2,868 of monthly debt service.
If the equipment creates CAD $4,500 of additional monthly cash contribution after added operating costs, approximately CAD $1,631.65 remains after the new payment. Existing debt, overhead and slower months still need consideration.
Use the Loan tab of Mehmi’s CAD equipment financing calculator to test different amounts and terms. Add separately paid fees yourself; calculator results are estimates, not financing offers. (Mehmi Financial Group)
No. Funding responsibility and contractual liability must be reviewed separately.
Ask whether your business guarantees customer payments, agrees to repurchase defaulted transactions or contributes to a reserve covering credit losses.
Also examine obligations involving fraud, inaccurate invoices, undisclosed liens, non-delivery, returns and product disputes. Require the partner to distinguish ordinary customer default from a problem involving your company’s performance.
Mehmi’s explanation of zero-recourse dealer payouts discusses that distinction, but the actual agreement controls your transaction.
Have a Canadian lawyer review the vendor contract and any separate guarantees. Ask:
“Assuming we fulfil every vendor obligation, can we be required to return proceeds solely because the customer cannot repay?”
Then review the exceptions, notice requirements and any limits on liability.
Separate vendor program costs from customer borrowing costs.
Request written details of setup, subscriptions, transaction charges, financing subsidies, integration work and termination expenses.
For the customer, compare payments, documentation charges, security-registration costs, personal guarantees, early-payout provisions and end-of-term obligations. Mehmi’s Canadian equipment financing fee guide provides questions for reviewing offers.
Mehmi’s published vendor program states that it has no setup fees or membership costs. Confirm the scope in the applicable agreement; that does not mean customer financing or every custom implementation is free. (Mehmi Financial Group)
Evaluate the sale using net proceeds and gross profit after program costs. Referral compensation, where available and agreed, should not be the reason to recommend an unsuitable financing arrangement.
Keep taxation, security and personal information in the operating plan.
The CRA’s GST/HST registrant guide explains that tax charged on an invoice can need to be reported before it is collected. Do not assume a delayed financing payout automatically delays your tax obligation. (Canada)
Have your accountant confirm the invoiced purchaser, applicable taxes and reporting treatment for the actual loan or lease transaction.
Canada uses provincial personal-property security frameworks. British Columbia’s PPSA provides for financing-statement registrations and searches. Quebec uses its separate RDPRM framework for rights affecting movable property, including company assets. (BCLaws)
Confirm who handles searches, existing-creditor releases and registrations. Ask the financing provider to explain the proposed collateral and any buyer guarantee.
Where applicable privacy law requires consent, applicants need to understand what personal information is collected, why and which parties receive it. The Office of the Privacy Commissioner’s meaningful-consent guidance also makes clear that consent does not replace safeguards or collection limits. (Office of the Privacy Commissioner)
Route sensitive documents through the approved financing process rather than unrestricted salesperson inboxes.
Offer a choice without making credit promises.
A straightforward introduction is:
“Are you planning to pay cash, use your existing financing source, or compare a third-party financing option for this purchase?”
Show the cash price. Any payment illustration should disclose its amount, contribution, assumed pricing, term, fees and final obligation.
Canada’s Competition Bureau assesses both the wording and the overall impression of advertising. A small disclaimer may not correct a misleading headline. Avoid unsupported promises about approval, rates, speed or risk. (Competition Bureau Canada)
Use Mehmi’s dealer financing FAQ for sales and service teams to prepare staff for the handoff.
Pilot the program with one product category, using the Canadian vendor setup checklist. Measure funded sales, net proceeds and time to payout, not applications alone.
Yes, independent sellers can explore partnerships with lenders, lessors or financing intermediaries. BDC identifies this as an equipment-financing model. Confirm the partner’s vendor requirements and availability for your customers and products. (BDC.ca)
Possibly. The required contribution depends on the financing source, borrower, equipment and structure. Do not present the contribution in an illustrative example as a standard approval requirement. (BDC.ca)
Request a review of the itemized purchase. Installation, subscriptions, consulting and physical equipment may need different treatment. Have the financing source identify eligible costs before showing a payment on the entire proposal.
First identify the reason. A provider-policy mismatch differs from an unaffordable repayment obligation. Another review should address the actual issue through supporting evidence or an appropriate structure, not simply repeat the application.
Not necessarily. Mehmi’s published program describes dedicated application links or forms after vendor onboarding. Start with a manageable handoff and consider deeper integration only when transaction volume justifies it. (Mehmi Financial Group)
Pause when the customer cannot support the payment, the purchase depends entirely on speculative demand or new borrowing would finance continuing operating losses. A smaller purchase, rental, delayed acquisition or existing banking relationship may be more suitable.
Mehmi Financial Group is a financing brokerage and intermediary, not a direct lender. Its role is to help coordinate potential financing through independent providers, which determine final approvals, pricing and funding conditions. (Mehmi Financial Group)
The Mehmi vendor financing program describes branded applications, financing-source matching, document uploads and deal tracking. Confirm the proposed arrangement against your actual inventory, customers and payout needs.
To discuss a Canadian program, share your typical financing amount, Canadian customer locations and provinces, equipment or services sold, use of funds and required purchase or launch timing. Identify any U.S. customers separately.
Call Mehmi Financial Group at 833-863-4644 or contact the team about offering customer financing. (Mehmi Financial Group)
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