Ontario is Canada’s largest economy—and also its most diverse. Whether you're operating a logistics company in Brampton, a tech-driven farm in London, or a manufacturing plant in Hamilton, one thing is constant: equipment is essential to growth.
But in 2025, interest rates remain elevated, banks have tightened lending criteria, and many business owners are seeking alternatives. This guide walks you through how Ontario-based businesses are financing equipment in 2025—including typical interest rates, types of lenders, and the financing structures that make the most sense today.
Why Ontario Businesses Are Financing More in 2025
With high inflation in recent years and tightening from traditional banks, more business owners are:
- Facing slower approvals or larger down payment requests from major banks
- Seeking fast, flexible options from non-bank lenders
- Upgrading to more efficient or tech-driven equipment
- Spreading costs to preserve cash flow and working capital
Whether you're a tradesperson, fleet operator, or warehouse owner, equipment loans and leases remain the fastest way to access business-critical machinery without straining your cash.
What Types of Equipment Are Being Financed in Ontario?
Ontario’s industrial and service base is incredibly diverse. Here’s what businesses are actively financing:
Common Equipment Categories:
- Transportation: Trucks, trailers, reefer units, GPS/ELD tech
- Construction: Excavators, lifts, jobsite tools, generators
- Manufacturing: CNC machines, press brakes, conveyor systems
- Agriculture: Tractors, grain handling, irrigation systems
- Office & Retail: POS systems, copiers, refrigeration, digital signage
- Medical & Dental: X-ray, sterilization, patient monitoring, lasers
- Warehousing: Racking, forklifts, packaging systems
Equipment Financing Rates in Ontario (2025)
Rates depend on several factors:
- Your business credit and financials
- The type and age of equipment
- Whether it’s new or used
- Your down payment and loan structure
- The lender’s risk appetite
| Loan Type |
Typical 2025 Interest Rate Range |
| Bank Equipment Loan (secured) |
7.5% – 10.5% |
| Alternative Lender Loan |
9.9% – 17.5% |
| Lease-to-Own (new equipment) |
8.5% – 14% |
| Lease-to-Own (used/private sale) |
10% – 18% |
| Operating Lease (short-term) |
Varies – Often flat-rate vs. interest-based |
Note: These are estimates based on market conditions in Q2 2025 and may vary by deal size, lender, and business profile.
Real Case Study: Toronto-Based Food Distributor Modernizes with Equipment Financing
Business Type: Wholesale food distributor with cold storage warehouse
Challenge: Outdated forklifts and aging refrigerated units created downtime and compliance risk
Goal: Upgrade in Q2 2025 before peak season, but didn’t want to draw from credit line
What They Financed:
- 3 electric forklifts
- Walk-in cooler upgrade
- Dock seals and racking modifications
- Refrigerated trailer (used)
Structure:
- $164,000 lease-to-own over 48 months
- 5% down payment
- Equipment sourced from two vendors and one private seller
- First payment deferred for 60 days
Outcome:
The company reduced energy costs by 22%, sped up loading efficiency, and passed a key client’s compliance audit. Their internal ROI review showed the upgrades paid for themselves within 9 months.
Financing Structures That Work for Ontario Operators
Equipment Loan
- Fixed term, fixed payments
- You own the asset
- Best for long-life machinery or trucks with strong resale value
Lease-to-Own
- Lower monthly payments
- Buy the equipment at the end for $1 or fair market value
- Great for evolving tech or mid-size gear
Operating Lease
- Use it, return it
- Best for short contracts or seasonal needs
- Keeps your balance sheet lighter
Private Sale Financing
- Buy from a used dealer, auction, or another business
- Common in trucking, construction, or trades
- Flexible for newer businesses or budget-conscious upgrades
Sale-Leaseback
- Turn owned equipment into capital
- Useful when expanding or managing tax exposure
- You continue using the asset, but now it generates cash flow
What You’ll Need to Qualify
Ontario lenders usually require:
- Business license and photo ID
- Credit score of 650+ (personal or corporate)
- Recent bank statements or income proof
- Quote or invoice for the equipment
- If private sale: bill of sale, serial number, and photos
Turnaround times can be as fast as 24–48 hours if documentation is ready.
5 Tips for Financing Equipment in Ontario
- Shop for rate vs. structure – The lowest interest rate isn’t always the best if it comes with high fees or strict terms.
- Bundle install and accessories – You can finance install, delivery, tech add-ons, and training to avoid surprise costs.
- Plan for upgrade cycles – Leasing works well for gear you’ll need to refresh every 3–5 years.
- Use private-sale financing to stretch budget – Many Ontario SMEs use pre-owned or auction gear to save 30–50%.
- Work with a credit analyst – A good analyst can structure seasonal payments, negotiate better rates, or package complex deals with multiple vendors.
FAQs: Ontario Equipment Financing
Can I finance used or private-sale equipment in Ontario?
Yes. Most alternative lenders allow private sale financing with proper documentation. Used gear must be in working condition with full details.
What’s the average loan term?
3 to 5 years is typical, though some industrial or tech leases are 24 or 60 months depending on asset type.
Do I need to put money down?
Not always. Some lenders offer $0 down based on credit and asset value. 5–10% is more common.
How fast can I get approved?
With all documents ready, funding can be approved in 24–72 hours—faster than traditional bank timelines.
Can I include install, delivery, and accessories?
Absolutely. Most lenders allow bundling to reduce out-of-pocket spend and simplify accounting.
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