When you're looking to grow your business fleet, investing in commercial vehicles like lorries or trucks is often essential—but costly. A lorry loan helps ease the upfront financial burden by spreading payments over time. Whether you're in transportation, construction, logistics, or manufacturing, understanding how lorry financing works in Canada can empower you to make a smart, scalable decision. In this guide, we’ll walk you through the loan types available, application steps, benefits, and what to avoid.
What is a Lorry Loan and Why Does it Matter?
A lorry loan—also called a commercial truck loan—is a specialized form of financing for purchasing medium or heavy-duty vehicles. Instead of draining your working capital, you can acquire the vehicle now and repay over time with structured terms. This is critical for industries where vehicles generate revenue, such as freight, delivery, or equipment transport.
Types of Lorry Loans in Canada
1. Secured Lorry Loans
- Uses the lorry itself as collateral.
- Typically offers lower interest rates.
- Risk: The vehicle can be repossessed if payments are missed.
2. Unsecured Lorry Loans
- No collateral required.
- Higher interest rates due to increased lender risk.
- Ideal for businesses with strong credit profiles.
3. Hire Purchase Agreements
- Pay monthly while using the lorry.
- Gain ownership at the end of the term.
- Good for businesses that want full control and eventual asset ownership.
4. Leasing Options
- Use the vehicle for a fixed term without owning it.
- Upgrade fleets regularly.
- Often includes maintenance and tax advantages.
Related: Financing & Leasing Options
Key Benefits of Lorry Loans
1. Cash Flow Management
- Spread out payments to preserve operating capital.
- Predictable expenses make budgeting easier.
2. Flexible Repayment Terms
- Customizable to your revenue cycle.
- Choose terms between 12 and 72 months.
3. Asset Ownership
- With secured or hire-purchase loans, you build equity.
- Modify or customize trucks as needed.
4. Potential Tax Benefits
- Depreciation and interest costs may be deductible (check with your accountant).
How to Apply for a Lorry Loan in Canada: Step-by-Step
Step 1: Assess Your Financial Situation
- Calculate how much you can afford monthly.
- Review current liabilities and revenue.
- Use a loan calculator to project repayment impact on cash flow.
Try this: Calculate Your Monthly Payment
Step 2: Choose the Right Loan Type
- Determine whether ownership, flexibility, or cost savings is your top priority.
- Decide between leasing, secured loans, or hire purchase based on long-term strategy.
Step 3: Gather Required Documents
Prepare the following:
- Government-issued ID and proof of address
- Business registration or incorporation docs
- Bank statements and/or tax returns
- Financial projections (especially for startups)
- Invoice or quote for the truck
Related: Truck Loan Approval in Ontario: Documents You’ll Need
Step 4: Compare Lenders
- Look beyond interest rates: evaluate term flexibility, penalties, and service reputation.
- Consider alternative lenders like Mehmi Financial Group, which offers:
- Up to $5M in funding in under 48 hours
- 30+ lending partners
- Minimal paperwork & fast approvals
Related: Refinancing & Sales-Leaseback
Step 5: Submit Your Application
- Fill out all forms accurately.
- Attach all supporting documentation.
- Ask about turnaround times and pre-approvals.
Step 6: Review and Accept the Offer
- Scrutinize interest rates, amortization terms, hidden fees, and early repayment clauses.
- Understand collateral requirements and reporting obligations.
Related: Working Capital Loans for Trucking Businesses
Common Mistakes to Avoid
- Overborrowing: Stay within repayment capacity.
- Ignoring Fees: Ask about processing, late, or early payoff charges.
- Skipping the Fine Print: Understand covenants, penalties, and restrictions.
FAQs
Q: Can I get a lorry loan with bad credit in Canada?
Yes. Many lenders, including alternative financiers, consider applications from businesses with poor credit, especially if there is strong cash flow or a co-signer.
Q: What is the typical down payment for a lorry loan?
Usually between 10% and 25%, but options like 0 Down Loans may be available for qualified borrowers.
Q: How long does approval take?
Traditional banks may take weeks, but MehmiGroup offers approvals within 24–48 hours.
Q: Can I lease instead of buying?
Absolutely. Leasing allows more flexibility and lower upfront costs. It's ideal if you upgrade vehicles frequently.
Q: What happens if I default on a lorry loan?
In secured loans, the vehicle may be repossessed. Unsecured loans may affect your credit and lead to legal action.
Industries We Serve
Mehmi Financial Group supports lorry loans across:
- Trucking and Transportation
- Construction and Heavy Equipment
- Food Delivery and Cold Storage
- Waste Management and Sanitation
- Small Business Fleets
Related: Business Loans on Trucks & Trailers
Ready to Apply?
At Mehmi Financial Group, we help Canadian business owners access lorry loans with flexible terms, low documentation, and fast funding. Whether you're buying your first truck or expanding your fleet, our experts are here to guide you every step of the way.
Speak to a Financing Advisor: Contact Us
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