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Understand Canadian vendor financing costs, including setup, dealer fees, customer interest, taxes and net payout before choosing a program.
The cost of a vendor financing program is not the same as the cost of your customer’s loan.
A Canadian equipment dealer might pay nothing to join a program while its customer pays interest and transaction fees. Another arrangement might require the seller to absorb a financing charge or subsidize a promotional rate.
Before comparing providers, separate three questions: What does your business pay, what does the customer pay, and how much does your business actually receive at funding?
Quick Answer: A vendor financing program in Canada can have no setup or membership fee, as Mehmi’s published program does. That does not make every transaction free. Compare any dealer charges, optional rate subsidies and operating expenses separately from the customer’s interest, lease payments, fees and end-of-term obligations. (Mehmi Group)
A no-setup-fee program removes a particular enrollment expense. It does not establish the price of every service or financing transaction.
Mehmi Financial Group’s published vendor financing program states that participating businesses pay no setup fees or membership costs. That is a specific program statement, not an industry-wide Canadian pricing rule.
During onboarding, confirm what the arrangement includes: application access, branding, document collection, status updates and financing coordination. Ask separately about custom website development, integrations or additional services.
Your business should also budget for its own implementation work. Someone needs to update quotation templates, train salespeople and establish who provides equipment information and closing documents.
Mehmi’s Canadian vendor-program setup checklist can help identify those internal responsibilities.
A program can have CAD $0 in enrollment charges without costing your business zero time to operate.
Request a written fee schedule rather than assuming that “free to join” answers every cost question.
Ask whether the agreement includes onboarding charges, recurring platform subscriptions, minimum commitments, support charges or termination fees.
A simple application link and a custom integration into your sales software are different scopes of work. Have the provider identify what it supplies and what your own team must arrange.
Do not budget from an unsupported “typical Canadian platform price.” Obtain a quote for the implementation you actually need.
Ask whether any amount is deducted from your sale proceeds.
For a percentage-based charge, confirm its calculation base. Does it apply to the equipment price, financed amount or another figure? Are taxes included? Is there a minimum charge?
Also establish when the charge becomes payable and what happens if the customer cancels.
These are questions to investigate, not expenses imposed by every provider. Mehmi’s guide to vendor partner fee structures in Canada explains arrangements that may involve seller charges or referral compensation.
Treat a seller-funded financing promotion as a separate marketing decision.
A rate subsidy means your business contributes toward an agreed customer financing offer. Request the exact contribution, eligible transactions and refund provisions before advertising it.
Compare the subsidy with a cash discount on the same sale. Neither is automatically better. Evaluate how much contribution remains after the promotion and whether it helps customers complete sensible purchases.
Do not assume a standard vendor program requires you to subsidize customer rates.
The customer’s loan or lease establishes its repayment obligations. Those costs should be evaluated separately from your business’s program expenses.
Mehmi’s financing disclaimer states that it does not charge an upfront fee merely to submit an application. It also explains that independent financing providers and third parties may charge documentation, registration, appraisal, legal, administration, inspection or other transaction expenses. Final financing documents determine the applicable costs. (Mehmi Group)
Ask for a complete customer cost summary showing the amount financed, cash required at closing, payment amount and frequency, number of payments, fees and final obligations.
For equipment, compare ownership as well as payments. A loan generally supports an ownership-oriented acquisition; a lease provides equipment-use rights under its agreement. Purchase options, renewal requirements and return conditions can change the total economics. BDC’s buy-or-lease guidance recommends comparing the complete acquisition and operating costs within cash-flow projections. (BDC.ca)
Mehmi’s line-by-line Canadian loan and lease comparison provides a framework for that review.
Keep cash-flow requirements and fees distinct. A down payment reduces the amount financed; it is not automatically a financing fee. Identify whether advance payments count toward the scheduled payment total so they are not counted twice.
Finally, request the early-payoff calculation. Do not assume repaying early eliminates every remaining charge.
This hypothetical example uses CAD throughout. It is not a Mehmi offer, quoted rate, customer result or statement of typical Canadian fees.
Assume a vendor sells equipment for CAD $125,000. The customer contributes CAD $25,000, leaving CAD $100,000 financed.
For the customer’s loan, assume:
The estimated monthly payment is CAD $2,100.19.
Total scheduled principal-and-interest payments are approximately CAD $126,011.17, including CAD $26,011.17 in interest. Adding the documentation fee makes the financing cost approximately CAD $26,511.17.
The customer’s total purchase-and-financing outlay, including the down payment, is approximately CAD $151,511.17. Initial cash required is CAD $25,500, before excluded costs.
The assumed 9.50% is the loan’s note rate, not a fee-inclusive APR.
Now examine the vendor separately.
Assume this hypothetical program has no enrollment charge but imposes a vendor transaction fee of 1.50% of the financed amount. That equals CAD $1,500, deducted from the lender’s payment to the seller. This assumption illustrates a fee-charging arrangement; it is not Mehmi’s stated transaction pricing.
The vendor receives CAD $98,500 from the lender, plus the CAD $25,000 customer contribution, for total receipts of CAD $123,500.
If the vendor’s equipment cost is CAD $95,000, its contribution before overhead falls from CAD $30,000 to CAD $28,500. The financing charge consumes 5% of the original contribution.
Do not add that seller-paid CAD $1,500 to the customer’s costs again. In this example, the seller absorbs it.
All calculations exclude applicable sales taxes, security-registration expenses, appraisal, insurance, delivery, installation, maintenance and late-payment or early-payoff charges. Totals use unrounded payments; the final payment may require a rounding adjustment.
Canadian buyers can model the base loan payments using the Loan option in Mehmi’s equipment financing calculator. Add separately paid fees and seller deductions outside the calculator. Its CAD results are estimates, not financing offers.
For affordability, suppose the buyer has CAD $4,000 available monthly after operating expenses and existing debt. The new payment leaves approximately CAD $1,899.81. A slower month with only CAD $2,000 available creates an approximately CAD $100.19 shortfall.
The financing must work for both sides: the seller’s remaining contribution and the buyer’s realistic repayment capacity.
A program’s enrollment price does not determine every customer’s financing terms.
For example, BDC’s equipment-loan guidance explains that rates depend on the business profile, equipment and financing structure. Contribution requirements and supporting documents are also assessed individually. Those are BDC’s published practices, not universal approval thresholds. (BDC.ca)
Prepare a financing request that clearly explains the business, existing obligations, requested amount and purpose of the purchase. Depending on the provider, the review may require bank statements, financial statements, current interim results, ownership information and an equipment quote.
Accurate asset information matters too. Identify age, condition, hours or mileage, included attachments and serial numbers where available.
The repayment period should make sense for the equipment’s remaining productive life. BDC’s equipment-financing overview links financing structure with collateral and equipment lifespan. (BDC.ca)
Do not stretch the term solely to advertise a smaller payment. Compare monthly or other payment frequencies with the customer’s actual collection cycle, and ask whether an appropriate seasonal structure is available.
A temporary cash gap and continuing operating losses are different problems. Some customers should purchase less, rent or wait rather than add another obligation.
Compare the expected net payout and release conditions, not just the advertised fee.
Request a reconciliation showing the invoice amount, customer deposit, lender-funded balance, agreed deductions and any temporary holdback. A holdback may delay cash without being a permanent fee, so establish when and how it is released.
Mehmi’s guide to how Canadian vendors get paid when customers finance explains why credit approval and seller payout should be treated as separate stages.
Before scheduling delivery, confirm outstanding documents, insurance, equipment identification and acceptance requirements. For custom builds, obtain specific approval for any manufacturing deposits or progress payments.
Budget the administrative time needed to resolve those conditions. Use Mehmi’s dealer finance desk workflow to assign responsibility rather than repeatedly passing the file between sales and accounting.
Review contractual exposure as well. Ask whether customer default, cancellation, non-delivery or inaccurate equipment representations could trigger repayment or repurchase obligations.
For the buyer, identify the assets securing the financing and any owner guarantee separately. A registration fee is a cost; the underlying security and guarantee terms define potentially more significant obligations.
Do not assume every charge connected with financing receives the same tax treatment.
The CRA’s guidance on financial services requires examination of the actual services and agreements. Qualifying financial intermediation can be treated differently from separately supplied administrative, promotional or other services. Bundled services require additional analysis. (Canada)
Accordingly, do not automatically treat software development, marketing or platform support as exempt merely because they support a financing program. Have your accountant review the actual invoices and agreements.
For the customer’s equipment transaction, establish applicable taxes and their payment timing separately. Mehmi’s GST/HST equipment-lease guide identifies questions to resolve before presenting a payment estimate.
Eligible GST/HST registrants may recover qualifying tax through input tax credits, subject to commercial-use, documentation and other conditions. The CRA’s input tax credit guidance explains these requirements. Recovery should not simply be assumed in the closing budget. (Canada)
Ask each provider to work through the same representative transaction.
Use the same equipment price, customer contribution, financing amount, term and ownership objective. Compare customer costs, seller receipts, implementation scope and contractual obligations.
Then evaluate operating costs separately:
Program operating cost per funded sale = Total program operating expenses ÷ Number of funded sales.
Include staff time spent on unsuccessful applications in the expense total. Otherwise, the program can appear cheaper than it is.
Compare that cost with the additional contribution the program reasonably helps generate. Do not assume every financed sale would have disappeared without your financing option.
Provider fit matters. A lower-cost arrangement has limited value when it consistently excludes your equipment or customer profile. Conversely, a complex platform may be unnecessary when a straightforward referral process works.
Mehmi’s single-funder versus broker-backed program comparison can help frame that choice.
Start with the least complicated arrangement that addresses your sales problem. Keep customers free to compare their own bank, manufacturer programs, cash purchases and other suitable alternatives.
Do not assume either a fee or a fee-free transaction. Request a written statement of dealer charges and the expected net payout. Confirm the calculation base, payment timing and treatment of cancellations.
Mehmi does not charge an upfront fee simply to submit an application. Separately commissioned inspections, appraisals or other work may have their own payment and refund terms. Confirm those terms before authorizing an expense. (Mehmi Group)
Only agree to a promotion after the financing provider identifies who funds it. Do not advertise an interest-free period, subsidized rate or deferred-payment offer without approved terms and a clear explanation of the associated costs.
Ask the provider whether the particular cost is eligible. When a fee is financed, it increases the principal and may increase interest paid. Do not silently transfer a seller’s contractual charge to the customer.
Confirm whether compensation is available under your agreement, any applicable requirements, when it is earned and whether it can be reversed. Mehmi’s disclosure that it may receive lender-paid compensation does not establish that every vendor receives a commission. (Mehmi Group)
Not necessarily. First establish whether a straightforward application handoff meets your needs. Obtain a separate scope and quote before assuming custom branding, software integration or ongoing development is included in program enrollment.
Mehmi Financial Group operates as a financing brokerage and intermediary, not a direct lender. Independent financing providers determine approvals and final customer terms.
To discuss your program economics, share the typical financing amount, confirmation that your customers operate in Canada, their province, equipment or other use of funds, and expected purchase or program-launch timing.
Call Mehmi Financial Group at 833-863-4644 or contact the team about a Canadian vendor financing program. Request a clear explanation of program scope, any dealer charges, customer costs and expected payout before committing.
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