What Is the Minimum Credit Score for Equipment Financing?

When it comes to securing equipment financing in Canada, one of the first questions business owners ask is: “What credit score do I need to qualify?” The answer is not a simple number, because lenders assess far more than just your score. That said, your credit profile plays a major role in determining approval, interest rates, and the amount of financing you can secure. Understanding the minimum credit score requirements for equipment loans and leases can help you prepare in advance, strengthen your application, and position your business for more favourable terms.

Why Credit Scores Matter for Equipment Financing

Your credit score is essentially a snapshot of your past borrowing behaviour, payment history, and overall financial responsibility. For lenders, it’s a quick risk indicator. A higher score suggests lower risk and increases the likelihood of securing competitive interest rates and longer repayment terms.

When financing high-value assets like heavy trucks, excavators, or industrial machinery, lenders want reassurance that payments will be made consistently. This is particularly important for businesses in industries like Transportation & Trucking, Construction & Contractors, and Manufacturing & Wholesale where equipment costs can run into the hundreds of thousands of dollars.

The General Credit Score Thresholds

While every lender has unique underwriting guidelines, here’s a general breakdown of what’s commonly seen in the Canadian equipment financing market:

The “Minimum” Credit Score Answer

For most traditional lenders, a score of 650–680 is considered the comfortable entry point for approval without extra conditions. However:

• Specialized equipment finance companies (like Mehmi Financial Group) can often arrange financing for scores as low as 550 if other factors—like strong revenue, stable contracts, or valuable collateral—are present.
• Asset-based lending can sometimes bypass credit score as the primary approval metric, focusing more on the resale value of the equipment.

You can see how these flexible solutions work by visiting our Asset-Based Lending page.

Other Factors That Can Offset a Lower Score

Credit score is important, but not the only factor. Many lenders will approve lower scores if the rest of the application is strong. Here are ways to improve your odds:

1. Strong Business Revenue – Consistent cash flow reassures lenders you can make payments.
2. Larger Down Payment – Reduces lender risk and may lower your rate.
3. Additional Collateral – Offering other assets can improve approval chances.
4. Co-Signer – A co-signer with stronger credit can open the door to better terms.

Case Study: Low Credit, High Approval

Industry: Transportation & Trucking
Profile: An Ontario-based owner-operator with a credit score of 585 needed a used heavy-duty truck from our Inventory.

Challenge: The client had past late payments due to a slow season but had strong revenue for the past 18 months.

Solution: We structured an Equipment Loan with a 20% down payment and a slightly higher interest rate.

Result: The client was approved, secured the truck, and increased monthly deliveries by 35%, improving cash flow and building credit for future financing.

How to Prepare for an Equipment Financing Application

Even if your credit score isn’t perfect, careful preparation can make a significant difference in approval chances:

• Check your score in advance and resolve any errors.
• Gather recent financials – tax returns, profit/loss statements, and bank statements.
• Decide on the asset type – lenders are more comfortable financing assets they can resell easily, like trucks or construction equipment.
• Use our Calculator to determine an affordable monthly payment before applying.

The Link Between Credit Score and Equipment Type

Some lenders are more flexible depending on the asset:

• Easier approvals: Trucks, trailers, excavators, forklifts, agricultural tractors.
• Stricter requirements: Medical imaging devices, specialized manufacturing equipment, niche tech with low resale market.

Our Eligible Equipment page lists the full range of assets that qualify.

Improving Your Credit Score Before Applying

If you’re not in urgent need of equipment, you can take steps over 3–6 months to boost your score:

• Pay down credit card balances below 30% utilization.
• Set up automatic payments to avoid missed deadlines.
• Avoid opening unnecessary new credit lines before applying.

These small changes can save thousands in interest over the life of your loan.

Final Takeaways

• Minimum credit score for equipment financing in Canada is typically 650–680 for traditional lenders, but approvals are possible as low as 550 with the right structure.
• Lower scores often mean higher interest rates and stricter terms, but they don’t have to block you from securing critical business equipment.
• Working with a specialized broker like Mehmi Financial Group gives you access to multiple lenders, increasing your chances of approval.

If you’re ready to explore your financing options, visit our Equipment Financing page to get started.

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