Agriculture Equipment Financing in Canada

The Rising Costs of Modern Farming Equipment

Farming in Canada has entered a new era—one defined by innovation, precision, and the steep cost of keeping up.

Gone are the days when a reliable tractor was your biggest capital investment. Today’s successful Canadian farmers are upgrading to high-tech combines, smart irrigation systems, GPS-enabled seeders, and even autonomous drones. But staying competitive comes at a price. A new combine can easily cost over $500,000, while even mid-range tractors may exceed $150,000.

For many farm owners, paying out of pocket for this kind of equipment isn’t feasible. That’s why agriculture equipment financing has become a critical tool for modern farms—from Prince Edward Island to British Columbia.

If you're a Canadian farmer or agri-business looking to invest in new equipment, this guide will walk you through the types of financing available, how to qualify, and tips to make the process work for your bottom line.

What Is Agriculture Equipment Financing?

Agriculture equipment financing allows you to spread the cost of machinery over time—so you can get what you need today, while keeping your working capital intact.

Instead of paying upfront, you make fixed payments over a term that ranges from 12 to 84 months. In many cases, you’ll have the option to finance both new and used equipment, including purchases from private sellers.

Financing can be structured as a loan (you own the equipment from day one) or a lease (you rent it with the option to buy later). Either way, it enables you to acquire high-value tools without sacrificing your farm’s financial flexibility.

What Types of Farm Equipment Can Be Financed?

Whether you operate a grain, dairy, poultry, or vegetable farm, nearly every piece of equipment used in production, storage, or logistics can be financed. Some of the most common categories include:

Tractors & Field Equipment

• Utility tractors
• 4WD and row crop tractors
• Cultivators, plows, balers, and seed drills

Harvesting Machines

• Combines
• Forage harvesters
• Windrowers and headers

Ag-Tech Systems

• GPS and auto-steer solutions
• Yield monitoring and data sensors
• Soil mapping tools
• Precision planting systems

Storage & Processing Equipment

• Grain dryers
• Refrigerated storage
• Milking parlours
• Feed mixers and conveyors

Irrigation & Utility Equipment

• Pivot and drip irrigation
• Backup generators
• Utility vehicles and farm trailers

Even if you're buying used machinery from a private seller, there are lenders who will work with you. This opens up more sourcing options—and potentially big savings.

Looking to purchase used farm machinery? Learn more about Financing & Leasing options here.

Popular Financing Options for Canadian Farmers

Choosing the right financing model is just as important as choosing the right equipment. Here are the most common loan structures for Canadian agriculture businesses:

1. Equipment Loans

This is the most straightforward option. You borrow a fixed amount to purchase equipment, then repay it over a set term (usually 1 to 7 years). At the end of the term, you fully own the equipment.

• Best for: long-life assets like tractors, combines, or grain storage
• Pros: ownership, predictable payments, possible tax write-offs
• Consider: may require a down payment or collateral

2. Equipment Leasing

With a lease, you rent the equipment and make lower monthly payments than you would with a loan. At lease-end, you can return the asset, upgrade to a newer model, or buy it outright.

• Best for: tech-heavy or depreciating assets
• Pros: lower payments, easier upgrades
• Consider: you don’t build equity unless you purchase it later

3. Sale-Leaseback

Already own equipment? You can sell it to a lender and lease it back—freeing up cash to reinvest in your business without losing access to the asset.

• Best for: farms needing liquidity for repairs, upgrades, or expansion
• Learn more about refinancing & sale-leaseback options

4. Line of Credit or Working Capital Loan

Need flexibility for smaller purchases or repairs? A revolving credit line or working capital loan allows you to tap funds when needed, without locking into a large fixed loan.

• Best for: ongoing maintenance or seasonal upgrades
• Learn more about equipment lines of credit

5. Invoice Factoring (for Ag-Supply Businesses)

If your farm business supplies food processors or grocers and experiences cash flow gaps while waiting on payments, invoice factoring can be a smart option. You get paid faster by turning invoices into immediate cash.

• More details on invoice factoring

How to Qualify for Agriculture Equipment Financing in Canada

Lenders typically evaluate your farm’s financial profile to determine your eligibility. Key factors include:

• Credit score: Most approvals require 650+, but Mehmi works with a range of scores
• Business history: 2+ years in operation is ideal, though startups may qualify with additional documentation
• Equipment type & age: New or gently used machinery under 10 years old is preferred
• Revenue & cash flow: Lenders want to see that your farm can support the loan payments
• Down payment: Some lenders offer 0-down options, but putting 10–20% down can improve terms

Have questions about what documents you’ll need? Feel free to contact one of our credit analysts.

5 Ways to Lower Equipment Financing Costs

Farming is unpredictable, and every dollar counts. Here are five ways to make your financing go further:

1. Buy Used or Off-Lease Equipment

You can often save 30–50% compared to new models. Many lenders will still finance older machines if they’re in good condition.

2. Request Seasonal Payment Schedules

Align payments with your harvest cycle. You can reduce or skip payments in off-seasons and pay more during high-revenue periods.

3. Bundle Tech and Equipment

Financing your smart tech (like GPS, sensors, or mapping tools) along with your machinery can reduce interest costs and streamline approvals.

4. Tap into Equity with Refinance

If you own equipment outright, consider refinancing it to unlock capital. This is a smart move when cash is tight but your equipment still holds value.

5. Use Government Programs When Available

Programs like the Canada Small Business Financing Program (CSBFP) can support farm equipment purchases and reduce your risk exposure.

Need ideas for managing farm cash flow? Read our post on Working Capital Loans for Trucking Businesses in Canada—many of the same principles apply to agriculture.

How Mehmi Financial Group Helps Canadian Farmers Grow

At Mehmi Financial Group, we know that farmers can’t afford to wait weeks for bank approvals. That’s why we specialize in fast, flexible financing for agriculture equipment, with:

• Up to $5M in funding in under 48 hours
• 30+ Canadian lenders competing for your approval
• Lease, loan, and refinance options tailored to your needs
• Minimal paperwork and approvals based on common-sense underwriting

We proudly support agriculture clients from coast to coast—helping farmers upgrade, expand, and modernize without compromising their cash flow.

Speak to a credit analyst today and get personalized recommendations for your equipment purchase. Contact us now

FAQs: Agricultural Equipment Loans in Canada

What credit score do I need to finance farm equipment?

A score of 650+ is ideal, but alternative options may exist for lower scores depending on business strength.

Can I finance used tractors or combines?

Yes, most lenders accept used equipment—especially models under 10 years old and in good condition.

Is seasonal payment available?

Yes, many lenders allow for seasonal or annual payment schedules to match your farm’s cash flow.

How quickly can I get approved?

Mehmi Financial Group can provide approvals in as little as 24–48 hours, even for large equipment purchases.

Do I need a down payment?

Not always. Some deals can be structured with 0 down on approved credit.

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