Equipment Financing FAQs for Canadian Businesses

If you're a Canadian business owner or operator exploring equipment financing, you probably have a few questions—and you're not alone.

At Mehmi, we speak to hundreds of business owners each month. Whether you're buying your first excavator, leasing medspa lasers, or upgrading your fleet, certain questions come up again and again.

This post compiles our most frequently asked questions into one bookmark-worthy resource—giving you clarity, confidence, and a real-world understanding of how equipment financing works in Canada.

General Questions

What is equipment financing, exactly?

Equipment financing allows you to purchase or lease business-critical equipment and spread the cost over time. You’ll typically make monthly payments (including interest), and depending on the structure, you may own the asset outright at the end.

What types of equipment can I finance?

Nearly anything used in a commercial context:

• Trucks, trailers, and vans
• Construction equipment
• Medical and dental machines
• Commercial kitchen appliances
• Manufacturing machinery
• Office tech (computers, copiers, servers)
• Retail displays and refrigeration
• Even mobile business units like food trucks or grooming vans

Explore: What Equipment Can You Finance?

Can I finance used equipment?

Yes. We finance both new and used equipment—including assets from private sellers, auctions, or dealer inventory. The condition, age, and remaining useful life will impact approval.

Can I finance equipment from a private seller?

Absolutely. You’ll just need documentation like a bill of sale, serial number, and sometimes an inspection. Mehmi can guide you through this.

Qualification & Credit

What credit score do I need to qualify?

Many lenders look for a 600+ personal credit score or a history of business cash flow. But we also work with clients in the 500s and with newer businesses, depending on deal structure and revenue.

Can I get approved as a startup?

Yes—especially if:

• You have a co-signer or personal guarantee
• You're putting money down
• You show contracts or revenue forecasts
• The equipment has strong resale value

Will applying hurt my credit?

We do soft pulls first to match you with the right lender. Full credit checks only happen when you’re ready to proceed.

Terms, Payments & Ownership

How much can I finance?

Anywhere from $10,000 to $5,000,000, depending on your business profile, asset type, and lender guidelines.

What’s the typical term length?

Loan or lease terms usually range from 24 to 72 months. We help structure the term to match the asset’s lifespan and your cash flow needs.

How much is the down payment?

It depends, but many deals offer:

Do I own the equipment at the end of the lease?

Depends on the lease type:

• Finance Lease: Yes, you typically buy it for $10 or 1% residual
• Operating Lease: You return it or buy it at market value
• Loan: You own it from day one

Can I pay off early?

Yes. Many equipment loans and leases allow early payoff—with or without interest savings, depending on the lender. We’ll always clarify this before you sign.

Explore: When and How to Refinance Your Equipment Loan

What if I want to sell the equipment before the loan is paid off?

You’ll either:

• Pay off the remaining balance at time of sale
• Get permission to transfer the asset (in rare cases)
• Use a sale-leaseback strategy to access capital while continuing to use the asset

Explore: Sale-Leaseback Financing

Tax & Accounting

Can I write off the equipment?

Yes—through Capital Cost Allowance (CCA) for owned assets or deducting lease payments as operating expenses. Interest on loans is also deductible.

Always confirm tax strategies with your accountant.

Explore: Tax Benefits of Equipment Financing

Do I pay HST/GST upfront?

Usually yes, but in many cases, we can finance the tax as part of the total loan amount.

Special Scenarios

Can I finance multiple pieces of equipment at once?

Yes. You can:

• Bundle multiple assets into one loan or lease
• Use a master lease for phased purchases
• Finance items from different vendors

Explore: Fleet Financing 101

Can I refinance an existing loan or lease?

Yes. We can help you:

• Lower your interest rate
• Extend your term
• Refinance to unlock cash

Can I still qualify with bad credit?

Yes—especially with:

• A co-signer or guarantor
• Additional collateral
• Steady revenue or contracts

Explore: Overcoming Bad Credit for Equipment Loans

Can I finance mobile or custom-built equipment?

Yes. Mobile food trucks, trailers, mobile clinics, and pop-up shops can all be financed—including the vehicle and the build-out.

Explore: Mobile Business Ventures

Final Word: Ask Early, Ask Often

Financing doesn’t need to be confusing.
At Mehmi, we believe clear answers build trust—and the best deals come from real conversations.

Whether you’re buying a single trailer or launching a fleet of mobile businesses, we’re here to guide you every step of the way.

Still have questions or want a custom quote?
Speak to a credit analyst or use our calculator to explore your payment options instantly.

‍