Equipment Financing for Young Entrepreneurs

Starting a business is exciting—but buying your first piece of equipment can feel overwhelming.

Maybe you’re a 22-year-old launching a landscaping business and need a skid steer.
Maybe you’re a 29-year-old opening a medspa or a ghost kitchen.
Or maybe your online side hustle is finally ready for its first thermal printer or commercial-grade tool.

But then comes the question:
How do I afford this… if I haven’t been in business long or don’t have perfect credit?

Good news—you’re not alone, and you do have options.
This guide is built to help you, the young or first-time business owner, understand how to get your first equipment loan or lease with confidence.

Can You Finance Equipment Without a Long Credit History?

Yes—but you might need to meet lenders halfway.

Many Canadian lenders want to see:

• 6+ months of business revenue, or
• A co-signer with credit, or
• A personal guarantee (PG) from the business owner

If you’re a startup, sole proprietor, or first-time founder, it’s totally normal for lenders to lean on your personal credit or commitment.

But that doesn’t mean you’ll be denied. At Mehmi, we’ve helped hundreds of new business owners get their first financed asset.

What You Can Finance as a Young Entrepreneur

Here are some examples of startup-friendly, financeable equipment types:

Understanding the Basics: How Financing Works

If you’re new to credit or loans, here’s a plain-language breakdown of key terms:

✅ Principal

The amount you borrow to buy the equipment.
Example: $25,000 for a used truck.

✅ Interest

The cost of borrowing. If your interest rate is 12% over 5 years, you’ll pay interest on top of the $25K.

✅ Monthly Payment

The amount you pay each month. This includes both principal and interest.

✅ Term

How long the loan lasts. Typical equipment loans range from 24 to 72 months.

✅ Personal Guarantee (PG)

If your business doesn’t have strong credit yet, the lender may ask you to back the loan. This doesn’t mean they expect you to default—it just means you take responsibility if the business can’t pay.

5 Ways Young Entrepreneurs Can Improve Their Approval Odds

1. Get a Co-Signer (Business Partner, Family Member, Mentor)

A co-signer with stronger credit can unlock lower rates or higher approvals.

✅ Must be willing to sign
✅ Must understand the risk
✅ Still keeps you in charge of the business

2. Offer a Down Payment

Putting 10–20% down shows commitment and lowers risk for the lender.
Bonus: It can also reduce your monthly payment.

3. Show Revenue (Even Small-Scale)

Started selling products online?
Have a few contracts lined up?
Show proof of business income through:

• Bank deposits
• Invoices
• Signed service agreements

Even a few months of real activity helps you look “fundable.”

4. Build Your Business Credit Profile

Register your business name.
Open a separate bank account.
Start tracking cash flow.
Use a simple accounting app.

These small steps show lenders you’re serious—and organized.

5. Use a Specialized Broker (Not Just a Bank)

Big banks often say no to new businesses.
At Mehmi, we work with lenders who specialize in:

✅ New businesses
✅ Lower credit
✅ First-time buyers
✅ Private or used equipment sales

We help structure your deal to highlight your potential—not just your past.

Real Case Study: Startup Financing Success

Business: 26-year-old founder of a new moving company in Calgary
Need: $42,000 for a used cube truck and moving dollies
Challenge: Just incorporated 3 months ago, no credit history
Solution:

• Used co-signer with good credit (uncle)
• Provided business plan and initial contracts
• Financed full package over 48 months, no money down

Outcome:
Secured vehicle, launched operations, and paid off loan early after 34 months.

FAQs: Equipment Financing for First-Time Entrepreneurs

Can I finance without a business credit score?
Yes. Personal credit or co-signers are often used in early stages. You don’t need an established score.

What credit score do I need?
Ideally 600+, but we’ve helped clients below that with revenue or collateral.

Do I need a website or business plan?
It helps—but not required. Vendor quote, bank history, and ID are more important.

Can I finance used or auctioned equipment?
Yes—Mehmi supports both dealer and private sales, even refurbished gear.

Final Word: You Don’t Need to Wait Years to Invest in Equipment

Starting a business is already a leap.
Financing your first piece of equipment doesn’t need to be scary—it just needs the right structure, the right support, and a little bit of planning.

At Mehmi, we help young entrepreneurs get funded by building smart deals around real opportunity—not rigid checkboxes.

Ready to finance your first business asset?
Speak to a credit analyst or use our calculator to map out what your monthly payments might look like.

‍