Financing Equipment in High-Risk Industries

If you’ve ever been turned down by a bank because of “industry risk,” you know the frustration.

Maybe you're opening a new trucking company.
Maybe you’re expanding your restaurant after COVID.
Or maybe you're launching a legal cannabis grow facility and need cultivation gear.

Whatever the case, your business is real—but traditional lenders see only risk models.

At Mehmi, we’ve helped thousands of entrepreneurs in so-called “high-risk” industries get funded when others said no. This post explains why certain sectors are harder to finance—and how to succeed anyway.

What Makes an Industry “High Risk” in the Eyes of Lenders?

Lenders assess industry risk based on:

• Default rates (how often similar businesses fail)
• Asset resale value (can the lender recover losses?)
• Cash flow stability
• Regulatory volatility

If your sector has high failure rates, fluctuating margins, or limited resale on equipment, it may fall into the “higher risk” category—even if you’re personally reliable.

Common “High-Risk” Industries for Equipment Financing

Here are sectors where traditional banks often hesitate—but where Mehmi continues to fund deals:

How to Get Approved in a High-Risk Industry

✅ 1. Choose the Right Lender (Or Broker Who Knows Them)

Banks often use rigid criteria.
Specialized lenders and private financiers—like Mehmi’s network—look beyond surface risk.

We work with over 30 lenders, many of whom finance:

• First-time owner-operators
• Cannabis cultivation gear
• Foodservice appliances
• Used trailers or specialty equipment

✅ 2. Provide a Clear Business Case

Even in risky industries, strong documentation wins trust:

• Vendor quote or invoice
• Business plan (especially for startups)
• Existing contracts or pipeline work
• Proof of licensing (e.g., cannabis, food safety, municipal permits)

✅ 3. Consider Mitigation Strategies

If you’re borderline on credit or industry risk, here’s how to tip the scales:

• Down payment of 10–20%
• Personal guarantee or co-signer
• Additional collateral (vehicle, machinery, real estate)
• Start with a smaller asset, then scale
• Choose equipment with strong resale value

✅ 4. Use Government-Backed Guarantees Where Applicable

While Mehmi does not offer grants, some industries benefit from loan guarantees or tax-based support. For example:

• Restaurants or manufacturers may access regional small business supports
• Trucking fleets may benefit from fuel-efficiency assessments
• Licensed cannabis operators may qualify for certain BDC-backed loans if incorporated

Ask your credit analyst how to pair private financing with regional support where possible.

Real Case Study: Startup Cannabis Processor Finances Extraction Equipment

Business: Ontario-based licensed cannabis startup
Need: $85,000 for closed-loop extraction system
Challenge: Bank refused due to “internal policy”
Solution:

• Financed through private lender familiar with cannabis risk
• 60-month lease, $0 down, equipment secured as collateral
• Licensing and security documentation provided upfront

Outcome:
Launched production within 60 days. Re-applied 18 months later to add new HVAC and filtration gear under better terms.

Tips for Challenging Industries

✅ Be transparent about your business model
✅ Document everything (receipts, contracts, permits)
✅ Choose financeable equipment with resale or proven use
✅ Don’t assume a bank “no” is a final answer
✅ Structure payments to fit your real cash flow (seasonal plans, step-ups, etc.)

FAQs: High-Risk Industry Equipment Loans

Can I finance used or auctioned equipment in these sectors?
Yes. In fact, many operators in these industries prefer used equipment. We’ll help with inspection and proper documentation.

Will I need to sign personally?
Often, yes—especially for startups or sectors with no business credit. But we can structure deals to reduce risk over time.

Do I need to be incorporated?
Not always. Sole proprietors and partnerships are eligible, especially in foodservice, trades, and trucking.

Can I get multiple assets in one loan?
Yes. For example, a food truck package might include the vehicle, grill, hood system, and generator—all in one lease.

Final Word: Risk Is Relative—Resilience Is Real

Banks may label your industry “high risk”—but that doesn’t mean your business is a bad bet.

At Mehmi, we work with Canadian business owners in every sector—from trucking to cannabis to mobile wellness—who need capital, not judgment.

Our role is to connect you with lenders who see opportunity, not just red flags.

Need help financing equipment in a challenging industry?
Talk to a credit analyst or use our calculator to explore options tailored to your business—even if others have said no.

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