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Equipment for established work
Compare the lease term with the period you expect to use the asset and the work that will support the payments.
CANADA & UNITED STATES
Equipment Leasing
Use the equipment your business needs with clearly defined payments and end-of-term choices.
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Equipment financing, explained
Watch the overview, then use the details on this page to compare the structure, costs and information needed for your request.
Availability and terms depend on the business, equipment, location and application review.
Watch Video →How equipment leasing works
An equipment lease gives your business the right to use specified equipment under an agreement. The lessor generally owns it during the term. Your maintenance, insurance and purchase or return obligations depend on the contract.
Start with what the business needs.
Changing equipment needs
Check the return, renewal and purchase conditions. A lease does not automatically let you upgrade or replace equipment.
Managing upfront expenditure
Compare the initial cash requirement with a loan and the operating reserves your business needs.
Compare the agreement, not just the payment.
Initial payment and charges
Confirm advance rentals, deposits, documentation fees, delivery, installation and applicable taxes.
The full payment schedule
Review frequency, term, total payments and any variable charges. Ask whether a residual or purchase amount remains.
End-of-term obligations
Check purchase pricing, return condition, notice deadlines and renewal provisions. Ownership does not transfer unless the agreement provides for it.
Changes during the term
Review early termination, relocation, insurance claims and equipment replacement provisions.
Compare lease structures
Capital / finance leases
Often considered when you plan to keep the equipment.
- Review rentals, the purchase option and title-transfer conditions.
- Compare the complete cost of ownership.
- The label alone does not determine tax treatment.
Operating leases / FMV
Consider this structure when you want end-of-term options.
- Confirm purchase, renewal and return options in writing.
- Check market-value pricing, notice deadlines and return costs.
- An operating lease is not automatically off balance sheet.
TRAC leases
Terminal rental adjustment clause: an option for eligible commercial vehicles.
- Often relevant to U.S. truck and trailer transactions.
- The agreed residual and realized value affect the final adjustment.
- You may owe a shortfall; surplus treatment depends on the contract.
- Confirm local availability and tax treatment.
Buyouts & seasonal payments
Match the final payment and payment schedule to your plans.
- Confirm any nominal or fixed buyout and transfer conditions.
- Seasonal payments shift timing; they do not guarantee savings.
- Ask what accrues during a deferral and what becomes due later.
Choose the structure for how you use the asset
Long-life equipment versus frequent upgrades
A machine kept for many years creates a different ownership decision from technology replaced regularly. Explain expected usage, maintenance and the planned replacement date. For frequently upgraded equipment, investigate return and replacement conditions; a lease does not automatically allow a mid-term swap. For a long-life asset, compare the total amount needed to own it rather than assuming every lease ends with ownership.
Seasonal and deferred-start discussions
Some arrangements may offer payment patterns designed around seasonal receipts or a delayed operating start. Ask whether such a structure is available for the specific asset and business. Reduced payments in one period can affect amounts due later or total cost. Include the complete schedule in a forecast and confirm when obligations begin; delivery, installation and revenue generation do not necessarily occur on the same date.
Tax and accounting are separate reviews
Do not select a lease solely because it is described as an operating expense or off-balance-sheet financing. Treatment depends on the agreement, applicable accounting framework and jurisdiction. Ask your accountant to review the actual proposal, including purchase options and guarantees. The commercial decision should still work on cash flow, total cost and equipment suitability without relying on an assumed tax saving or accounting classification.
Before signing and before the lease ends
Upfront cash and soft costs
Confirm advance rentals, deposits, installation, delivery, training and other charges. Ask which costs can be included and which remain payable by the business. A first-and-last-payment arrangement is not the same as a deposit that will be refunded. Read how each amount is treated. A complete opening budget is particularly important when the equipment is only one part of a larger site or business expansion.
Insurance, repairs and changes
Identify who maintains and insures the asset, what happens after damage and whether moving or modifying it requires consent. Leasing generally does not remove the operating costs of ownership from the user. Include routine maintenance and potential downtime in the budget. If the equipment becomes unsuitable, the agreement may still require payments or a settlement amount; commercial plans changing does not automatically create a termination right.
Create an end-of-term calendar
Record the notice deadline, permitted options and information required to exercise them. Ask about automatic renewal, collection arrangements and charges for missing parts or unacceptable condition. If purchase is intended, confirm the price calculation and ownership-transfer steps. Reviewing these points at the start makes later decisions easier and prevents a low regular payment from obscuring a significant final obligation or a return process the business cannot practically meet.
A practical comparison checklist
Review point
Purchase financing
Lease structure
Existing equipment
Ownership
Read purchase and security terms
Check lessor ownership and purchase options
Distinguish refinance from sale-leaseback
Cash at the start
Contribution and eligible project costs
Advance rentals, deposits and charges
Net proceeds after payouts and fees
During the agreement
Payments, maintenance and insurance
Rentals and operating responsibilities
New obligations alongside existing needs
At the end
Any final balance and security release
Buyout, return or renewal conditions
Ownership outcome and remaining payments
Use this checklist to compare actual proposals for the same asset and period of use. It does not establish that a particular structure is available or cheaper. Record the answer to each question, including amounts still payable at the end, so the comparison reflects the complete commitment rather than a selected monthly figure.
Explore equipment examples
Relevant equipment can include Bobcat, Hoshizaki, Rational, Volvo. These links provide equipment context; brands are examples, not partners or endorsements. Eligibility depends on the specific asset, condition, seller and financing review.
For a dealer quote, ask for a clear equipment specification and itemized extras. For an auction or private seller, clarify ownership, inspection and payment conditions before committing. An equipment page or brand listing is not a pre-approval for a particular purchase. Keep the intended location, currency and operating purpose consistent across the quote and application so the review addresses the real transaction.
What to prepare
These details help frame the review. Additional documents may be requested for your business, location or proposed transaction.
Asset and supplier details
Provide a quote, specifications, condition and the intended operating location.
Business information
Include legal entity, ownership, trading history and requested financial information.
Use and end-of-term plan
Explain expected usage, maintenance, insurance and whether you intend to keep or return the equipment.
Build a complete request
Include the equipment quote, business location, intended use and available financial records. For used or privately sold equipment, ask which ownership, inspection and lien documents are needed.
From enquiry to a considered decision.
01 / Share the request
Describe the business, equipment, location and purpose. Include the quote or asset schedule when available.
02 / Complete the review
Respond to requests for documents and clarify the available structure, costs, conditions and any outstanding checks.
03 / Review before committing
Read the written agreement and confirm obligations, conditions and next steps before signing or committing to the purchase.
Canada and United States: confirm the local requirements.
Tell us where your business is registered, where the equipment will operate and the transaction currency. We serve businesses in Canada and the United States; individual products and transaction structures vary by location.
Canada
Include the province or territory, business registration and equipment location. Confirm applicable taxes, documentation and security requirements in the written proposal.
United States
Include the state, business entity and equipment location. Confirm state-specific availability, documentation, taxes and any security requirements before committing.
Explore your industry
Find guidance for your sector and how your business operates.
9 industries · Swipe, scroll or choose a group below.
Transportation & logistics
Explore financing considerations for carriers, logistics businesses and freight operations.
Explore industry →Construction & contractors
Plan around project costs, contract timing and day-to-day business needs.
Explore industry →Manufacturing & wholesale
Explore financing for production, order cycles and wholesale operations.
Explore industry →Farming & agriculture
Consider seasonal cash flow, operating needs and long-term farm investment.
Explore industry →Restaurants & hospitality
Explore financing for food-service businesses, hospitality operations and growth.
Explore industry →Medical, dental & wellness
Plan financing around practice operations, patient services and business expansion.
Explore industry →Technology & business services
Explore financing considerations for project delivery, hiring and growth.
Explore industry →Forestry, mining & energy
Consider contract cycles, operating requirements and investment in resource businesses.
Explore industry →Aviation & marine
Explore financing considerations for commercial aviation and marine operations.
Explore industry →Lease vs. loan vs. cash: compare the full commitment
A lower monthly payment is only one part of the decision. Compare ownership, remaining cash, end-of-term obligations and applicable taxes side by side.
| Decision | Lease | Loan | Cash purchase |
|---|---|---|---|
| Ownership | Use the asset under a lease. Ownership at the end depends on the agreement and purchase option. | Purchase the asset, normally subject to security until obligations are met. | Purchase the asset outright; existing liens and title still need checking. |
| Main advantage | Spread access costs and choose an end-of-term structure that suits the asset’s use. | Spread the purchase cost while planning for long-term ownership. | Avoid financing charges and recurring finance payments. |
| Main trade-off | Total rentals, buyout, return conditions and early termination can make the full cost higher than expected. | Debt service, security and any guarantees reduce financial flexibility. | A large upfront outlay leaves less liquidity for payroll, stock and repairs. |
| Upfront cash | May include deposits, advance rentals, fees and applicable taxes. | May include a down payment, fees and purchase taxes not financed. | Full purchase price, applicable taxes and transaction costs are paid from available funds. |
| Canada: possible income-tax treatment | Eligible business lease costs may be deductible, subject to the actual agreement and applicable limits. | Qualifying ownership costs may be recovered through CCA; eligible interest may be deductible. Principal repayment is not itself an expense deduction. | Qualifying capital equipment is generally considered under CCA rules rather than treating the cash payment as an automatic expense deduction. |
| USA: possible income-tax treatment | A true lease may allow rent deductions. A conditional sale is treated as a purchase, regardless of the lease label. | Eligible owners may claim depreciation and eligible interest deductions, subject to tax rules. | Eligible owners may claim depreciation. Paying cash does not itself determine an immediate write-off. |
| When purchase or rental taxes arise | Canada: GST/HST generally follows taxable lease payments as due or paid; a buyout can be a separate taxable purchase. USA: state rules may tax rentals or the purchase price. | Applicable purchase taxes generally arise on the sale under local rules, even if their cost is financed. Financing changes the cash schedule, not automatically the tax event. | Applicable purchase taxes generally arise on the sale under local rules. Registration, exemptions and asset use can affect the result. |
| Best question to ask | What will I owe if I return, buy, renew or exit early? | Can the business carry repayments through a slower season, and what remains at maturity? | What cash reserve remains after the purchase and tax outlay? |
Tax benefits are potential deductions or credits, not a guarantee that an option costs less. In Canada, eligible GST/HST registrants may recover tax through input tax credits when the requirements are met; provincial sales taxes can work differently. U.S. sales/use tax varies by state and asset, including special vehicle rules. Confirm the invoice, tax due dates and any exemption with your accountant before signing.
Income-tax deductions and sales taxes are separate calculations. Ask for an after-tax comparison using the same equipment price, holding period, residual assumption and business-use percentage. Do not compare a lease payment excluding tax with a cash price including tax.
Tax references: CRA input tax credits; CRA capital cost allowance; IRS lease or conditional sale; California lease-tax example. General education; treatment depends on the transaction.
Frequently asked questions
Can used equipment be leased?
It may be considered based on age, condition, seller and program requirements. Share the equipment details before committing.
Will I own the equipment at the end?
Only if the agreement provides for ownership transfer and you meet its conditions. Confirm any purchase amount and notice deadline.
Are lease payments tax deductible?
Tax and accounting treatment depends on the agreement, business and jurisdiction. Ask your accountant to review the specific proposal.
Can I terminate early?
Check the agreement. Early termination may involve costs or continuing obligations; do not assume it works like loan prepayment.
Can I apply before choosing equipment?
You can discuss a planned purchase before selecting the final asset. A discussion or preliminary review is not an approval. A specific quote, seller and equipment details may be needed to complete the assessment.
How long will the review take?
Timing depends on the application, supporting documents, equipment and transaction checks. Ask what remains outstanding and when to expect the next update; no approval or funding timeframe is guaranteed.
Financing guides for your next step.
CANADIAN FINANCING GUIDE
$1 Buyout Lease vs FMV Lease Canada
Compare ownership plans, purchase options and end-of-term obligations.
Read article →CANADIAN FINANCING GUIDE
Used Equipment Financing Canada Guide
Review asset condition, seller information and the documents needed for a used-equipment request.
Read article →Explore related financing options.
Use estimates as a planning aid. Actual costs and conditions depend on the written proposal.
Equipment financing calculator →Tell us what you are planning.
Start with the business location, equipment or assets, and the purpose of your request.
Apply for financingFinancing is subject to application review and approval. Availability, terms, costs and documentation vary by product, business and location. This page provides general information and is not a financing offer. Tax and accounting treatment should be reviewed with your adviser.