Replace an essential asset
Compare the new purchase with the repair costs, downtime and remaining useful life of the current equipment.
CANADA & UNITED STATES
Equipment Loans
Purchase equipment with a repayment plan that fits the work it will do.
Apply for financing
How equipment loans work
An equipment loan finances a specified business asset with repayments over an agreed period. The asset commonly secures the borrowing. Start with the full purchase cost, expected useful life and the cash your business needs to keep operating.
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 →Start with what the business needs.
Add operating capacity
Connect the equipment cost and repayment plan to expected work, staffing, delivery and installation.
Buy used equipment
Record age, condition, hours or mileage, maintenance and seller details. Acceptance is assessed for the proposed asset and transaction.
Compare the agreement, not just the payment.
Purchase price and upfront cash
Separate the equipment price from tax, delivery, installation and other costs. Ask which items the financing covers and what you need to contribute.
Payments and total cost
Compare the repayment schedule, interest structure, fees, total payments and any final amount. A lower payment can mean a longer term or a larger final obligation.
Security and repayment conditions
Review the asset security, any guarantees, insurance requirements and early repayment terms before signing.
Plan the purchase, not just the monthly payment
Calculate the complete installed cost
The supplier’s price is the starting point. Delivery, installation, setup, training, attachments and warranty costs can change the amount needed before the asset can work. Separate those items on the quote and ask which may be included in the proposed financing. Keep operating reserves outside the purchase budget so a new machine does not leave the business short of cash for wages, materials or maintenance.
Illustrative purchase budget
A workshop plans a $60,000 machine purchase with $5,000 of delivery and installation. With $15,000 allocated from its own funds, the preliminary gap is $50,000 before taxes, fees or additional reserves. These are invented budgeting figures, not a financing offer. The next question is whether the workshop can support repayments during installation and a slower-than-expected production ramp-up, rather than assuming the machine earns revenue immediately.
Connect the asset to documented work
Describe the jobs the equipment will perform, the capacity it adds and the people needed to operate it. Existing contracts, recurring demand or replacement of an essential asset can provide useful context. Separate confirmed work from projected opportunities. A financing review considers the business and asset together; the machine’s purchase price alone does not establish the amount or payment schedule the business can afford.
Buying new, used or from a private seller
New and used equipment need different checks
For used equipment, record the model year, hours or mileage, service history and current condition. An inspection may identify work that belongs in the budget before the equipment enters service. New equipment also needs a clear specification, delivery commitment and warranty description. Financing does not replace a mechanical or operational assessment, and neither a dealer listing nor a manufacturer name guarantees suitability for the intended job.
Private sales and auctions
A purchase from another business, an individual or an auction may be considered subject to transaction review. Ownership evidence, seller identification, serial numbers and existing liens need attention. If the seller owes money against the asset, settlement arrangements may involve paying the existing secured party and the seller separately. Do not make a non-refundable deposit or unconditional bid on the assumption that financing or a particular payout sequence is guaranteed.
Cross-border purchases
Identify the purchasing entity, equipment location and invoice currency. A USD quote for a Canadian business can involve conversion exposure and additional delivery or import-related costs. Equipment also needs to meet the operational requirements applicable to its intended use. Include these matters in the purchase plan rather than assuming that service in Canada and the USA makes every cross-border transaction straightforward or eligible.
Ownership and repayment questions to settle
Security and guarantees
Ask which assets support the borrowing and whether a personal guarantee is required. A financed asset may be subject to security even when the business owns it. Review restrictions on selling, relocating or refinancing the equipment and clarify insurance responsibilities. These obligations matter throughout the agreement, not only when the purchase is completed. Obtain advice on terms that are unclear before committing business or personal assets.
Match the schedule to useful life
Compare the repayment period with the time the asset is expected to remain productive. A lower payment can reflect a longer term or a balance due at maturity rather than a lower total cost. Include maintenance, insurance and expected downtime in the cash forecast. If the equipment is seasonal, ask about available payment structures without assuming that reduced or skipped payments are offered for every request.
What if you replace the machine early?
Request the settlement calculation and any early-repayment conditions before deciding. If the asset is sold or traded in, security may need to be discharged from the proceeds. Do not assume the accounting balance is the exact payout figure. Planning for this possibility helps compare a purchase loan with a lease, especially when technology, production needs or the business’s replacement cycle may change during the agreement.
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, Rational, Hobart, 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.
Equipment quote
Make, model, year, serial number if available, condition, price and seller contact details.
Business and financial information
Legal entity, ownership, location, operating history, bank statements and financial information requested for review.
Purchase plan
Delivery date, intended use, available contribution and any existing obligations on the asset.
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 I finance equipment from a private seller or auction?
It may be considered, depending on the seller, asset and program. Confirm inspection, ownership, lien checks and payment arrangements before making a non-refundable deposit or bid.
Does a loan include maintenance and repairs?
Not automatically. Check exactly which purchase and installation costs are included. Budget separately for ongoing maintenance, insurance and repairs.
Is an equipment loan the same as a lease?
No. A loan finances a purchase; a lease provides use under a lease agreement. Compare ownership, security, total cost and end-of-term conditions.
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.
Is this available in Canada and the USA?
Mehmi accepts financing enquiries from businesses in Canada and the United States. Include your province or state, business activity and transaction currency. Available structures and requirements vary by location and request.
Financing guides for your next step.
CANADIAN FINANCING GUIDE
Used Equipment Financing Canada Guide
Review asset condition, seller information and the documents needed for a used-equipment request.
Read article →CANADIAN FINANCING GUIDE
$1 Buyout Lease vs FMV Lease Canada
Compare ownership plans, purchase options and end-of-term obligations.
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.
Related resources:Truck Loan Canada.