Equipment Financing Canada: Rates, Terms, and How It Works in 2026

What Is Equipment Financing?

It's a loan or a lease used to buy a specific piece of business equipment. The key detail is that the equipment itself usually serves as the collateral. If payments stop, the lender can take it back and sell it.

That's exactly why equipment financing in canada tends to be easier to get than unsecured credit of the same size. The lender isn't only betting on you. They're holding something with real resale value. For other types of business borrowing, our Small Business Loan Canada guide covers the full picture. This page stays on equipment.

People sometimes treat equipment financing canada options as a last resort. It's usually the opposite. For a big physical purchase, it's often the most sensible way to pay.

Loan vs. Lease: What's the Difference?

With a loan, your business owns the equipment from day one. Every payment builds equity, and when the loan's done, it's simply yours.

With a lease, the financing company owns the equipment and you pay to use it. At the end, there's often an option to buy it out. Leases can make sense for gear that goes out of date quickly, like tech or some fitness machines.

Taxes work differently too. Lease payments may be deductible as a business expense. Owned equipment follows capital cost allowance (CCA), meaning depreciation rules. Which is better depends on your numbers, so check with an accountant before you pick. Here's the basic comparison for equipment financing in canada:

What Can Equipment Financing Cover?

More than the sticker price, sometimes. The Business Development Bank of Canada (BDC) has said it can finance up to 125% of the upfront cost of equipment. That extra room can cover delivery, installation and operator training in the same loan, so those costs don't come straight out of your cash reserves.

Think of a café owner getting a new espresso line: the machine, the plumber and the barista training can all sit under one piece of restaurant equipment financing canada lenders like BDC might offer.

That 125% figure is BDC's, not a rule every lender follows. Most won't go that high. Confirm the current numbers on BDC's site before you plan around them.

BDC terms commonly run up to 12 years. Some of its loans allow you to postpone principal payments for up to the first two years, which helps while new equipment is still ramping up. Repayment can sometimes be set up seasonally too: smaller payments in slow months, bigger ones when business is busy.

That seasonal setup is a big deal for farms, landscapers and tourism businesses. For anyone looking at farm equipment financing bad credit canada options, a lender who'll shape payments around harvest income can matter more than a slightly lower rate.

Overall, equipment financing canada deals tend to be most flexible when the equipment holds its value well. The better the resale, the more comfortable the lender.

Equipment Financing by Industry

The mechanics barely change from one industry to the next. The equipment is usually the collateral, and used equipment can typically be financed as well as new. What does change is how lenders value the gear. That's where used restaurant equipment financing canada deals differ from, say, logging equipment. Here's how equipment financing in canada looks across five industries.

Can You Get Equipment Financing With Bad Credit?

Often, yes. Because the equipment secures the loan, bad credit equipment financing canada lenders offer is usually more accessible than unsecured credit of the same size. The lender has a fallback. That changes the maths for them.

Credit still matters, though. Nobody legitimate ignores it completely. Lenders usually look at the bigger picture: cash flow, time in business, how the equipment will earn its keep. For business equipment financing bad credit canada applicants, a lower score often means a larger down payment, a higher rate, or both.

So think of equipment financing bad credit canada options as "possible, at a price," not "credit doesn't count." If your score is low, a stronger down payment and a clear cash-flow plan will do more for you than anything else.

Is 'No Credit Check' Equipment Financing Real?

Mostly, no. At least not in the literal sense. Very few legitimate lenders skip credit checks entirely. When you see no credit check equipment financing canada ads, it usually means one of two things: a soft check that won't affect your score, or less weight on personal credit because the equipment is the collateral.

That's not the same as no review at all. A real lender still wants to see something about your business, like bank statements, revenue or time in operation. Even the best no credit check equipment financing canada offers involve some kind of look at your finances.

Here's the red flag. A lender that guarantees approval without reviewing any financial information whatsoever is one to walk away from. Same goes for anyone asking for fees upfront before funding. Real no credit check equipment financing canada marketing describes a lighter process, not a skipped one.

Used and Previously Purchased Equipment

Many lenders will finance used equipment, not only new. That's good news for anyone trying to open a restaurant without spending a fortune, since used restaurant equipment financing canada lenders offer can cut the starting cost a lot. A lightly used walk-in cooler works just as well as a new one.

Some lenders go further and refinance equipment you already bought with cash. That frees up working capital that was locked into the purchase. Say you paid $60,000 cash for kitchen gear last year. Refinancing it could put some of that back in your account. Restaurant equipment financing canada lenders don't all offer this, though.

Availability varies. Some lenders cap the age of used equipment, others want an appraisal first. Ask directly before assuming used restaurant equipment financing canada options will work the same as new.

What Do Lenders Look For?

Beyond the equipment itself, most lenders want to see:

These factors shape the offer as much as your credit score. Stronger financials usually mean better equipment financing rates canada lenders will put on the table. For bad credit equipment financing canada applicants, the fourth point matters most. Show exactly how the new machine pays for itself, and a lender has a reason to look past a weak score.

Types of Equipment Financing

In the Canadian market, you'll mostly run into four structures.

Term loans are the simplest. You borrow, buy the equipment, own it and pay it off over a set term. Leases come in two broad flavours: capital leases, which work much like ownership, and operating leases, which are closer to renting.

Sale-and-leaseback means selling equipment you already own to a lender and leasing it back. It's a way to refinance gear and free up cash. A logging contractor who owns a paid-off skidder, for example, might use this before looking at logging equipment financing for bad credit canada lenders for the next machine.

Equipment-backed lines of credit let you draw funds as you need them for several purchases over time. Handy for businesses that buy equipment regularly. Across all four, equipment financing canada lenders price the deal around the gear's value and your finances.

How to Apply for Equipment Financing

The process is fairly straightforward:

Step 4 is where a lot of applications get stronger or weaker. "We need a new fryer" is weak. "A second fryer lets us handle 40 more lunch orders a day" is a case. That kind of detail helps any restaurant equipment financing canada application, and it matters even more for bad credit equipment financing canada requests, where the lender needs another reason to say yes.

Can a New Business Get Equipment Financing?

Yes, it's possible. It's harder without two years of financial statements, but the equipment itself secures the loan, so newer businesses aren't shut out the way they can be with unsecured credit.

Expect a bigger down payment, though. And come ready with a cash-flow forecast showing exactly how the equipment will pay for itself. For business equipment financing bad credit canada applicants who are also brand new, those two things carry most of the weight.

A new gym is a good example. With no history, fitness equipment financing canada lenders will focus on the down payment, the lease-or-loan choice and how many memberships it takes to cover the payments. If you're new and your credit's thin, equipment financing bad credit canada options still exist. They just ask more of you upfront.