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- Understanding Your Equipment Financing Needs
- Understanding the Different Types of Equipment Financing
- Pros & Cons of Financing
- Financing Versus Leasing Equipment
- Pros & Cons of Leasing
- Who Can Get Business Equipment Financed?
- Frequently Asked Questions About Commercial Equipment Financing in Canada
Understanding Your Equipment Financing Needs
- The piece of equipment you need, and whether it needs to be new equipment or can be obtained second-hand (as this will have a significant effect on cost and therefore your borrowing needs)
- The useful life of that equipment (as this will impact what life of loan you are comfortable with)
- Your current balance sheet and how the new equipment will affect it; does the value of the equipment as a company asset change anything?
- How the equipment purchase will affect your operation
- Whether the item can be resold at fair market value at a later date, if business operations change
- If it can be used for other purposes or has limited usage
- Whether its cost can be offset in any way
- Whether you have a down payment for the purchase
All of these elements give you a starting place for comparing the funding options open to your business for its new equipment purchase.
Understanding the Different Types of Equipment Financing
Credit Based Financing
Collateral Based Financing
Cash Flow Based Financing
Pros & Cons of Financing
Pros
- You own the equipment and are not limited in how you can use it
- You can sell it if needed, as with all other business assets
- Tax deductions may be available
- Equipment can be used as collateral
Cons
- Equipment may become outdated before you've finished paying it off
- Can be harder to obtain a loan than a lease if you have bad credit
- Upfront money may be required
- Repair costs are your responsibility
Financing Versus Leasing Equipment
Pros & Cons of Leasing
Pros
- Allows more flexibility
- Lets you upgrade equipment more easily
- No down payments
Cons
- You don't own the equipment and cannot resell
- Less chance of tax breaks
- Have to keep the equipment until the end of the lease
- Possibly negative effect on your balance sheet thanks to lease payments
Who Can Get Business Equipment Financed?
- Hospitality
- Transportation
- Fitness
- Office work
- Agriculture
- Construction
- Landscaping
- Wellness
- Forestry
- Mining
Businesses in these or any other commercial industry can apply for lease financing or traditional financing to give them access to the assets they need to operate successfully.
Frequently Asked Questions About Commercial Equipment Financing in Canada
What's a typical interest rate for commercial equipment loans?
Are loans for business equipment tax deductible?
What's the difference between asset finance and equipment finance?
What credit score is needed for an equipment loan?
Which is better: leases or purchase financing?
What's a sale leaseback?
Can I get purchase financing from my bank?
Expert Review & Editorial Standards
This page was researched, written, and reviewed by financial professionals with expertise in Canadian lending regulations. All information is regularly updated to reflect current rates, terms, and regulatory changes.
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Every page undergoes research, expert writing, fact-checking, and review by our Financial Content Director. We verify all rates, terms, and regulatory information against official sources including FCAC guidelines and provincial lending regulations.
Last Updated: October 12, 2025 | Next Review: Ongoing monitoring
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