Equipment Financing for Canadian Businesses (2026)

Buying equipment outright can swallow the cash a growing business needs for everything else. Equipment financing lets you acquire machinery, vehicles, or technology now and pay over time — with the equipment itself usually serving as the security. Here's how it works in Canada and when to finance versus lease.

The short answer

Equipment financing is a loan or lease used to acquire business equipment, where the equipment itself typically secures the deal — so approval leans on the asset and your business's cash flow rather than real estate. It preserves working capital, can offer tax advantages, and is faster and more flexible than tying equipment purchases to a property mortgage. See equipment financing options.

Finance vs. lease

Equipment loan (financing)

You borrow to buy the equipment and own it outright once repaid. Best when you'll use the equipment for its full life and want to build an asset. Payments build equity in the equipment.

Equipment lease

You pay to use the equipment over a term, with options to buy, return, or upgrade at the end. Best for fast-depreciating or quickly-outdated equipment (like technology), or when you want lower payments and flexibility to refresh.

Why businesses use it

• Preserve cash flow — keep capital for payroll, inventory, and growth instead of sinking it into one purchase.
• Faster, asset-based approval — the equipment secures the deal, so it's often quicker than other commercial lending.
• Tax treatment — interest and (for leases) payments may be deductible, and owned equipment may qualify for capital cost allowance. Confirm specifics with your accountant.
• Stay current — leasing makes it easy to upgrade as technology changes.

What lenders look at

Because the equipment is the security, lenders weigh the type and resale value of the asset, your business's cash flow and time in operation, and your credit. Newer, widely-used equipment with strong resale value is easiest to finance; highly specialized gear may need more down or a stronger overall file.

How it fits with property financing

Equipment financing pairs naturally with a commercial property purchase: use a commercial mortgage for the building and equipment financing for the machinery inside it — whether that's pumps at a gas station, kitchen and laundry at a hotel, or racking and machinery in an industrial building. Keeping them separate preserves your real-estate borrowing capacity.

Frequently asked questions

What is equipment financing?

A loan or lease to acquire business equipment, where the equipment itself typically serves as security — so approval is based on the asset and your cash flow rather than real estate.

Should I lease or finance equipment?

Finance (and own) equipment you'll use for its full life; lease fast-depreciating or quickly-outdated equipment, or when you want lower payments and the flexibility to upgrade.

Is equipment financing tax-deductible?

Interest and, for leases, payments may be deductible, and owned equipment may qualify for capital cost allowance. Confirm the specifics with your accountant.

How fast is equipment financing approval?

Often faster than other commercial lending, because the equipment secures the deal — though timing depends on the asset and your business's financials.

Need equipment without draining cash? Talk to us — we'll structure financing or a lease that preserves your working capital and borrowing capacity. See equipment financing.