Equipment Loans · Canada
Equipment Loans in Canada
An equipment loan is financing for one specific asset, such as a vehicle, a machine or a tool, with that asset normally used as collateral for the borrowing. Because the lender can recover the equipment, underwriting focuses on its value, condition and useful life alongside your financial picture. Terms and rates vary with the asset, the down payment and the borrower.
- Product family Equipment Loans
- Availability Canada-wide, licence-dependent
- Cost basis Lender-set, within federal limits
- Where it is regulated Federal ceiling + provincial rules
An equipment loan finances one specific asset, such as a truck, a machine or a trailer, and that asset secures the borrowing. The lender registers a security interest in the equipment, so if payments stop, the lender has a legal claim on it.
Why the asset drives the decision
Because the equipment is collateral, the lender's questions are concrete. What is it, what is it worth today, how quickly does it lose value, and how will it earn money? The financing term usually tracks the asset's useful life, so the loan is paid off while the machine still holds value.
- New equipment often supports a longer term than used equipment.
- A larger down payment reduces the amount financed.
- The security registration encumbers the asset.
- Insurance is normally required for the life of the loan.
What shapes your pricing
Cost depends on the asset, the down payment, the term and the borrower's financial picture. Business statements, tax filings and a trading history all help. A sole operator or a young company may find the lender leaning harder on the equipment's resale value and on whether the owner will personally back the debt.
At the end of the term, some contracts finish with ownership clear, while others carry a buyout or an upgrade option. Ask which structure you are signing before you commit. Financing costs also move with broad interest rates, which the Bank of Canada — rates publishes.
Loan, lease or line of credit?
- A loan buys the asset and builds ownership as you pay.
- A lease rents the use of it, which can suit equipment that dates quickly.
- A line of credit suits smaller, repeated purchases.
Match the tool to the asset's working life. Financing a machine over a longer period than it will realistically last is a common and expensive mistake.
LoanGoose matches borrowers with lenders and does not lend, set rates or make credit decisions itself. For a significant commitment, a licensed professional can help you read the terms.
LoanGoose is a loan matching and comparison service, not a lender. The lowest rates are only available to the most qualified applicants.
What it costs
| Rule | Figure | What it means | Publisher |
|---|---|---|---|
| Criminal rate of interest (federal ceiling) | 35% per year | Above this, an agreement is a criminal offence. | Government of Canada (Justice Laws) |
No amount, term or rate is attached to any link on this page. Anything a lender offers you depends on your file and their own criteria.
What you need before you compare
- Your goal in one sentence. The amount, the date you need it, and the date you can repay it.
- Your real monthly surplus. What is genuinely left after every fixed cost — not what you hope is left.
- A current picture of your credit file. You can request a free copy of your report from each national bureau, and correcting an error is free.
- Every existing debt and its rate. Consolidation maths only works when you can see the whole board.
- The total cost of each option. Compare total repayment, not the headline rate.
- A check that the lender is licensed. Federally regulated banks fall under FCAC; provincial regulators license most other lenders.
Rules where you live
| Province or territory | Payday lending status | Local page |
|---|---|---|
| Newfoundland and Labrador | Licensed regime — federal cap applies | Equipment Loans in Newfoundland and Labrador |
| Prince Edward Island | Licensed regime — federal cap applies | Equipment Loans in Prince Edward Island |
| Nova Scotia | Licensed regime — federal cap applies | Equipment Loans in Nova Scotia |
| New Brunswick | Licensed regime — federal cap applies | Equipment Loans in New Brunswick |
| Quebec | Payday lending not licensed | Equipment Loans in Quebec |
| Ontario | Licensed regime — federal cap applies | Equipment Loans in Ontario |
| Manitoba | Licensed regime — federal cap applies | Equipment Loans in Manitoba |
| Saskatchewan | Licensed regime — federal cap applies | Equipment Loans in Saskatchewan |
| Alberta | Licensed regime — federal cap applies | Equipment Loans in Alberta |
| British Columbia | Licensed regime — federal cap applies | Equipment Loans in British Columbia |
| Yukon | Province-dependent | Equipment Loans in Yukon |
| Northwest Territories | Province-dependent | Equipment Loans in Northwest Territories |
| Nunavut | Province-dependent | Equipment Loans in Nunavut |
Provincial rules change. Confirm the current position with the regulator before relying on it — see the sourced rules table.
Compare equipment loans options
This is a matching step, not an application with us — we are not a lender. Checking does not commit you to anything, and no amount, term or rate is promised here.
LoanGoose is a loan matching and comparison service, not a lender. We do not make loans, set rates or make credit decisions. We may earn a commission when you click or apply through our links. The lowest rates are only available to the most qualified applicants.
Questions people actually ask
What is an equipment loan used for?
It finances a specific asset: a vehicle, machinery, tools, trailers or business technology. Because the asset secures the borrowing, the lender can recover it if you stop paying. That can make equipment easier to finance than an unsecured loan for a business with a short history.
Can I get equipment financing with damaged credit?
It is possible, because the equipment itself reduces the lender's risk. Expect a larger down payment, a shorter term or a higher cost, and expect the lender to focus on the asset's resale value. Improving your credit file first usually improves what you are offered.
How long can I finance equipment for?
Terms usually track the asset's useful life rather than a fixed number of years. New equipment generally qualifies for a longer amortization than used equipment. Stretching payments past the point where the asset holds value is a common mistake, because you can end up owing more than the machine is worth.
What happens if I want to pay the loan off early?
Many contracts allow it, but some apply a prepayment charge or an interest adjustment. Ask for the prepayment clause in writing and compare it with the interest you would save. The answer often decides whether early payoff is genuinely worthwhile.
Do I need a down payment?
Often, yes, and a larger down payment lowers the amount financed and can improve your pricing. The amount depends on the asset, its age, your business history and the lender. A lender may also want the equipment insured for the life of the loan.
How do I compare equipment financing offers?
Compare total cost, not the payment alone: the rate, fees, term, buyout and prepayment rules all matter. The <a href="https://www.canada.ca/en/financial-consumer-agency/services/debt.html">FCAC — debt and borrowing</a> material explains the costs that belong in that comparison.
Where to go next
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All loan types · Borrowing by province · Calculators
Sources for this page
Every figure on this page is attributed to the publisher above. Where a value could not be verified against the publisher's own publication, it is left out rather than estimated.