What equipment financing is
Equipment financing — often called machinery financing or machinery finance — lets you acquire machinery, vehicles, or other business assets without paying the full cost up front. The equipment itself typically serves as collateral, which often makes approval more accessible than unsecured borrowing.
Machinery financing
If you’re specifically looking for machinery financing — for production machinery, heavy equipment, or manufacturing lines — this is the same product, framed around the machine you need. The financing is secured by the machinery itself, so the asset does much of the work of qualifying, and the term is matched to its useful life.
How it works
The financing covers the purchase of a specific asset, repaid over a term that usually aligns with the asset’s useful life. Because the loan is secured by the equipment, terms are frequently more favourable than unsecured options.
When it’s a good fit
- You need to acquire or upgrade equipment to grow or stay competitive.
- You’d rather preserve cash than pay the full cost of the asset up front.
- The asset has clear, lasting value.
What equipment financing costs
Because the loan is secured by the asset, rates are typically lower than unsecured options and are quoted as an interest rate over a term matched to the equipment’s useful life (often 2–7 years). Some assets require a down payment, and used or older equipment may carry a higher rate.
Lease vs finance
You can often finance the equipment (you own it, and it serves as collateral) or lease it (you use it, with an option to buy). Financing builds ownership and equity; leasing can lower the upfront cost and make upgrades simpler. The right choice depends on your cash flow and how long you’ll keep the asset.
Pros and cons
- Pros: preserves working capital; the asset acts as collateral, so approval is often more accessible; terms matched to the equipment’s useful life.
- Cons: the asset secures the loan; used or specialized equipment can be harder to finance.
How to apply — what you’ll need
A quote or invoice for the equipment, business financials or bank statements, and details of the asset. Clear, valuable equipment speeds approval.
The criteria above are general education, not an eligibility decision. The lender you’re introduced to makes all funding and qualification decisions.
Common questions
What is machinery financing?
Machinery financing is simply equipment financing applied to machinery — asset-backed funding to buy production machinery, heavy equipment, or vehicles, with the machine itself serving as collateral. It's a common way for manufacturers and trades to acquire capital equipment without paying the full cost up front.
Can I get machinery financing in Canada?
Yes. Machinery and equipment financing is widely available to Canadian businesses. Approval typically weighs the value of the machinery, your business credit history, and a clear quote for the asset — and is decided by the lending partner.
Does it cover used or manufacturing equipment?
Often, yes. Both new and used machinery can qualify, including manufacturing and production equipment, provided the asset has clear, lasting value.