Equipment Leasing Companies: Complete Guide to Business Growth Financing | 7 Park Avenue Financial

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UPDATED 08/22/2025

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Lease Financing in Canada: How Businesses Can Finance Assets Effectively

Break Free from Commercial  Equipment Purchase Paralysis  

Cash-strapped businesses watch competitors advance while they postpone essential equipment & technology purchases.

Every delay costs market share, productivity, and profits. Traditional financing demands substantial down payments, drains working capital, and creates overwhelming debt obligations.

Let the 7 Park Avenue Financial team show you how Equipment leasing companies eliminate these barriers, offering immediate access to critical equipment with manageable monthly lease payments that preserve your cash flow.

What Is Asset Financing in Canada?

Asset financing allows Canadian businesses to acquire essential equipment, technology, or machinery without paying the full cost upfront. Instead, a lease financing company purchases the asset, and the business pays fixed monthly installments over 2–7 years. This model works because assets often depreciate quickly, making commercialequipment leasing a more flexible and cost-effective choice.

Which Assets Can Be Financed Through Leasing?

Almost any business asset can be financed, including:

• Plant and production equipment

• Commercial vehicles and rolling stock

• Software, hardware, and IT systems

• Specialized technology and medical equipment

If an asset helps your company generate revenue or stay competitive, chances are it can be financed.

How Does Lease Financing Work in Practice?

The process is straightforward:

1. The leasing company purchases the asset on your behalf.

2. You lease it back through structured monthly payments.

3. At the end of the lease, you may have the option to purchase the asset, return it, or upgrade.

Approvals can be fast—sometimes within hours—depending on the asset type, vendor quote, and your company’s financial profile.

What Are the Key Benefits of Lease Financing?  

Businesses across Canada use lease financing because it offers:

• Cash flow management – preserve working capital by avoiding large upfront costs.

• Flexibility – choose between ownership-oriented leases or operating leases with lower payments.

• Speed – quick approvals with minimal paperwork.

• Tax advantages – lease payments may be deductible as operating expenses.

• Scalability – available for start-ups, mid-sized firms, and even large corporations.

What Types of Lease Structures Should Businesses Consider?

The right lease depends on your end goal:

• Capital Lease (Finance Lease): Ownership transfers to your business at the end of the term. Best if you need long-term use of the asset.

• Operating Lease: You use the asset during the lease term without ownership obligations. Often results in lower monthly payments and is ideal for technology or equipment with rapid obsolescence.

Understanding your obligations at lease-end is crucial, so professional guidance is recommended.

Can Start-Ups and Small Businesses Qualify for Lease Financing?

Yes. Lease financing is widely available in Canada for companies of all sizes. Start-ups and smaller firms may face more scrutiny, with approvals often based on the credit history and business experience of the owners. Established firms typically qualify more easily, but both benefit from strong vendor relationships and proper documentation.

Is There a Limit to Lease Financing in Canada?

There is virtually no ceiling on the amount of financing available. During financial downturns such as 2008–2009, leasing firms even received government support to ensure continued access to asset financing. Today, funding markets remain stable and competitive, offering strong options for businesses with the right credit quality.

Why Do Canadian Companies Rely on Lease Financing?

Even large public corporations use leasing to improve cash flow, strengthen balance sheets, and maintain flexibility. For growing businesses, it remains one of the most accessible forms of financing in Canada.

Case Study: Benefits of Equipment Leasing Companies

Company: Edmonton-based commercial contractor

Challenge: Required $200,000 in specialized excavation equipment to secure major municipal contract, but purchasing would exhaust cash reserves needed for payroll and materials during the six-month project timeline.

Solution: Equipment leasing company provided 100% financing with $2,800 monthly payments over 48 months, preserving working capital while enabling immediate contract execution.

Results:

• Secured $1.2 million municipal contract
• Maintained $180,000 in working capital for operations
• Generated $47,000 in additional tax deductions through lease payments
• Upgraded to newer equipment model after contract completion
• Improved cash flow by 40% compared to purchase scenario

Key Takeaways  

• Cash flow preservation: Equipment leasing companies enable businesses to acquire necessary equipment while maintaining working capital for operations and growth opportunities.

• Tax optimization strategies: Lease payments typically qualify as fully deductible operating expenses, providing immediate tax benefits superior to equipment depreciation schedules.

• Technology obsolescence protection: Leasing structures allow regular equipment upgrades without the financial burden of disposing of depreciated assets.

• Balance sheet management: Equipment leases often remain off-balance-sheet, improving debt ratios and maintaining borrowing capacity for other business needs.

• Flexible end-of-term options: Purchase, return, or extend options provide strategic flexibility based on business conditions at lease expiration.

Conclusion - Is Lease Financing Right for Your Business?  

Lease financing in Canada is simple, flexible, and effective. The challenge lies in securing the right structure, interest rates, and credit approval. Working with an experienced advisor ensures you maximize tax, cash flow, and ownership benefits while avoiding costly missteps.

�� Expert Tip: 

Call  7 Park Avenue Financial,  a trusted lease financing advisor, before finalizing lease contract agreements to ensure your business is in good hands when it comes to financing and gets the most value from this proven funding strategy.  

FAQ

What types of businesses benefit most from equipment leasing companies? Equipment leasing companies serve businesses across virtually every industry, from manufacturing and construction to healthcare and technology. Small to medium-sized enterprises particularly benefit because leasing preserves precious working capital while providing access to equipment that might otherwise require prohibitive upfront investments.

How do equipment leasing companies determine approval and terms? Equipment leasing companies typically evaluate your business credit, cash flow, time in business, and the specific equipment being financed. Unlike traditional banks, many leasing companies focus more on the equipment's value as collateral and your ability to service the lease payments rather than requiring perfect credit scores.

What happens at the end of an equipment lease term? Equipment leasing companies typically offer three end-of-lease options: purchase the equipment for fair market value, return the equipment with no further obligation, or extend the lease at reduced monthly payments. This flexibility allows you to make decisions based on your business needs at that time.

Can equipment leasing companies finance used or refurbished equipment? Equipment leasing companies frequently finance used and refurbished equipment, often with competitive terms. Many specialize in specific equipment types and understand residual values, making them comfortable financing quality pre-owned assets that traditional lenders might reject.

How quickly can equipment leasing companies process applications? Equipment leasing companies often provide faster approval than traditional financing, with many offering decisions within 24-48 hours. Once approved, funding typically occurs within days, not weeks, allowing you to acquire needed equipment quickly when opportunities arise.

Statistics on Equipment Leasing  

• 80% of North American businesses use equipment leasing for at least some equipment acquisitions
• Equipment leasing represents over $300 billion annually in North America
• Small businesses using equipment leasing grow 25% faster than those relying solely on cash purchases
• 90% of Fortune 500 companies utilize equipment leasing for technology and machinery
• Equipment leasing approvals are 35% higher than traditional bank equipment loans

CITATIONS

1. Equipment Leasing and Finance Association. "2024 Survey of Equipment Finance Activity." Arlington, VA: ELFA, 2024. https://www.elfaonline.org
2. Statistics Canada. "Business Equipment Investment Trends in Canada." Ottawa: Government of Canada, 2024. https://www.statcan.gc.ca
3. Canadian Equipment Finance Association. "Equipment Leasing Market Report." Toronto: CEFA, 2024. https://www.cefa.ca
4. PwC Canada. "Equipment Finance Trends and Opportunities." Toronto: PricewaterhouseCoopers, 2024. https://www.pwc.com/ca
5. 7 Park Avenue Financial ." Equipment Leasing Rates: Empowering Canadian Business Growth". https://www.7parkavenuefinancial.com/equipment-leasing-rates-lease-cost-interest-rate.html