Financing assets for any business is a key challenge for owners/managers. How then to fix that problem? The answer may well lie in the solutions provided by the right business equipment finance company. Let's dig in.
The popularity of equipment leasing is evident, if only because it's widely used in almost every country in the world these days. Here it's always about the value of the asset and its ability to generate profits and cash as well as of course, growing sales - whether it's machines, vehicles, or technology. It all makes sense when leasing equipment.
Your Equipment Shouldn't Cost You Your Business
You need equipment now — but purchasing it locks up capital you can't afford to lose.
Every month of delay costs you contracts, capacity, and competitive ground. Meanwhile, your bank's approval process stretches on with no guarantee.
An equipment lease company gives you a direct path: fast approvals, flexible terms, and assets on the floor without the cash drain.
Equipment leasing companies should be the right lease partner and advisor, giving your company the ability to understand how leased assets help your business and industry.
Financing Assets: Let An Equipment Finance Company Get The Job Done
Lease financing is all about ' use ' of the asset, as well as easy acquisition. In many cases, you are able to ensure the asset title and ownership passes fully to you the lessee at the end of the term. Asset ownership does not pass when you choose to enter into an ' operating lease ' or rental.
IMPORTANCE OF MATCHING CASH OUTFLOWS OVER USEFUL LIFE OF ASSETS
The true life of the asset/assets you are financing is an important concept to understand. Your goal, should you choose to accept it? Simply speaking - match the cash outflows of your lease payment to the overall useful life of the asset.
We mentioned rentals/operating leases already - they are used for temporary uses of assets - a good example is computer and software leasing where assets need to be refreshed continually due to technology changes.
Naturally, owners/managers have the option to utilize bank term loans as another way of acquiring assets when it comes to equipment lease finance. The key benefit of leasing is touted as little or no down payment - i.e. 100% financing. We encourage all our clients to use any form of ' lease vs. buy ' analysis to ensure they are entering into the right financial arrangement. Here you are well reminded to ensure you understand the balance sheet and tax implications of buying, owning, and depreciating any asset on your balance sheet.
While in many cases you might pay more for the overall lease transaction ( not always, but sometimes ) don't ignore the ability to have the flexibility to structure cash flows, re-do the lease, or ensure you have some options that might make sense at end of the lease term.
Lease company financing solutions have maximum flexibility if you take the time to learn some of the basic terminology and potential benefits.
So who in fact are the ' key players' in Canadian equipment lease finance? Fortunately, or unfortunately, depending on how you look at it numerous firms offer these solutions. They include some banks, manufacturers themselves (captive finance firms) as well as commercial independent finance companies.
Knowing which leasing company can address your working capital needs as they relate to acquiring fixed assets is key. Not every firm can qualify for all the bank financing they need - so they aren't able to acquire what the pros call ' conventional finance '.
If your firm is considered very ' creditworthy, 'why would you consider a non-bank commercial finance company? The answer? It's a simple and faster method of closing a transaction purchase, while at the same time not restricting other credit line needs your firm might have.
To understand equipment financing and leasing, it’s important to understand what is considered “equipment”. In terms of equipment financing, any tangible asset, other than property or a building, used in the operation of a business may be considered business equipment.
For example, desks for an expanding office, a pizza oven in an Italian restaurant, a dental X-ray machine, as well as a large milling machine or construction implement, may all qualify as business equipment.
Financing assets is all about being able to spread the payments of the lease over the life of the asset you are acquiring - The closer you can match those two, the better! While some companies take a lot of pride in ownership and choose to purchase assets, over 80% of all companies in North America use asset financing as an acquisition strategy for new and used assets. By the way, yes, used assets can be financed as long as they are not ' private sales'.
IMPORTANT THINGS TO KNOW ABOUT THE EQUIPMENT LEASING COMPANY / ASSET FINANCE
In a lease transaction, it is the leasing company that acquires the equipment and pays the supplier/seller. Interest rates are blended into the monthly installment, allowing business owners and financial managers to properly budget cash outflows relative to the acquisitions.
Leases can be negotiated at fixed or variable rates; in the 2026 timeframe rates are at an all-time low and expected to be that way for several years, according to those economists! Your firm's credit profile is key to obtaining a good interest rate and maximum flexibility in structure, term, and payments.
There is no minimum or maximum amount of leasing as far as dollar amounts are concerned - Small ' micro leasing' solutions can be accommodated for a few thousand dollars, while assets in the millions of dollars are also financed regularly, up to and including those corporate aircraft. We wish!
At the end of the term of the lease you can return the asset, keep it, or buy it for the ' bargain purchase chase option' you have negotiated, which is typically 1$.
HOW THE EQUIPMENT LEASE WORKS!
Many vendors have in-house leasing staff or if not, they are associated with a leasing company. It is important to work with a business financing and leasing expert
Lease financing is not like an equipment loan - which typically has longer terms and is often associated with bank-type facilities.
Leases also have numerous tax and accounting benefits and lessees are encouraged to review the ' lease versus buy ' scenario with their accountants or tax advisors if the transaction merits this type of review. Usually, the deal /transaction size will dictate that when commercial equipment is being financed.
Typically, it makes sense for assets that have shorter life spans or require upgrades and replacements - Examples might be technology financing, medical equipment, rolling stock, etc.
BENEFITS AND SOME DISADVANTAGES OF EQUIPMENT FINANCING CANADA - WHY CHOOSE LEASING?
Leases are often easier to obtain than commercial bank financing loans - they have a lot of flexibility around terms, rates, payment choices, etc. Lessors tout 100% financing, which is not always the case, but many times is - even if a small down payment is sometimes required.
As far as any perceived disadvantages, most leases are sometimes more costly than term loans, but not by a lot, and lessees should remember the ' hell or high water ' clause in leasing that mandates that you make all payments, no matter what.
THE BEST SOLUTION FOR BUSINESS EQUIPMENT LEASING? THE EQUIPMENT LEASE COMPANY!!
If you truly want to ' fix ' the problem of putting new assets into your business on a one-time or continuous basis, call 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can make the job of lease financing and ' financing assets' easier.
FAQ/FREQUENTLY ASKED QUESTIONS
What is an equipment lease company and how does it work for Canadian businesses?
An equipment lease company is a financing provider that purchases equipment on behalf of a business and rents it back under a structured agreement, typically ranging from 24 to 84 months.
• The lessee makes fixed monthly payments instead of a lump-sum purchase
• At end of term, options typically include purchase, renewal, or return
• The equipment itself serves as collateral — reducing the need for additional security
• Canadian lessors include both bank-affiliated and independent non-bank providers
Who qualifies for equipment leasing in Canada — do startups get approved?
Equipment leasing qualification is asset-focused, meaning many borrowers who don't qualify for bank loans are approved.
• Established businesses (2+ years): generally straightforward approval
• Startups and early-stage companies: can qualify with a solid business plan, signed contracts, or a personal guarantee
• Businesses with imperfect credit: often approved based on asset quality and cash flow
Qualification criteria vary by lender — 7 Park Avenue Financial matches your profile to the right equipment lease company for your situation.
When does equipment leasing make more financial sense than buying outright?
Equipment leasing typically makes more financial sense when:
• Your cash reserves are needed for operations, payroll, or inventory
• The equipment depreciates quickly or becomes technologically obsolete
• You want to preserve existing credit lines for emergencies or growth
• You need 100% financing without a large down payment
• Your business is in a growth phase where capital efficiency matters most
CITATIONS
Equipment Leasing and Finance Association. "Equipment Leasing and Finance Industry Horizon Report." ELFA, 2024. https://www.elfaonline.org
Medium/Prokop/7 Park Avenue Financial."Equipment Leasing Companies — Three Things You Must Know".https://medium.com/@stanprokop/equipment-leasing-companies-three-things-you-must-know-bf9229809c23
Government of Canada. "Canada Small Business Financing Program — Equipment Financing." Innovation, Science and Economic Development Canada, 2024. https://www.canada.ca/en/innovation-science-economic-development
Business Development Bank of Canada. "Equipment Financing for Canadian Businesses." BDC, 2024. https://www.bdc.ca
Canada Revenue Agency. "IT-233R: Leases of Tangible Property Acquired by a Lessor." CRA, current edition. https://www.canada.ca/en/revenue-agency
Statistics Canada. "Survey on Financing and Growth of Small and Medium Enterprises." Statistics Canada, 2023. https://www.statcan.gc.ca
CFA Institute. "Lease Accounting and Financial Statement Analysis." CFA Program Curriculum, 2024. https://www.cfainstitute.org
Deloitte Canada. "IFRS 16 Leases: Practical Guide for Canadian Companies." Deloitte, 2023. https://www.deloitte.com/ca
7 Park Avenue Financial."Financing Assets: Let An Equipment Finance Company Get The Job Done".https://www.7parkavenuefinancial.com/equipment-lease-options-business-leasing-asset.html
Financial Consumer Agency of Canada. "Business Financing Options in Canada." FCAC, 2024. https://www.canada.ca/en/financial-consumer-agency
