New equipment is expensive. For many Canadian small and medium-sized businesses, paying cash can slow growth or strain working capital. The BDC Equipment Loan, also called the Equipment Purchase Loan, helps you finance new or used equipment with long-term, fixed repayment terms through the Business Development Bank of Canada (BDC), a federal Crown corporation.
The BDC Equipment Loan is a repayable federal loan designed to help Canadian businesses buy equipment, machinery, and technology needed to grow. It is not a grant. You must repay the full amount plus interest.
Two commonly referenced BDC options fall under this category:
Both programs support equipment purchases across most industries and operate nationally.
BDC allows financing for a wide range of business equipment, including:
New and used equipment may be eligible, subject to BDC approval.
To qualify for a BDC Equipment Loan, your business must generally meet the following criteria:
BDC assesses both the business and the owner’s credit strength. Startups and early-stage businesses may face stricter review or lower approved amounts.
If you want to check your eligibility for programs like this, GrantHub helps you compare requirements for hundreds of Canadian funding programs.
Applying for a BDC Equipment Loan is more structured than a bank line of credit. Expect a credit-driven review.
Define the equipment purchase
Collect quotes or invoices showing the equipment cost, supplier, and expected delivery date.
Prepare financial documents
BDC typically requests:
Apply directly through BDC
Applications are submitted through BDC’s website or with a BDC account manager.
Credit assessment and approval
BDC reviews your repayment capacity, credit history, and the equipment’s business value.
Loan offer and funding
Once approved, funds are released according to the purchase agreement.
If you’re looking for other funding options, GrantHub makes it simple to compare loans, grants, and incentives all in one place.
Under the BDC Equipment Purchase Loan, eligible businesses may finance:
Financing more than 100% of the equipment cost is possible. This extra amount can help pay for installation, software, or delivery.
Assuming it’s a grant
The BDC Equipment Loan is fully repayable. Budget for monthly payments and interest.
Applying without firm equipment quotes
Missing or vague purchase details can delay approval.
Ignoring personal credit health
Owner credit plays a major role, especially for SMEs.
Overestimating affordability
Just because BDC can finance up to 125% doesn’t mean your cash flow should.
Q: Is the BDC Equipment Loan a grant or a loan?
It is a loan, not a grant. The full amount must be repaid with interest.
Q: Can I buy used equipment with a BDC Equipment Loan?
Yes. Both new and used equipment may be eligible if approved by BDC.
Q: How much can I borrow through the BDC Equipment Purchase Loan?
Eligible businesses can finance up to 125% of the equipment cost, depending on credit strength.
Q: Do I need a down payment?
BDC can finance a high portion of the purchase, but some businesses may still be asked to contribute equity based on risk.
Q: Are loan repayments tax deductible?
Interest payments are generally tax deductible as a business expense. Principal repayments are not. Confirm with your accountant.
The BDC Equipment Loan can be a strong option if you need predictable financing for essential equipment and have solid credit. Before applying, it helps to compare it with other federal, provincial, and sector-specific programs. GrantHub tracks hundreds of active funding programs across Canada, making it easier to see which loans, grants, and incentives match your business goals.
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