New equipment can be costly. A single machine, vehicle, or IT system may cost tens or even hundreds of thousands of dollars. For many Canadian businesses, paying cash up front is not realistic, especially during growth or expansion. The good news is there are several reliable ways to finance equipment purchases in Canada, including government-backed loans and repayable financing.
Below is a clear breakdown of your main options, with real program examples and practical tips.
Most equipment financing falls into repayable funding. This means you borrow money and pay it back over time. The advantages include faster access, larger amounts, and flexibility on eligible equipment.
The Business Development Bank of Canada (BDC) Equipment Loan is a common tool used by small and medium-sized businesses.
What it can cover
Key features
BDC also offers a Technology Equipment Loan for software, IT infrastructure, and digital systems, which is often used by service and tech-driven companies.
Many business owners use grant discovery tools to check if BDC financing or other equipment programs match their business profile.
Many provinces offer their own equipment or capital financing, often delivered through crown corporations or economic development agencies.
Some programs are limited to certain industries.
For example:
These programs often offer better terms than commercial banks. However, they require strong documentation and a clear business case.
Equipment loans can often be combined with grants or tax credits, as long as you are not double-counting the same expense.
Common examples:
This approach can reduce costs. Check provincial and federal funding guidelines for details.
When choosing equipment financing, compare:
Review each program’s guidelines and ask questions before you sign. Use online tools or speak with your accountant to estimate monthly payments and total interest.
Whether you apply through BDC or a provincial lender, you will usually need:
Startups may qualify, but often need stronger projections or owner guarantees.
Platforms like GrantHub track active equipment loans, grants, and financing programs across Canada. This helps you see what you may qualify for based on your business profile, industry, and location.
Assuming equipment loans are grants
Most equipment programs are fully repayable. Budget for monthly payments from day one.
Waiting until after you buy
Many programs require approval before you purchase the equipment.
Ignoring total project costs
Installation, shipping, and training may not be included automatically. Ask what is eligible.
Not checking provincial options
Businesses often default to banks and miss better provincial or federal terms.
Q: Is BDC equipment financing a government grant?
No. BDC financing is a repayable loan. It is government-backed but must be paid back in full.
Q: Can startups finance equipment in Canada?
Yes, but requirements are stricter. Expect to provide detailed projections and possibly personal guarantees.
Q: How much equipment financing can I get?
Amounts vary by program. Some provincial programs start at $50,000, while others cover up to 80–100% of equipment costs.
Q: Can I use financing for used equipment?
Often yes. Many lenders, including BDC, allow used equipment if it meets condition and valuation requirements.
Q: Can equipment loans be combined with grants?
In many cases, yes. Loans can fund the purchase while grants support related costs like training or productivity improvements.
Equipment financing works best when you compare options across federal and provincial programs. Review eligibility and requirements carefully, and ask questions if you are unsure. Comparing terms helps you find the best fit for your business needs and budget.
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