Equipment financing or leasing?
With equipment financing, the business buys the asset and repays it; with a lease, it rents the asset for an agreed term and the lessor stays its owner during the lease. The lender or the lessor decides and writes its terms in its offer.
Choose my amountThe answers
- What is the difference between equipment financing and a lease?
- With equipment financing, the business owns the asset, which generally serves as security for the lender. With a lease, the lessor remains the owner for the length of the lease; what happens at the end of the lease is written in the contract.
- When does one or the other come up?
- Financing suits equipment the business wants to own and keep for a long while. A lease suits equipment it wants to use for a set term, then return, replace or buy out as the contract provides.
- What does each one ask of the business?
- In both cases, the supplier’s quote and your business bank statements are the starting point. The lender or the lessor may ask for a down payment or a first payment, which it sets in its written offer.
- Financing or leasing: which one for my business?
- It depends on what you want at the end: to own the equipment, or to be able to return or replace it. The accounting and tax treatment differs too; your accountant can explain it, and the lender decides what it proposes.
What the lender looks at
- Actual deposits, month by month
- The payment, loan or lease, is compared with what the business takes in.
- Trend over the period
- Rising revenue supports equipment that adds capacity.
- NSF cheques
- A returned payment weighs on an equipment file, bought or leased.
- How long the business has been operating
- A younger business can be presented; the lender sets its thresholds.
$0 upfront · 7% only if funded
An intermediary, not a lender.
The lender sets the final amount and its cost in its written offer.
Choose my amount