Despite its growing popularity, equipment financing in Canada is surrounded by misconceptions. Believing these myths can prevent business owners from making smart financial decisions. Let’s bust five of the most common ones.
Myth #1: Financing Is Too Expensive
Many assume interest costs outweigh the benefits. In reality, financing spreads out payments, keeps cash available, and often provides tax deductions that reduce overall costs.
Myth #2: Only Big Companies Can Finance
Small businesses and startups benefit just as much as large corporations. Many lenders even specialize in helping small businesses with flexible approval criteria.
Myth #3: Banks Are the Only Option
Traditional banks are just one source. Canada has dozens of alternative lenders who approve applications faster, with terms often better suited to industry-specific needs.
Myth #4: Financing Means You Never Own the Equipment
Many financing agreements include buyout options at the end of the term, letting you purchase the equipment for a small percentage of its original cost.
Myth #5: Paying Cash Is Always Better
While paying cash avoids interest, it ties up working capital and eliminates potential tax write-offs. Financing preserves liquidity and provides financial flexibility.
The Truth About Financing
By understanding the realities of equipment financing, Canadian business owners can avoid missed opportunities. The right financing structure reduces risk, protects cash flow, and positions businesses for growth.
