Use case

Funding an equipment purchase: how to size it and what to watch.

A machine that pays for itself in months is one of the easiest requests to justify.

✓ Checking what you qualify for does not affect your credit score.

How should a business fund an equipment purchase?

Short answer: Match the funding to the asset. Long-life equipment you can plan for usually suits an equipment loan or lease. Urgent replacements, used equipment or installation costs a lender will not finance suit a short advance. Estimate the monthly gain the equipment brings and make sure it covers the payment.

Key facts

Long-life assets suit loans or leases
Urgent or used equipment suits an advance
Include installation and training
The monthly gain should cover the payment

What this looks like

A machine that pays for itself in months is one of the easiest requests to justify.

An oven, a lift, a compressor, a printer or a commercial dishwasher can add capacity or replace a failing unit. The return is measurable: more jobs, faster service or no more repair bills.

How to size it

Size the request to the quote, including delivery and installation. If the equipment adds about $4,000 a month in gross profit, a payback that takes four to six months of that gain is easy to carry.

Illustrative arithmetic

A commercial bakery depositing about $60,000 a month asks for $28,000 for a deck oven. At a 1.24 factor the payback is $34,720, a cost of $6,720. Over roughly 6 months that is about $276 per business day, or close to 10% of monthly deposits.

Total payback: $34,720.
Cost: $6,720.
Payment: about $276 per business day, close to 10% of monthly deposits.

Every figure on this page is illustrative arithmetic in Canadian dollars. It is not an offer, a quote or a promise of approval.

Which structure tends to fit

A short merchant cash advance suits a defined purchase. Equipment financing is often cheaper when you can wait and the asset can secure the loan.

Where it goes wrong

Buying more machine than the business needs
Forgetting installation, training and downtime
Using short money for an asset that pays back slowly

Before you apply

Get a written quote with delivery and install
Estimate the monthly gain in plain dollars
Compare with equipment financing on total cost

Typical starting points

Monthly revenueTypically from around $20,000 a month in deposits for Canadian files. The exact line varies by funder and by file.

Time in businessTypically about 12 months. Newer businesses can be reviewed, but the options narrow.

Account healthLimited low-balance or negative days. Funders read the last few months of bank statements for this.

CreditScores from 500 are considered. A score of 600 or higher opens more options and better offers.

DocumentsA signed application and recent business bank statements, typically the last four months.

Existing advancesFiles with an existing advance can be reviewed, including second position.

Speed versus price

Equipment lenders usually price lower because the machine secures the loan, but approvals take longer and need more paperwork. An advance is faster and leaves the equipment unencumbered. When a broken unit is costing sales every day, speed often wins; when the purchase is planned, the cheaper structure usually does. Decide which one you are in before comparing offers.

Sources and review

Reviewed by the Merchant Fund Express team on October 12, 2026. Official pages checked as of that date.

Common questions

How much should I ask for?

Ask for the amount you can name in dollars and tie to a quote, invoice or schedule. A smaller, specific request is easier to approve and cheaper to repay.

Which structure is best?

It depends on whether the need is a one-time purchase or a recurring gap. See the comparison pages for the trade-offs.

How fast can I get it?

Decisions are often the same day on a complete file, and funding can follow the next business day.