In Canada, equipment leasing has become a critical financial solution across industries. According to IBISWorld, the industrial equipment rental and leasing industry reached a market size of $5.7 billion in 2025, growing at a compound annual growth rate (CAGR) of 1.8% from 2020 to 2025.
This steady growth reflects the increasing reliance on leasing as a way to manage costs, adapt to market changes, and access up-to-date equipment without the long-term commitment of ownership. In this article, we explore how equipment leasing works, the types of leasing agreements available, and why it has become a strategic growth driver for Canadian businesses.
What is Equipment Leasing?
Equipment leasing is a contractual agreement in which a business (the lessee) rents a piece of equipment from an equipment owner (the lessor) for a specified period of time, in exchange for monthly lease payments. This financing model allows companies to acquire essential business equipment without the significant upfront costs of an outright purchase.
At SPAR Leasing, we make equipment leasing simple, flexible, and fast for Canadian businesses. With quick approvals (often within 24 hours) and customized lease terms, we help you access the equipment you need without compromising your cash flow.
Ready to grow your business? Let’s build a custom leasing plan
Common Types of Leaseable Equipment in Canada
Here are some examples of the most common types of business equipment leased across Canada:
- Heavy Machinery & Industrial Equipment: Excavators, bulldozers, backhoes, skid steers, wheel loaders, cranes, and long-lasting machinery used in site prep and heavy lifting.
- Medical & Health Equipment: X-ray machines, ultrasound units, dental chairs, sterilizers, patient monitors, EMR systems, and lab analyzers.
- Office & Technology Equipment: Desktop computers, laptops, monitors, printers, routers, phone systems, and cloud-connected servers.
- Manufacturing & Warehousing Assets: Conveyor belts, packaging machines, industrial mixers, injection molding machines, pallet wrappers, and forklift fleets.
- Retail & Hospitality Equipment: Commercial ovens, deep fryers, walk-in freezers, espresso machines, POS terminals, digital signage, and furniture.
- Transport Vehicles & Fleet Equipment: Commercial vans, refrigerated trucks, flatbeds, cargo trailers, GPS fleet tracking systems, and EV charging stations.
Need a particular piece of equipment? Contact us
5 Advantages of Equipment Leasing for Canadian Businesses
1. Lower Upfront Costs
Leasing eliminates the need for a large down payment, which can be a major barrier when acquiring costly equipment. Instead of a lump-sum investment, businesses make predictable monthly lease payments over a defined lease period.
- Helps preserve cash reserves for other priorities like hiring, marketing, or inventory.
- Reduces reliance on traditional bank loans or high-interest equipment business loans.
2. Improved Cash Flow Management
Leasing smooths out your monthly payments, making it easier to budget and maintain positive cash flow dynamics.
- Enables better long-term planning.
- Minimizes the financial burden during periods of low revenue or seasonal demand.
- Ideal for businesses that want to avoid stretching their lines of credit or increasing their debt stack.
3. Access to the Latest Technology
Leasing allows regular upgrades to newer pieces of equipment, avoiding issues with outdated or obsolete tools.
- Stay ahead of market conditions with access to the latest production equipment and technology solutions.
- Many equipment leasing agreements include renewal options, upgrade paths, or buyout options at fair market price at the end of the lease.
4. Tax Advantages
In many provinces, lease payments are treated as a business expense, providing potential deductible expenses that reduce your tax returns liability.
- This reduces your overall tax burden and can improve your year-end tax returns position.
- Unlike equipment purchases, where deductions happen gradually through depreciation, leasing allows you to fully expense lease payments during the lease period, offering more immediate tax relief.
- These deductible expenses can include not only the lease payments but also certain associated costs like insurance or maintenance, depending on your equipment lease agreement.
5. Flexible Terms and Payment Options
SPAR Leasing offers a variety of leasing options, including lease-to-own agreements and seasonal payment options.
- Customize your leasing term, loan term, and equipment lease rate based on your business’s financial outlook and annual revenue.
- Our advisors work closely with clients to structure equipment lease contracts that match operational needs, lease coverage options, and risk profiles.
Average equipment lease rates in Canada: What businesses should know
How Do Equipment Leasing Services Work?
- Lease Application & Credit Check: Businesses submit a lease application and undergo a review of their credit score, credit history, and financial statements. Depending on the type of financing, this can include checking the business’s revenue requirement, payment history, or even proof of insurance.
- Equipment Selection & Quote: The business selects a type of equipment and receives price quotes from equipment dealers or brokers.
- Lease Terms Negotiation: The parties agree on the leasing terms, which typically range from 2 to 5 years. Terms vary based on the type of lease, the cost of equipment, and the company’s credit profile.
- Agreement Finalization: The equipment leasing company retains ownership of the asset, while the business agrees to make regular payments (usually monthly lease payments) over a defined lease period or rental arrangement.
- End-of-Lease Options: At the end of the lease, the business can:
-
- Return the piece of equipment
- Renew the lease for a shorter period
- Exercise a purchase option to buy the equipment at a fair market value or nominal price, depending on the lease type
What’s Included in a Lease Agreement?
A standard equipment lease contract can include:
- The type of equipment and its details
- Lease duration (leasing term) and monthly rent charges
- Insurance costs and maintenance responsibilities
- Terms for early termination, renewal, and buyout lease options
- Sales tax, origination fees, and any late charges or company fees
Leasing vs. buying equipment | 8 key benefits to consider
Types of Equipment Leasing Agreements
1. Operating Lease
An operating lease is ideal for businesses that need equipment for a limited time. Commonly used for rapidly depreciating or technology-based equipment, this type of lease does not transfer ownership to the lessee.
- The equipment remains off the balance sheet, making it attractive for improving financial statements.
- Lease terms are often shorter than the equipment’s useful life, and payments are treated as deductible business expenses.
- Typically used for office furniture, IT equipment, or other pieces of equipment that require regular upgrading.
2. Financial Lease (Capital Lease)
A capital lease is a longer-term option where the lessee assumes many of the risks and benefits of ownership.
- The leased item appears as an asset and liability on the lessee’s balance sheet presentation.
- It often includes a purchase option at the end of the lease for a nominal price or market value.
- Ideal for business equipment acquisitions like production equipment, heavy machinery, or high-cost medical devices.
- Offers potential tax benefits through depreciation deductions and interest expense claims.
3. Lease-to-Own (Purchase Upon Termination)
A lease-to-own agreement allows the lessee to make equipment lease payments over time with the intent to eventually own the asset.
- At the end of the leasing term, the business purchases the equipment at a predetermined purchase price.
- Best suited for companies planning to keep the equipment long-term and avoid the hassle of new equipment acquisitions.
- Popular among small businesses looking for a flexible financing option that doesn’t require a traditional loan or long approval from a bank.
Choosing the right structure depends on your credit report, type of equipment, and desired tax treatment. At SPAR Leasing, we’ll work with you to evaluate your needs and deliver a solution that supports your goals.
Get the equipment you need without the upfront cost
How Do I Know if I Qualify for Equipment Leasing?
At SPAR Leasing, we believe access to equipment shouldn’t be limited by red tape or rigid banking requirements. That’s why we offer faster approvals, flexible financing solutions, and better opportunities for Canadian businesses at every stage of growth.
Unlike traditional lenders, SPAR takes a practical and supportive approach to approval. We consider:
- Your business credit score and credit history. A strong payment history helps, but we won’t penalize you for being new or growing.
- Financial statements, annual revenue, and growth potential. We assess the full picture of your business, not just one metric.
- Nature and cost of the equipment requested. Whether you need a single item or a full fleet, we work with you to structure a lease that makes sense.
- Cash flow dynamics and debt obligations. Our goal is to support your business, not add to your financial burden.
Even if you don’t meet the strict criteria of banks or other equipment finance providers, SPAR Leasing gives you a real chance. We regularly approve businesses with minimal requirements, limited credit history, or non-traditional funding partners, because we focus on potential, not just paperwork.
Fuel your growth with flexible equipment leasing
SPAR Leasing: Smart Equipment Leasing Solutions
At SPAR Leasing, we make equipment financing easy, fast, and flexible for Canadian businesses. We understand that no two companies are alike, which is why we offer personalized leasing solutions that fit your needs.
With quick approvals, competitive lease rates, and a team that works closely with you every step of the way, we help you access the equipment you need without the financial strain of large upfront costs.
