In early 2025, Canada imposed a 25% counter-tariff on non-CUSMA-compliant vehicles and equipment imported from the U.S.—a move aimed at protecting domestic industry. While the broader objective is national economic resilience, the immediate effect for Canadian businesses is clear: equipment just got more expensive.
This spike in acquisition costs is prompting businesses across sectors—from logistics and construction to agriculture and light manufacturing—to rethink how they finance their equipment. Instead of delaying growth or reducing capacity, many are turning to creative financing strategies that reduce upfront costs, preserve capital, and offer tax advantages.
In this post, we’ll explore the most effective alternatives that SMEs in regions like Abbotsford, Surrey, and Edmonton are using to weather these pricing pressures—and why working with an experienced financing partner is now more important than ever.
How Tariffs Are Shaping Equipment Costs in 2025
The 25% import tariff affects a wide range of business-use assets sourced from the U.S., including:
- Medium and heavy-duty commercial trucks
- Specialized manufacturing and food-processing equipment
- Agricultural tractors, tillers, and combines
- Earthmoving and mining machinery
- Fleet vehicles for distribution and logistics
With base prices rising by tens of thousands of dollars per unit, equipment financing needs have increased in size and complexity. This puts pressure not just on borrowers, but on lenders and brokers who must now tailor structures that keep deals viable in a volatile pricing environment.
Why Traditional Financing Models May Not Be Enough
Conventional term loans and equipment leases are still in demand—but they often fall short in today’s landscape. Here’s why:
- Higher principal amounts from increased equipment costs strain borrower debt service ratios
- Loan approvals take longer as lenders tighten criteria in response to economic uncertainty
- Pre-approved loan limits may no longer cover full equipment prices post-tariff
- Inflation and interest rate sensitivity make long-term borrowing riskier for businesses with variable revenues
To address these challenges, more businesses are exploring flexible, layered, and hybrid financing models.
1. Sale-Leaseback Agreements
A sale-leaseback is a financing tool that allows businesses to sell an owned asset to a lender or leasing company and then lease it back for continued use. This approach frees up capital immediately while maintaining operational continuity.
Why it works post-tariff:
- Unlocks equity from equipment already on your balance sheet
- Reduces the need to finance newly inflated equipment prices
- Improves liquidity for businesses planning to expand or reinvest
Businesses in Alberta’s oil & gas and transportation sectors are increasingly using sale-leasebacks to fund upgrades without taking on additional loan obligations.
2. Lease-to-Own (LTO) Programs
Lease-to-own structures allow businesses to lease equipment for a defined period with a pre-arranged purchase option at the end of the term. This spreads out costs while giving ownership certainty.
Key benefits in a tariff-driven market:
- Lower monthly lease payments
- Optionality to upgrade or walk away
- Predictable asset acquisition without full upfront exposure
- Often easier to approve than large equipment loans
In Abbotsford and Surrey, where many logistics firms are expanding delivery fleets, lease-to-own has become a preferred model to hedge against future cost increases.
3. Multi-Asset or Bundled Financing
Instead of financing equipment piece by piece, businesses are consolidating multiple purchases into a single lease or loan package. This bundled approach is gaining traction across industries.
How it helps:
- Simplifies payment schedules and contract management
- Offers leverage in negotiating vendor discounts
- Reduces overall financing risk by spreading it across assets
- Enables scalable business growth without administrative overload
This is particularly useful for mid-sized manufacturers, who may need to upgrade production lines, material handling systems, and packaging stations simultaneously.
4. Used Equipment Financing and Refurbished Leasing
Used and refurbished equipment is seeing a surge in demand because it’s not subject to new import tariffs and is often more readily available than new units. Lenders are increasingly willing to finance these assets, provided they meet operational and valuation benchmarks.
Why this trend matters now:
- Up to 40% lower cost than new imports
- Avoidance of tariffs
- Faster access with less supply chain lag
- Great fit for businesses that don’t require the latest tech
SMEs in construction and agriculture are leading adopters, often acquiring pre-owned assets through local vendors and financing through regional lenders with flexible terms.
5. Deferred or Seasonal Payment Structures
Cash flow-sensitive industries like farming, construction, and freight often face mismatched revenue cycles. Lenders are adapting with seasonal and deferred payment options, which structure repayment around income patterns.
Strategic advantages:
- Lower or no payments during off-seasons
- Higher payments aligned with harvest or project cycles
- Improves budgeting and cash reserves
For example, an Alberta grain hauler might defer truck lease payments until peak harvest months, then catch up in higher-margin periods.
6. Refinancing Existing Equipment to Offset New Costs
Another creative strategy is refinancing equipment already owned or nearing payoff. This can involve:
- Extending the term of a current loan to reduce monthly obligations
- Using paid-off equipment as collateral for a new loan
- Consolidating multiple loans into one payment
Refinancing can create working capital to fund new purchases or cushion cash flow during economic uncertainty.
7. Vendor Financing Partnerships
Manufacturers and distributors are increasingly offering in-house or partner-based financing programs to ease the impact of higher prices. These programs typically include:
- Deferred down payments
- Interest-free periods (for 3–6 months)
- Trade-in credits on previous models
- Preferred lease rates from lender networks
This approach benefits both sides: vendors move inventory, and buyers get softer upfront terms. For businesses sourcing equipment from local suppliers in Surrey or Abbotsford, these relationships can be an untapped source of affordable capital.
8. Structured Equipment Swaps and Trade-Ups
Another emerging trend is the structured trade-up, where businesses return or trade in equipment mid-lease in exchange for newer models with updated specs. These “rollover leases” work well in:
- Construction firms dealing with regulatory upgrades
- Transport businesses upgrading fleet fuel efficiency
- Agricultural operators phasing out aging harvesters
Rather than carry debt for obsolete equipment, businesses are working with lenders to build early swap provisions into lease agreements.
9. Financing Add-Ons: Insurance, Maintenance, Telematics
More lenders are bundling non-asset services—such as warranty protection, insurance, or telematics—into lease or loan payments. The idea is to turn unpredictable operational costs into fixed monthly expenses, which is increasingly valuable in 2025.
These packages are especially appealing to:
- Small fleet owners managing vehicle uptime
- Food producers with time-sensitive machinery maintenance
- Tradespeople using mobile service units requiring constant diagnostics
Bundled solutions provide cost control, reduce risk, and free up administrative bandwidth—all major wins in a tariff-impacted financing landscape.
10. Multi-Year Procurement and Financing Planning
Long gone are the days of one-off asset purchases. Today’s best-performing SMEs are forecasting equipment needs over multiple years and engaging financing partners to plan accordingly. This includes:
- Securing multi-asset approvals in advance
- Building staggered financing schedules to optimize tax exposure
- Locking in rates or equipment options before additional tariffs or price hikes hit
Working with a financing partner who can support multi-phase growth plans is becoming a competitive edge—especially for regional businesses looking to scale sustainably.
FAQs: Creative Equipment Financing Strategies in 2025
Q: What are the benefits of lease-to-own agreements right now?
Lease-to-own programs let you use equipment with lower monthly payments and a pre-set buyout option at the end. In a high-tariff market, they offer flexibility and future ownership without large upfront capital.
Q: Can I finance used equipment or buy from private sellers?
Yes. Used equipment already in Canada isn’t subject to new import tariffs, making it a smart choice. Lenders like Sandhu & Sran Leasing & Financing support financing for used equipment sourced locally or through trusted auctions.
Q: What if I already own equipment—can I still leverage it?
Absolutely. Through sale-leaseback agreements, you can sell owned equipment to a lender and lease it back. This frees up capital while allowing you to retain use of the asset.
Q: How do I qualify for seasonal or deferred payment plans?
These plans are typically available for industries with well-defined revenue cycles (e.g., farming, forestry, logistics). You’ll need to show seasonal cash flow data and work with a lender that specializes in flexible terms.
Q: Is it possible to finance multiple pieces of equipment under one plan?
Yes. Bundled or multi-asset financing allows you to combine several purchases under a single contract, simplifying management and potentially improving your terms.
Q: How can I reduce financing risk while growing in a high-cost market?
Work with a lender that offers tailored solutions like early upgrade clauses, fixed-rate leasing, and multi-year planning. Structuring financing with risk management in mind helps preserve your financial agility.
Q: Are there tax advantages to leasing or bundling services?
Yes. Lease payments are typically fully deductible. Bundling services like insurance and maintenance also creates predictable, deductible monthly costs, which simplifies tax planning.
Final Thoughts: Smart Moves in a Changing Market
The 2025 tariff landscape is reshaping how Canadian businesses think about equipment acquisition. While cost pressures are real, so are the opportunities to finance smarter.
By leveraging creative strategies—like leasebacks, seasonal structures, bundled services, and used equipment financing—SMEs can adapt without sacrificing growth or liquidity.
As always, the key is to align financing to your business model, cash flow, and tax strategy. That’s where an experienced partner comes in.
Sandhu & Sran Leasing & Financing works with businesses across British Columbia and Alberta to design custom solutions that make sense—whether you’re buying one truck or retooling an entire production line.
When equipment prices go up, strategy matters more than ever. And smart financing is where that strategy begins.