Canadian small and mid-sized businesses (SMEs) are entering Q3 2025 with a sharper focus on capital efficiency, especially when it comes to acquiring or upgrading essential equipment. A volatile mix of trade policy shifts, lingering tariff threats, and interest rate uncertainty is reshaping how businesses finance heavy machinery, trucks, trailers, and farming equipment.
With the Bank of Canada holding its overnight rate steady at 2.75%, while inflation ticks slightly above target, many entrepreneurs are asking: Should we wait to buy? Lease? Delay upgrades altogether? The short answer? There’s no one-size-fits-all. But what’s clear is that flexibility, risk management, and strategic planning are essential in today’s landscape.
Here’s what Canadian business owners need to know now.
Understanding the Current Landscape: Tariffs, Rates & Business Hesitancy
1. Tariff Concerns Are Back in Focus
Recent trade headlines point to renewed uncertainty around U.S.–Canada trade relations. Discussions surrounding new import duties on U.S.-made truck components and construction materials have raised alarms—particularly in B.C., Alberta, and Prairie provinces where much of the transportation and infrastructure equipment is either sourced or assembled using American imports.
While no sweeping tariffs have taken effect in July, the anticipation itself has impacted vendor pricing and procurement strategies. Some vendors are preemptively adjusting prices upward or reducing bulk order discounts—costs that often get passed down to businesses.
2. Interest Rates Are Holding—For Now
The Bank of Canada’s latest decision to pause rate cuts in July 2025 has left borrowing costs relatively elevated, especially compared to pre-2022 norms. Business lines of credit and equipment term loans remain pricier than desired, prompting many SMEs to explore asset-based lending and alternative leasing options.
At the same time, inflationary pressures in fuel, freight, and labor continue to squeeze margins. In this environment, business leaders are leaning on cashflow-preserving financing strategies, not just rate shopping.
Strategic Response: Smart Equipment Financing Tactics
3. Rethink Ownership—Lease Instead of Buy
One of the clearest trends this year is a shift away from ownership toward longer, more flexible lease terms. By leasing, businesses can:
- Avoid large upfront costs and preserve working capital
- Upgrade more frequently as technology or machinery needs change
- Bypass tariff-linked pricing spikes by leasing Canadian-sourced or previously leased equipment
At Sandhu & Sran, we’ve seen a strong rise in demand for equipment leasing solutions across sectors—from agriculture to construction—as business owners navigate uncertain margins.
4. Leverage Sale-Leaseback Financing to Unlock Cash
If your business already owns trucks or equipment, sale-leasebacks are becoming a go-to method for unlocking equity without disrupting operations. This model allows you to:
- Sell your equipment to a leasing provider
- Lease it back immediately for continued use
- Convert fixed assets into liquid capital for payroll, inventory, or expansion
We recently covered this in depth in our blog: Why Construction and Transport SMEs Are Doubling Down on Sale-Leasebacks in Mid-2025
Sector-Specific Strategies for Q3 2025
5. Construction: Use Multi-Asset Leasing for Large Projects
For contractors in B.C. or Alberta ramping up for provincial or federal infrastructure work, multi-asset leasing agreements are gaining popularity. These allow you to bundle multiple categories—earthmovers, cranes, trucks—under a single lease agreement with staggered schedules.
Benefits include:
- Predictable payments across phases of the project
- Reduced administrative overhead
- Easier cost pass-throughs in government bids
For a broader look at this, see: Unlocking Resilience: How Multi-Year Master Leasing Agreements Are Transforming Canadian SMEs
6. Transportation & Logistics: Structure Leases to Offset Tariff Risks
Fleets that rely on imported components should negotiate lease agreements that offer:
- Early return options in case market prices fall
- Usage-based payments, especially for long-haul routes with fuel cost variability
- Canadian-sourced assets to reduce exposure to cross-border tariff impacts
Our clients have also started using commercial truck leasing in British Columbia as a hedge against sudden pricing shifts in parts and repair costs.
Financing Smarter, Not Harder
7. Use Application Support to Speed Up Approvals
With many lenders tightening criteria in response to rate uncertainty, getting approved quickly often depends on how you package your application. At Sandhu & Sran, we guide clients on:
- Preparing complete business profiles
- Showcasing consistent cash flow or collateral
- Highlighting sector-specific equipment use cases
You can also refer to our guide: Things to Know Before Applying for Financing
8. Avoid Costly Mistakes—Especially in Volatile Periods
Some common missteps in today’s environment:
- Choosing too short a lease term, leading to frequent renewals at higher future rates
- Underestimating tariff-linked costs in contracts
- Skipping flexible options, locking into inflexible deals
To prevent such errors, our team compiled this helpful resource: Avoid These Top Equipment Leasing & Financing Mistakes
9. Explore Seasonal Payment Structures to Match Cash Flow Cycles
Industries like farming, construction, and transportation have revenue that fluctuates with the season. Fortunately, many equipment financing providers—including Sandhu & Sran—offer:
- Deferred initial payments (3–6 months) to allow ramp-up
- Seasonal escalation clauses, syncing payment spikes with revenue inflows
- Custom step-up/step-down terms for cyclical sectors
These options help mitigate cash crunches during off-peak periods and reduce pressure in uncertain macro environments.
10. Blend Leasing with Government Support Programs
A number of provincial and federal grants—especially those tied to energy-efficient or locally produced equipment—can be layered with lease financing to lower total cost of ownership. For example:
- Clean Tech adoption grants in B.C.
- Agriculture equipment subsidies
- Export-oriented SME incentives
While these programs change quarterly, businesses that coordinate their leasing with available incentives often save 20–30% upfront or over lease term.
We assist clients in identifying and aligning their applications with such opportunities. This support complements our regular offerings like equipment leasing in Abbotsford and machinery loan solutions.
11. Consider Credit Score Optimization Before Applying
With lenders being more selective in 2025, it pays to improve your credit profile before submitting applications. Practical ways to do this:
- Reduce short-term liabilities visible on bank statements
- Consolidate high-interest loans into manageable terms
- Secure small vendor credit and pay consistently
Businesses in transport and construction, for instance, have seen faster approvals when these steps are taken 30–60 days in advance.
Improve Your Credit Score Before Applying for an Equipment Loan gives a deeper look into this.
What Types of Equipment Are Smart to Finance Now?
Not all equipment reacts the same to market volatility. In Q3 2025, the following asset types are seeing favourable financing terms despite broader economic pressure:
| Equipment Type | Why It’s Finance-Ready Now |
| Semi-trucks | Strong resale value and consistent demand |
| Farm machinery | Government support and productivity-linked ROI |
| Excavators & loaders | Infrastructure investment boom and tariff-neutral supply |
| Trailers | Modular and short-term leasing options available |
| Compact equipment | Ideal for urban & renovation projects, available locally |
If you’re planning acquisition, our team can help evaluate finance vs. lease for each scenario. Learn more from:
What Is Equipment Leasing & How It Works
FAQs: Equipment Financing in a Volatile Economic Environment
Q1. Should I delay equipment upgrades until rates drop again?
If the upgrade is critical to productivity or expansion, delaying could cost more in lost revenue than gained through minor rate cuts. Flexible leasing helps hedge against uncertainty.
Q2. Are sale-leasebacks only for large businesses?
Not at all. Even single-truck owner-operators and small builders use sale-leasebacks to unlock working capital from existing assets.
Q3. Can I lease used equipment instead of new to save costs?
Yes. Used equipment leasing has become common, especially for high-residual value machinery. We help source and structure those deals.
Q4. What if I have a lower credit score? Can I still qualify?
Yes, particularly if you provide strong collateral or a co-signer. Also, sector-specific experience and seasonal revenue consistency are taken into account.
Q5. How do I know if tariffs will impact my equipment cost?
Our advisors track which vendors and parts are tariff-exposed. We can help you choose alternatives or structure leases that minimize exposure.
The Bottom Line: 2025 Is About Financing With Foresight
SMEs in B.C., Alberta, and across Canada are no longer waiting for a “perfect time” to finance—they’re adapting intelligently. Whether you’re growing a logistics fleet, investing in farm tech, or scaling up construction contracts, the right lease or loan today can build long-term resilience.
At Sandhu & Sran Leasing & Financing, we offer tailored solutions backed by deep experience in Canada’s commercial finance landscape. From fast approvals to flexible structuring, our mission is to support your business through both opportunity and uncertainty.