A new Bobcat S650 lists for around $85,000–$95,000 CAD. A Cat 299D3 XE pushes past $120,000. Most contractors don't pay cash. This is an honest breakdown of how equipment financing actually works in Canada in 2026 — including the parts the dealer's finance manager is hoping you don't ask about.
The break-even question. It sounds simple but most buyers skip it.
If your CTL payment is $1,500/month, you need to generate at least $1,500/month in revenue that the machine is directly responsible for — revenue above what you'd otherwise earn by renting a machine or subcontracting that work. Not total revenue. Marginal revenue from owning versus not owning.
For a full-time contractor doing earthwork, landscaping, or utilities who is currently renting equipment 15+ days per month, the math often works. At $600–$900/day for a CTL rental in most Canadian markets, 15 rental days is $9,000–$13,500 in rental cost per month — and the owned machine payment is $1,500. That's an obvious financial case for ownership.
For someone who uses a machine 3–4 days per month, it's not. Rent the machine. Finance it when the utilization justifies it.
The path of least resistance. Walk into the dealer, buy a machine, sign the financing paperwork before you leave. Dealers push this route because they earn a referral fee from the OEM finance company, and because it closes deals faster than sending buyers out to find their own financing.
OEM programs run promotional rates — 0% for 12 months deferred, or 2.9% for 60 months — during slow selling periods. These promotions are real. If you're buying during a slow quarter (often Q3 and Q4 in Canada) and the OEM is pushing units, you can get genuinely good rates through dealer financing.
The catch is the fine print. A "0% deferred" offer often means no payments for 12 months, then the full balance becomes due or converts to standard financing rate — which may be 8–12% on the remaining balance. That balloon at month 13 is the part the finance manager breezes past. Ask specifically: what is the rate after the promotional period, and what are the terms if I don't pay the full balance at that point?
The Business Development Bank of Canada (BDC) is worth knowing about. They exist to finance small business equipment purchases in cases where commercial banks want more security or a longer track record. Rates aren't always lowest, but approval criteria are more flexible than a commercial bank term loan for a contractor with two years of operation.
TD Commercial and RBC Business Banking both do equipment loans directly. The rate at TD or RBC for an established business (3+ years operating, clean credit) in 2026 runs approximately prime + 1–2%. With prime sitting at roughly 4.5–5%, that puts you at 5.5–7% for strong commercial credit. Equipment loans through the bank are secured against the machine — they take a PPSA registration on the unit, which means if you default, they can recover the equipment. Same as OEM financing in that respect.
For a newer business or first-time borrower, the rate premium is real. Expect 9–15% APR if your business is under two years old or your credit history is thin. At 12% on a $75,000 CTL over 60 months, you're paying roughly $1,668/month and $25,000 in interest over the life of the loan. That's the cost of higher-risk financing — factor it into your break-even math.
A lease is not a loan. In a loan, you own the machine from day one (subject to the lender's security interest). In a lease, the leasing company owns the machine and you pay for the right to use it. At the end of the lease term — 36, 48, or 60 months — you either buy it at a predetermined residual value, return it, or roll into a new lease.
The accounting treatment matters. For some business structures, an operating lease keeps the liability off the balance sheet — the monthly payment is an operating expense, not a capital asset and corresponding debt. Whether that matters to you depends on your business structure, your lender covenants, and whether you're seeking other credit while the equipment is financed. Ask your accountant, not the leasing company's sales rep.
Equipment leasing companies in Western Canada — Western Equipment Finance in Calgary, Equilease operating nationally — specialize in exactly this: construction and agricultural equipment, 36–60 month terms, competitive rates for established operators. Finance IT is active in Ontario and Atlantic Canada. These companies can often move faster than a bank and with less documentation friction, especially for repeat customers.
Buying a used CTL through Ritchie Bros. Auctioneers (or their online platform IronPlanet) is common. Ritchie Bros. has its own financial services arm — Ritchie Bros. Financial Services — that can arrange financing on auction purchases, including used machines. DLL Finance (De Lage Landen) also operates in Canadian equipment financing and works with dealers and auction houses.
Private sale used machine financing is harder. Banks want to see a formal bill of sale, proof of insurance, and the machine's serial number for a PPSA search before they'll lend against it. If the machine has existing liens from a prior owner's financing, those need to be cleared before the purchase. A PPSA search through your provincial registry is cheap — $8–$15 CAD — and mandatory before any private purchase.
New machines from OEM programs: some promotional programs offer 0–10% down, particularly if you have strong credit and an existing dealer relationship. Don't count on this as a given — 10–20% down is more realistic for a new-to-dealer buyer.
Used machines through dealers: 20% down is standard. The machine has already depreciated; the lender's security position is weaker than on a new machine. They compensate with a higher down payment requirement.
Used private sale: if you're financing through a personal line of credit or unsecured loan (which is often the only option), the "down payment" concept is replaced by whatever your approved credit limit allows. If your line of credit is $40,000 and the machine costs $55,000, you're either bridging the gap with cash or finding additional financing.
The Bank of Canada prime rate through early 2026 sits in the 4.5–5% range following the rate cycle that peaked in 2023. Equipment loan rates have followed:
| Borrower Profile | Approx. Rate (2026) | Monthly Payment on $75K / 60 mo. |
|---|---|---|
| Established contractor, strong credit (5+ years) | 5.5–7% | $1,433–$1,485 |
| Growing contractor, decent credit (2–4 years) | 7–9% | $1,485–$1,558 |
| New business, marginal credit | 10–15% | $1,594–$1,783 |
| OEM promo (0% for 12 months, then converts) | 0% / then 8–10% | $0 first year / higher after |
The $45,000 compact skid steer financed at 6.5% over 48 months lands at approximately $1,068/month. If you're paying $600–$700/day to rent a machine and you're renting 3 days per week from May through October (roughly 65 days), that's $39,000–$45,500 in annual rental spend. The owned machine at $1,068/month costs $12,816/year. The case for ownership is clear — the only remaining question is whether you have the down payment and can sustain payments through slow winter months.
Capital Cost Allowance is how Canada Revenue Agency lets you deduct the cost of depreciating assets from your business income. Skid steers and CTLs fall under CCA Class 10, which carries a 30% declining balance rate.
In the first year of ownership, you can claim 15% (half the annual rate applies in the acquisition year — the "half-year rule"). On a $75,000 machine, that's $11,250 in deductible depreciation in year one. At a 26% marginal corporate tax rate, that's roughly $2,925 in tax saved in year one alone. In year two, the pool is $75,000 - $11,250 = $63,750, and you claim 30% of that: $19,125 more in deductions.
This doesn't change the monthly payment math, but it meaningfully changes the after-tax cost of ownership. A machine that looks borderline on the pre-tax numbers often makes stronger sense when you fold in the CCA benefit. The CCA also applies whether you buy outright or finance — it's based on the asset cost, not whether you paid cash.
Leasing, by contrast, typically means the leasing company claims the CCA (they own the asset), and you deduct the lease payments as an operating expense. Which structure benefits you more depends on your tax situation — the answer isn't universal, which is why this is a question for your accountant.
Farm Credit Canada (FCC) serves agricultural businesses across Canada and offers equipment financing at competitive rates. If a significant portion of your skid steer or CTL use is agricultural — hog confinement cleaning, grain bin site work, feedlot clearing, irrigation installation, farm road maintenance — FCC is worth a call. Their rates are competitive with or better than bank equipment loans, and they understand equipment-secured lending for ag operations in a way that a bank branch manager in a prairie town often doesn't.
FCC doesn't finance purely construction businesses, but the line between ag-adjacent contractor and farmer who happens to do some contract work is blurry and often in your favour if you approach it correctly. Their office staff are generally straightforward about whether you qualify — worth a conversation before committing to higher-rate commercial financing.
A few things to watch for when reviewing any dealer-arranged financing package.
The balloon payment. Some dealer finance contracts structure 59 equal payments and then a final payment that's 2–5x larger. It's disclosed in the contract — but it's buried. The payment schedule summary page in the middle of the document, not the summary at the front. Read the full payment schedule before signing.
Residual not disclosed upfront. On a lease, the residual value (what you pay to buy the machine at lease end) should be disclosed at signing, in writing. If the finance manager is vague about the residual — "we'll figure that out at the end of the term" — that's a problem. The residual is a material term of the agreement. It must be in the contract.
Early termination penalties. Equipment leases in particular often carry substantial early termination fees — sometimes equal to all remaining payments. If you think you might sell the business, upgrade the machine, or change your business model before the term ends, understand what exit costs look like before you sign.
Looking for specific models available in Canada? Browse the skid steer attachment catalog for verified product pages on real models sold through Canadian dealers.