Equipment financing in Canada vs. the USA
Published
Equipment financing works in broadly similar ways on both sides of the border, but the legal framework, tax rules and lender landscape differ. This overview is general. Always confirm specifics with your lender, lawyer and accountant.
Security registration
Lenders protect their interest by registering a security interest. In Canada this is done under each province’s personal property security legislation (Quebec has its own civil-law regime). In the USA it is generally done under Article 9 of the Uniform Commercial Code. Cross-border equipment may need registrations in more than one jurisdiction.
Tax and accounting
Tax treatment of leases and loans, including depreciation and any available deductions, differs between the two countries and can change. Do not assume a structure that works in one country will work in the other.
Credit reporting
Lenders pull different bureaus and use different scoring models in each country. A strong history in one country may not carry over automatically to the other.
Lenders and programs
Some lenders operate in both countries. Many serve only one. Check the countries served on each lender profile, and ask whether a cross-border purchase or a US subsidiary affects eligibility.
Currency
Where the equipment is priced in a different currency from your revenue, ask the lender which currency the financing is in, and consider the exchange risk.