How To Get A Business Loan With a Bad Credit Score?

Ontario, Alberta, Saskatchewan and Manitoba all require an owner to pay a contractor's proper invoice within 28 days, or to dispute it in writing within 14 days. Once paid, a contractor has 7 days to pay its subcontractors. The provinces differ on holdback, lien deadlines and which projects are covered: Manitoba's holdback is 7.5% while the others hold back 10%, and Saskatchewan's lien period is still 40 days while the others allow 60.

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These rules are known as prompt payment legislation. They set a clock on construction payments that starts when a contractor delivers a proper invoice, and they give unpaid parties a fast dispute process called adjudication. Each province built its own version, so a contractor working across provincial lines faces different deadlines on each job.

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This guide compares the rules in each province, explains what they mean for a contractor's cash flow, and sets out what to do when a payment is late. It is general information, not legal advice. Check your contract and the current statute, or speak with a construction lawyer, before acting on a specific dispute.

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Prompt payment rules by province at a glance

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Ontario, Saskatchewan and Manitoba apply prompt payment to contracts entered into on or after the in-force date. Alberta also required contracts already in place to comply by August 29, 2024. Alberta's column covers private projects. Contracts with the Government of Alberta follow separate rules, explained below.

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Prompt payment in other jurisdictions

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What these rules mean for a contractor's cash flow

Prompt payment shortens the wait for most of a contractor's money, but it does not remove the wait. Three gaps remain even when every party follows the rules.

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The billing cycle. Proper invoices are usually issued monthly, and Alberta requires one at least every 31 days. Work done early in a billing period is not invoiced until the period ends, and the owner then has 28 days to pay. Materials bought on day one can go unpaid for close to two months.

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The holdback. On a $200,000 contract in Ontario, Alberta or Saskatchewan, the owner retains $20,000. In Manitoba the holdback on the same contract is $15,000. On most projects that money is released only after the lien period expires near completion. Ontario now requires annual release on all contracts, and Alberta requires annual or phased release on contracts over $10 million that run longer than a year.

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Payment down the chain. A subcontractor's 7-day clock starts when the contractor is paid. If the owner pays on day 28, the subcontractor may wait 35 days from the contractor's invoice. In Ontario, Saskatchewan and Manitoba, if the owner does not pay at all, the contractor must still pay its subcontractors by day 35 after it invoiced the owner, unless it gives them a notice of non-payment.

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Meanwhile payroll, equipment rentals and supplier accounts run on their own schedules, often weekly or within 30 days. A busy contractor can be profitable on every job and still be short of cash between invoices. Planning for that gap is part of bidding a job, not an afterthought.

Province-by-province details

Ontario

Ontario's Construction Act introduced prompt payment on October 1, 2019, for public, private and alternative financing and procurement contracts. Amendments in force since January 1, 2026, make an invoice proper unless the owner gives written notice of a deficiency within 7 days.

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The 2026 amendments also require holdback to be released every year. Within 14 days after each contract anniversary, the owner must publish a notice of annual holdback release, then pay the accrued holdback between 60 and 74 days after publication, provided no lien remains undischarged. For contracts entered into before January 1, 2026, annual release begins on the second anniversary after that date. Disputes go to adjudication through the Ontario Dispute Adjudication for Construction Contracts (ODACC), and parties can now also retain private adjudicators qualified by ODACC.

Alberta

Alberta's Prompt Payment and Construction Lien Act has applied to private projects since August 29, 2022. Alberta allows 90 days to register a lien for the supply of ready-mix concrete and for oil or gas well work, longer than the general 60. Late payments carry interest at the contract rate, or the rate in the Judgment Interest Regulation if the contract sets none.

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Contracts with the Government of Alberta entered into on or after April 1, 2025, follow a separate prompt payment process under the Public Works Act. The Crown must pay an undisputed proper invoice within 28 days. Contractors must pay subcontractors within 35 days of receiving the subcontractor's proper invoice, and subcontractors pay their own subcontractors within 42 days. Payment disputes can go to adjudication up to the Court of Justice's monetary limit, currently $200,000. Capital asset upkeep contracts and special scope contracts, where the contractor provides financing, are excluded.

Saskatchewan

Saskatchewan added prompt payment to The Builders' Lien Act on March 1, 2022, for contracts entered into on or after that date. The Act binds the Crown, with exclusions such as highway work, and mining and certain power contracts are exempt. Saskatchewan's lien period is 40 clear days after the triggering event, such as completion or abandonment, which makes it the shortest of the four provinces. Adjudication runs through the Saskatchewan Construction Dispute Resolution Office (SCDRO).

Manitoba

Manitoba's prompt payment rules took effect April 1, 2025, and apply only to contracts entered into on or after that date. The same amendments raised the lien period from 40 to 60 days. Manitoba's holdback is 7.5%, retained for at least 60 days after substantial performance or completion. The Act binds the Crown but excludes Manitoba Hydro contracts for generating stations and related plant, and work under contracts governed by The Infrastructure Contracts Disbursement Act, which include certain provincial highway contracts. Architects' and engineers' fees are also exempt from prompt payment.

What to do when a payment is late

The prompt payment process gives a contractor several remedies short of court. Work through them in parallel, because the lien deadline keeps running while you pursue the others.

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1. Confirm your invoice was proper. The 28-day clock only starts on a proper invoice, which must include the details the statute lists, such as the invoice date, the work period, the amount and payment terms. In Ontario, an owner who finds a deficiency must now say so within 7 days.
2. Check for a notice of non-payment. If the owner disputes the invoice, it must give written notice within 14 days stating the amount withheld and why. Any undisputed amount is still due within 28 days.
3. Track interest. Unpaid amounts accrue interest in all four provinces. Saskatchewan and Manitoba use the prejudgment rate, or the contract rate if higher. Alberta uses the contract rate, or the Judgment Interest Regulation rate if the contract sets none.
4. Start adjudication. For a disputed amount, a contractor can refer the dispute to the province's adjudication body. Adjudication is designed to resolve payment disputes faster than court, and the decision must be followed unless a court or arbitrator later decides otherwise.
5. Protect your lien rights. Register a lien within the provincial period (60 days in Ontario, Alberta and Manitoba; 40 clear days in Saskatchewan) or lose the right. Ontario extends the lien period in some cases where adjudication has started, but get legal advice before relying on an extension.

Covering costs while you wait to be paid

Prompt payment sets a deadline, but contractors still carry materials, payroll and holdback for weeks on every project. Before bidding, map when each invoice will be paid and when each major cost falls due. Negotiate deposits or mobilization payments where you can, and invoice on the first day the contract allows.

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When the gap is still too wide, working capital can bridge it. A merchant cash advance from 2M7 Financial Solutions provides funding based on a business's revenue, with no collateral required, and repayment can be set as a percentage of sales. 

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See how contractors use it on the construction funding page or see what options fit your project schedule.

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Frequently asked questions

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How long does an owner have to pay a contractor in Ontario?

An Ontario owner must pay a contractor's proper invoice within 28 days of receiving it, unless it gives a notice of non-payment within 14 days. Undisputed amounts are still due within 28 days.

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Does Alberta have prompt payment legislation?

Yes. Alberta's Prompt Payment and Construction Lien Act has applied to private projects since August 29, 2022, and owners have 28 calendar days to pay a proper invoice. Contracts with the Government of Alberta entered into on or after April 1, 2025, follow a separate prompt payment process under the Public Works Act.

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Does British Columbia have prompt payment legislation?

BC's Construction Prompt Payment Act received royal assent on November 27, 2025, but is not yet in force. Once in force, owners will have 28 days to pay a proper invoice.

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What is the holdback percentage in each province?

The holdback is 10% in Ontario, Alberta and Saskatchewan, and 7.5% in Manitoba.

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How long do I have to register a construction lien?

The lien period is 60 days in Ontario, Alberta and Manitoba, and 40 clear days in Saskatchewan. Alberta allows 90 days for the supply of ready-mix concrete and for oil or gas well work.

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How fast must a contractor pay its subcontractors?

In Ontario, Alberta, Saskatchewan and Manitoba, a contractor must pay its subcontractors within 7 days of receiving payment from the owner, unless it gives a notice of non-payment. In Ontario, Saskatchewan and Manitoba, a contractor that has not been paid must still pay its subcontractors by day 35 after invoicing the owner, unless it gives a notice of non-payment.

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What is construction adjudication?

Adjudication is a fast dispute process for construction payment disputes, run by a provincial body such as ODACC in Ontario. The adjudicator's decision is binding on an interim basis, which means it must be followed unless a court or arbitrator later decides otherwise.

Sources

Checked October 13, 2026.

• Ontario Construction Act, R.S.O. 1990, c. C.30
• Ontario Ministry of Transportation: Prompt Payment Administration Manual
• Ontario Bar Association: Key 2026 amendments (January 15, 2026)
• Osler: Ontario Construction Act amendments now in effect (March 2, 2026)
• Canadian Bar Association: Changes to the Ontario Construction Act
• Ontario Dispute Adjudication for Construction Contracts (ODACC)
• Government of Alberta: Prompt payment rules for the construction industry
• Government of Alberta: Extending prompt payment to the Public Works Act (May 15, 2025)
• Alberta Land Titles: Construction lien checklist
• Bennett Jones: Prompt payment legislation in Alberta
• McMillan: Alberta's Prompt Payment and Construction Lien Act (August 30, 2022)
• Saskatchewan: The Builders' Lien Act (consolidated)
• Saskatchewan: The Builders' Lien (Prompt Payment) Amendment Act, 2019
• Manitoba: The Builders' Liens Act, C.C.S.M. c. B91
• Manitoba Prompt Payment Adjudication Authority
• Federal Prompt Payment for Construction Work Act, S.C. 2019, c. 29, s. 387
• Order Designating Provinces Under Subsection 6(1) of the Federal Prompt Payment for Construction Work Act
• Government of British Columbia: Prompt payment legislation (updated August 20, 2026)
• McCarthy Tétrault: Québec adopts prompt payment regulation (September 8, 2025)
• Osler: Canadian prompt payment and construction law reforms (updated March 30, 2026)

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You’ve done your research, and you’re convinced a merchant cash advance is a great opportunity for your business. You can get a flexible funding solution to help you cover essential business costs or even expansion. Better yet, you can quickly access the funds you need with flexible repayment terms. So, how do you get an MCA? Follow these steps and you’ll have the funding you need in no time.

Research Providers

Doing research should be your first step. There are plenty of lenders offering MCAs, but not all of them are created equal. Many of them do business online. This makes it easy to find information about where they operate and the kinds of businesses they support. Some specialize in working with small businesses, while others prefer working with large businesses. Some may have expertise in your industry. Always look for a provider who is upfront about their MCA program. Check customer reviews and testimonials. What do other business owners say about this lender?

Submit an Application

Once you’ve decided on a provider, it’s time to prepare your MCA application. Always review the lender’s specific requirements. The more complete and accurate your application, the faster the lender can approve you. You’ll need to provide:

• Government-issued ID, to prove your identity
• Your merchant ID number
• Recent bank statements
• A void cheque

Your merchant ID number allows the lender to check on your merchant account, giving them accurate information on your monthly sales. Your recent bank statements can also provide this information, as well as crucial information about cash flows. You’ll also need to provide a bank account number for your business. The business bank account is where your merchant cash advance will be deposited.

The Approval Process

The lender will approve your application within two business days. If your application is complete and accurate, the funds may arrive on within the same day. Always check what the lender will provide. Some lenders will offer up to 125 percent of your monthly sales. Next, they’ll send you an agreement. Read this over carefully, since it contains information about your repayment schedule, fees, and more. Some lenders post their general terms, including rates and fees, online. You can review them before you apply. If you’re unsure about the lender’s offer, don’t be afraid to contact them. For example, if you were hoping for more funds than they offered, you can discuss their rationale with them. Once you’re satisfied with the lender’s terms, your funds will be transferred to your bank account.

How Repayment Works

Your merchant cash advance provider should get in touch with your payments processor. They’ll set up direct deductions, which means repayment of your advance happens automatically. You can keep track of payments through your account with the provider. This makes the process perfectly transparent, and you’ll always know where you stand.

Get the Funds You Need Now

Ready to get a merchant cash advance for your business? You can get in touch with the experts for a free quote or apply now. The funds you need could be just a few clicks away.

Restaurant equipment financing lets a restaurant pay for ovens, refrigeration, hoods, dishwashers and POS systems over time instead of in one payment. Canadian restaurants have six main routes: leasing, vendor financing, bank or specialist equipment financing, BDC, the Canada Small Business Financing Program, and a merchant cash advance.

The right one depends on four things: how long the restaurant has been operating, its credit history, how quickly the equipment is needed, and whether the equipment is new or used. A planned kitchen upgrade gives you time to compare offers. An emergency replacement does not.

Restaurant margins leave little room for the wrong choice. Statistics Canada reports that food services and drinking places earned a 4.1% operating profit margin in 2024. Cost of goods sold took 35.9% of expenses, and salaries, wages and benefits took another 33.6%. A walk-in cooler that fails in July has to be paid for out of what is left.

This guide explains how each option works, what each provider looks at, what each costs, and where each one fits.

Your restaurant equipment financing options compared

These routes overlap. A dealer may arrange its financing through a bank or a specialist, and BDC is itself an equipment financing provider. The table separates the routes you will meet when you shop.

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Need to replace equipment and keep your operating cash intact? See 2M7's restaurant equipment and operations funding, including who qualifies and how payments work.

How much does restaurant equipment financing cost?

There is no single rate for restaurant equipment financing in Canada. Your quote depends on the provider, your restaurant's finances, the equipment, the amount and the length of the agreement.

To compare offers fairly, ask every provider the same six questions about the same purchase:

1. How much cash do I pay up front, including any deposit or down payment?
2. What is each payment, and how often is it collected?
3. What is the total I will pay, including all financing charges and fees?
4. Is there a final payment or a buyout before I own the equipment?
5. What happens if I pay the balance early?
6. Do the payments change if my sales fall?

A longer term lowers each payment and raises the total you pay. A low lease payment can also leave out the buyout you need to take ownership.

The CSBFP is the one route with a published ceiling. The maximum floating rate is the lender's prime rate plus 3%, and the maximum fixed rate is the lender's single-family residential mortgage rate plus 3%. The registration fee is 2% of the loan. These are limits, and your own quote may be lower.

A merchant cash advance carries no interest rate, but it does carry a cost. Ask for the dollar amount you will receive and the dollar amount you will repay, in writing, before you decide.

Restaurant equipment leasing

Restaurant equipment leasing lets you use equipment for a fixed term in exchange for regular payments, without buying it at the start. Many leases include an option to purchase the equipment when the term ends.

BDC's guidance is that leasing suits equipment with a shorter lifespan or equipment that needs frequent updating, while buying suits equipment that will last. In a restaurant, that points to leasing for POS hardware and other technology, and to buying for ranges, hoods and walk-in coolers that stay in service for years.

Before you sign a lease, ask four questions. Who pays for maintenance? Can you swap the equipment during the term? What does the end-of-term buyout cost? What happens if the restaurant moves or closes?

Leasing also changes how the cost is treated at tax time. The Canada Revenue Agency lets a business deduct the lease payments incurred in the year for property used in the business. If the leased property has a total fair market value above $25,000, you and the lessor can jointly elect to treat the lease as a purchase. You would then deduct the interest portion and claim capital cost allowance on the equipment. Ask your accountant which treatment fits your restaurant.

What a lessor looks at: the equipment itself, the length of the term, and your restaurant's ability to make the payments.

Vendor and dealer financing

Vendor financing means the company selling the equipment also arranges the financing. BDC describes it as financing provided through a manufacturer's financing division or a partner financial institution.

The appeal is convenience. You choose the equipment and arrange payment in the same conversation, and BDC notes that vendor financing is fast and carries lower upfront costs.

The trade-off is flexibility. BDC describes vendor financing as shorter term and less flexible than a traditional term loan. Before you sign, compare the total you will pay against at least one other option on this page.

Ask for the equipment's cash price separately from the financing offer, so you can see what the financing itself costs. Choose the equipment first, on the model, warranty and servicing your kitchen needs. A supplier's financing offer should not decide what you buy.

What a vendor looks at: this varies by dealer and by the financing partner behind it. Ask who the actual financing provider is and what happens if you want to pay the balance early.

Bank and specialist equipment financing

Banks and specialist equipment financing companies fund the purchase of business equipment and assess both the business and the asset. According to BDC, the equipment is used as collateral most of the time, and the repayment period is matched to the equipment's lifespan.

This route suits an established restaurant buying equipment that will last. The paperwork is heavier than with a vendor. BDC lists what equipment financing providers commonly ask for:

• Financial statements for the past two years
• A monthly cash flow forecast for the rest of the current year and the following 12 months
• Background on the company, its operations and its management
• An explanation of how the equipment will increase sales, profitability or efficiency

Requirements vary with the provider and the size of the request. Ask whether the offer covers delivery and installation. Financing that covers only the equipment can leave a cash gap before the kitchen can use it.

What a bank or specialist looks at: the restaurant's financial history, its forecast, and the resale value of the equipment.

BDC equipment financing

The Business Development Bank of Canada offers an Equipment Loan for new or used equipment. Its terms are among the longest available to a Canadian restaurant:

• Financing of up to 125% of the purchase price, which leaves room for shipping and installation
• Repayment over up to 12 years
• The option to postpone capital payments for up to 24 months at the start

Eligibility is the constraint. BDC requires the business to be based in Canada, to have generated revenue for at least 12 months, and to have a good credit track record.

Postponing capital payments delays the principal. It does not remove the cost of financing, so check what the payment becomes once principal repayment starts.

What BDC looks at: revenue history of 12 months or more, and credit record. A restaurant that opened this year, or one with damaged credit, will need a different route.

Canada Small Business Financing Program

The Canada Small Business Financing Program (CSBFP) is a federal program that shares the risk of a loan with the financial institution that makes it. You apply through a bank or credit union, and that institution alone decides whether to approve the loan. Most start-ups and existing small businesses with gross revenues of $10 million or less can apply.

The program allows a business to borrow up to $1.15 million: a maximum of $1 million in term loans and $150,000 in lines of credit. Term loans can pay for new or used equipment.

The full $1 million is not available for kitchen equipment alone. The program sets a lower limit for equipment and leasehold improvements, so confirm the current figure with your financial institution before you plan a purchase around it.

The program also caps the cost. The maximum floating rate is the lender's prime rate plus 3%, and there is a registration fee of 2% of the loan.

Restaurants use this program more than any other sector. In 2024-25, accommodation and food services received $900.9 million, or 47.8% of the total value of CSBFP loans. Equipment loans made up 18.6% of the total.

What the financial institution looks at: the same things it would for any business loan, including financial statements, forecasts and credit history. The program reduces the institution's risk. It does not remove its approval process, so allow time for it.

Financing used restaurant equipment

Used restaurant equipment can be financed. BDC's Equipment Loan and CSBFP term loans both cover new or used equipment, and other providers set their own rules.

A used range or dishwasher costs less up front, which shrinks the amount you need to finance. It also gives a financing provider less security, because older equipment is worth less if it has to be resold.

Before you pay a deposit on a used purchase, ask each provider four questions:

1. Is there a limit on the age or condition of the equipment you will finance?
2. Do you need an appraisal, an inspection report or proof of ownership?
3. Will you finance a purchase from a private seller or an auction, or only from a dealer?
4. Are delivery, installation and any repairs included?

Compare the installed cost of the used unit against a new one, including warranty and servicing. A lower price helps less if the unit breaks down soon after it goes in.

If the answers rule out conventional financing, a merchant cash advance is one way to fund a used purchase, because the funding is based on your sales and not on the equipment.

Restaurant equipment financing with bad credit

Bad credit narrows your options without closing all of them. BDC notes that there is no specific credit score needed to get a business loan, and that financing can still be obtained with a suboptimal score when other factors, such as projections and collateral, are strong.

In practice, a weak credit history makes bank-delivered options harder to secure and pushes restaurants toward providers that weigh revenue more heavily. 2M7 bases approval on recent sales activity, and credit score is one factor among several.

For a full comparison of what each provider checks and what each option costs, read Bad Credit Equipment Financing in Canada.

Financing equipment for a new restaurant

A restaurant that has not opened yet, or has just opened, has fewer options because it has no revenue history to show.

Without revenue history, a provider relies on your business plan, your forecast and your personal credit. Have all three ready before you approach a lessor, a vendor or a bank.

When a merchant cash advance makes sense for restaurant equipment, and when it does not

A merchant cash advance is an advance on your restaurant's future sales. You receive a lump sum and repay it from revenue, with the total cost set before you sign. It is not secured against the equipment.

It has no interest rate, but it has a cost: a fixed amount set at the start. Compare that cost against the sales you lose each day the kitchen is down.

It makes sense when:

• The equipment has failed and the kitchen cannot run without it. A dead walk-in cooler or range costs you sales every day it is out, and a bank process measured in weeks does not help.
• The cost is a repair, an installation or a compliance fix. Conventional equipment financing is built around buying an asset, and these costs do not always qualify.
• You are buying used equipment from a private seller or an auction that an equipment financing provider will not fund.
• Your credit history or time in business rules out BDC and bank options, but your sales are steady.

It does not make sense when:

• The purchase is large, planned and long-lived. If you qualify for a BDC Equipment Loan or a CSBFP loan and can wait for approval, a term of up to 12 years will usually cost less than a merchant cash advance.
• Sales are too thin to carry the repayments. Funding tied to revenue only works if the revenue is there.
• The restaurant has been open less than 3 months or brings in under $15,000 a month. It will not qualify with 2M7.

The practical test is whether your restaurant can carry the repayments and still cover food, wages and rent. Run the numbers against a slow month, not your busiest one.

How to prepare before applying

Having the right documents ready shortens every one of these processes. What you need depends on the route.

For leasing, vendor financing, specialist financing, BDC or the CSBFP:

• A written quote or purchase agreement for the equipment
• Financial statements for the past two years
• A monthly cash flow forecast
• A short explanation of what the equipment will do for the restaurant: more covers, lower energy bills, fewer breakdowns
• Your premises lease, since a provider may want to know how long you can stay at the location

For a merchant cash advance from 2M7:

• Three months of business bank statements
• Photo ID
• A void cheque

Get two quotes for the equipment before you apply anywhere. A lower purchase price reduces the amount you finance under every option.

Then budget for the whole project: the equipment, delivery, installation and removal of the old unit.

How 2M7 funding works for restaurant equipment

2M7 Financial Solutions is a direct funder that provides merchant cash advances of $5,000 to $300,000 to Canadian businesses. Restaurants use the funding for ranges, walk-in coolers, POS systems, dining room furniture and compliance repairs.

To qualify, your restaurant needs to:

• Be located in Canada
• Have been operating for at least 3 months
• Bring in at least $15,000 a month in revenue
• Have no open bankruptcies

Meeting these minimums does not guarantee approval. 2M7 reviews each application.

Approval takes one business day, and funds arrive in your account within 24 hours of approval. No collateral is required.

You see the total cost before you sign. There is no interest, and there is no penalty for paying early. You choose between two repayment structures. Flex payments move with your daily card sales. Fixed payments stay the same unless you call 2M7 to request a lower amount when revenue drops.

2M7 has funded more than 5,000 small businesses and issued more than $650 million since 2008.

See how this applies to your kitchen on the restaurant equipment and operations funding page, or check if you qualify.

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Frequently asked questions

What is restaurant equipment financing?

Restaurant equipment financing is any arrangement that lets a restaurant pay for kitchen, bar or front-of-house equipment over time. In Canada the main forms are leasing, vendor financing, bank or specialist equipment financing, a BDC Equipment Loan, a CSBFP loan and a merchant cash advance.

How much does restaurant equipment financing cost?

There is no single rate. Ask each provider for the upfront cash, the payment amount, the total you will repay and any buyout. Under the CSBFP, the floating rate cannot exceed the lender's prime rate plus 3%, and there is a 2% registration fee.

Is it better to lease or buy restaurant equipment?

Lease equipment you expect to replace or upgrade, such as POS hardware. Buy equipment that will stay in service for years, such as ranges and walk-in coolers. Check who pays for maintenance and what the buyout costs before you sign a lease.

Can I finance used restaurant equipment in Canada?

Yes. BDC's Equipment Loan and CSBFP term loans both cover new or used equipment. Other providers set their own limits on age, condition and seller, so ask before you pay a deposit.

Can I get restaurant equipment financing with bad credit?

Yes, though the options narrow. BDC notes that no specific credit score is required for a business loan. Providers that base approval on revenue, including 2M7, can fund restaurants that a bank would decline.

Can a new restaurant get equipment financing?

A restaurant with no revenue history can apply for leasing, vendor financing or a CSBFP loan, which is open to most start-ups. BDC's Equipment Loan requires 12 months of revenue. 2M7 requires 3 months in operation and $15,000 in monthly revenue.

Does the CSBFP provide $1 million for kitchen equipment?

No. The program allows up to $1 million in term loans, but a lower limit applies to equipment and leasehold improvements. Your financial institution decides the amount it will approve.

How long can I take to repay a BDC Equipment Loan?

Up to 12 years. BDC also allows capital payments to be postponed for up to 24 months at the start of the loan.

Are restaurant equipment lease payments tax deductible?

The Canada Revenue Agency lets a business deduct lease payments incurred in the year for property used in the business. Confirm how this applies to your restaurant with your accountant.

How fast can I get funding to replace broken kitchen equipment?

It depends on the route. 2M7 approves applications within one business day and deposits funds within 24 hours of approval. Bank-delivered options take longer because they require financial statements and forecasts.

Does a merchant cash advance have a cost?

Yes. It carries a fixed cost of capital in place of an interest rate. Compare the amount you receive, the total you repay and how often payments are collected before you accept an offer.

What documents do I need to apply?

For most equipment financing: an equipment quote, financial statements and a cash flow forecast. For a merchant cash advance from 2M7: three months of bank statements, photo ID and a void cheque.

Choosing the right option

Start with how much time you have. If the purchase is planned and your restaurant has at least 12 months of revenue and sound credit, begin with BDC or a CSBFP loan through your bank. The terms are the longest available.

If you are buying from a dealer and want one conversation, ask for the vendor's financing terms and compare the total cost against a second option.

If the equipment has already failed, your credit is damaged, or your restaurant is too new for BDC, look at funding that is based on your sales. Check if your restaurant qualifies with 2M7.

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