Canadian Equipment Financing Rate Disparity

At the present time, there is quite a rate disparity among Canadian equipment financing, specifically the “A”lending rates between bank loans and leasing company leases.

Right now, the financing rates for leases are in many cases double the rate for loans for the amounts under $250,000.

The biggest single reason for this is that the smaller lease companies that service this segment of the market have, on average, higher buy rates right now then they did a year ago.  Banks tend to keep their rates lower to attract overall customer accounts and as a result they also tend to be more selective in issuing the cheaper credit.