Knowledge Centre

If you’re curious how someone makes ‘all the stuff’ we use each day, you should chat with Scotiabank’s Equipment Financing & Leasing team. Over many years, they’ve become experts on the machinery and technology that Canada’s factories, farmers, millers and miners need to produce every imaginable product.

While it’s fascinating to hear how ingenious companies produce everyday items – from making green garbage bags to injecting jelly into your favorite donut – these same companies look to Scotiabank for inventive financing structures. The Bank helps mitigate the risks of their capital expenditure perils, from volatile interest rates and foreign exchange environments to managing capital expenditure project dynamics. 

Flexible plans, for rapid response

Despite recent pandemic uncertainty, Canadian companies are clearly focused on investing in the right equipment to secure lucrative orders, increase production capacity and boost efficiencies. 

“The companies we deal with are very pro-active, and they’ve got solid ‘cap ex’ strategies in place,” observes Doug Reeve, Director and Group Lead, Equipment Financing and Leasing for Eastern Canada,  who serves diverse clients, from Quebec-based manufacturers, to Ontario agri-business, to ship-builders in the Atlantic provinces.  “These companies know that if they aren’t refreshing their equipment, they will fall behind and become uncompetitive.”

He points out that his colleagues don’t let clients forget about the issue either: 


“It’s part of being a good Commercial Banker, to regularly talk with clients about their capital expenditure budgets and what they might need to succeed, improve productivity and grow.”

Doug Reeve, Director and Group Lead, Equipment Financing and Leasing, Eastern Canada, Scotiabank

“I’ve seen companies become more sophisticated in managing their capital expenditures over the last 20 years,” adds Shane Bondy, Director and Group Lead, for Western Canada. “While they took a conservative approach in the early days of the pandemic, and postponed many expenditures, by fall 2020 their confidence returned and they began talking about their equipment needs again.”

“Many of these companies are now in a very positive position, with low interest rates, new business opportunities, and the chance to invest in equipment,” explains Hilary Thompson, Director and Group Lead, Greater Vancouver. She and Bondy are very familiar with the purchasing patterns of western companies, from construction and transport firms acquiring ‘bright yellow’ heavy equipment, to the many Indigenous and corporate partnerships sourcing equipment to launch northern infrastructure and resource projects.

Lately, the biggest problem for these growth-minded companies is finding the equipment they need, since many suppliers reduced their inventories in the pandemic, and supply chain slow-downs have delayed imported goods.  “A company that gets a new sales contract might have to scramble to find the right equipment, overcome ‘sticker shock’ at the price, or buy or lease used equipment to fill their production capacity gaps,” explains Reeve.

Fortunately, Scotiabank has experienced Equipment Finance Specialists who arrange and structure equipment finance lines of credit that mirror their clients’ capital expenditure budgets. And, they are product agnostic, so they can purchase whatever equipment is required, as their needs change or inventory becomes available. “Our clients know that they can make an offer on a piece of equipment, since we’ve put a credit facility in place in advance,” says Reeve. This flexibility includes credit for used equipment, or the ability to break up a borrowing contract into different ‘chunks’ with distinct terms and payment schedules.

Toolbox of tactics for a world of worries

Flexibility is important, even in non-pandemic times, since companies encounter a ‘world of worries’ when they acquire equipment for their businesses. There can be long lead times if, for example, a company pre-orders massive construction cranes or buys a slow-moving freight barge that needs to be towed from Asia. Often, interest or currency exchange rates shift by the time they must pay the invoice.  “This can significantly increase the cost of the equipment in the end, so we offer derivative products to help them manage their interest rate or ‘FX’ risks,” says Bondy.

“Scotiabank is quite unique, since we can bring our capital markets and corporate banking partners to build customized solutions,” adds Reeve. “While most equipment finance companies offer fairly ‘vanilla’ equipment financing products, we provide a lot of options to help clients mitigate their structural or executional risks.”

Thompson notes that busy companies don’t always realize these solutions, and advice, are available:


“Deciding if and when to invest in new equipment – particularly technology, which is constantly evolving – is not easy, so we can help them assess the likely return on that investment and the best way to finance it to benefit their business.”

Hilary Thompson, Director and Group Lead, Commercial Banking, Greater Vancouver, Scotiabank

This extends to the many other considerations that accompany equipment procurement, points out Bondy:


“Often people only think of the equipment itself, but they may struggle with the other expenses, such as site preparation, set-up and freight costs, which could be equal to the asset cost. They might assume they have to use cash for these expenses, but we can provide financing for many of those ‘soft costs,’ to help preserve their working capital, and deliver long term debt that matches their long-term investment.”

Shane Bondy, Director and Group Lead, Equipment Financing and Leasing, Western Canada, Scotiabank

Curiosity crafts custom solutions

It comes down to listening carefully, explains Bondy.  “We spend a lot of time delving into what the client’s business looks like, and what is most important to them. They might say they are concerned about rising rates, so we could split a contract into floating and fixed portions. Or, we could provide a flexible residual payment schedule if they think they may be able to pay down the loan sooner.” 


“We go into a client meeting with a very open mind, rather than an inflexible set of rules,” says Reeve, who points out that the Bank can often provide 100% financing, something which is not common among other major lenders. “We ask, ‘What do you think you need?’ and we can leverage their balance sheet and asset strength to create the right structure.”

Doug Reeve, Director and Group Lead, Equipment Financing and Leasing, Eastern Canada, Scotiabank

Thompson can rhyme off such transactions, including a loan to help an agricultural client purchase equipment, which incorporated seasonal payments that mirrored their stronger cash flow periods. She also recalls helping an industrial firm finance a M&A transaction, based partly on the value of the underlying equipment held by both the acquiring and target companies: “If a company is buying another with a large equipment component, there are ways we could help them access more capital, by leveraging those often, under-appreciated assets.”

The team’s curiosity extends to the equipment itself, and the opportunities it creates for clients. For example, Thompson marvels at a recent deal to help a shipping company finance simulation equipment to train its crews. Meanwhile, Reeve remembers the first 3D printer he financed 15 years ago, which was the size of a jumbo refrigerator and had a six-figure price tag. Today, he’s talking to clients about portable, affordable 3D printers to help them efficiently fulfil short run or customized orders.

Bondy’s eyes light up when he describes a massive digital scoreboard he helped a major arena acquire – and the pride he felt when his sons saw the equipment at an NHL game:


“It’s exciting to help clients acquire all the big stuff that makes them more successful.  They trust that we know their business and their equipment, that we know how to structure it, and we have great execution to help put their project in production.”

Shane Bondy, Director and Group Lead, Equipment Financing and Leasing, Western Canada, Scotiabank