Canadian Equipment Financing – The Choice
OVERVIEW – Information on leasing assets in Canada. Asset Financing via a business leasing company is the perfect option for the Canadian business owner /manager .
The proverbial fork in the road
when it comes to asset financing is the choice between leasing those assets or a term loan. What then is the value to choosing the alternative of the leasing company in Canada as one of those choices?
One key advantage these days is simply the fact that actual interest rates are quite low, so the Canadian business owner / financial manager can spread the actual monthly payments over a term of 2- 7 years to achieve lower monthly cash outflows - while all the same time receiving the benefits of using those newly acquired assets to generate sales and profits.
While the leasing company in Canada always touts ' 100% financing ' we point out to clients though that typically a first and last month payment is often required, which may also simply be referred to as a down payment of the equivalent amount. Bottom line, with great rates and only a nominal ' down stroke ' it's still a pretty good deal.
Competition reigns supreme for the leasing company in Canada today. While that is not necessarily good for them it’s of course great for the Canadian corporation accessing this type of financing.
In Canada the market is segmented in a couple ways - thee are bank leasing firms, as well as commercial independent non bank firms, and coming up the road quickly are what is known as ' captive ' firms which are related to or owned by the manufacturer of your asset . As a general rule of thumb captive lease asset financing is always very attractive - the captives are incented to approve more product for their owners, and they have various scheme to incent you to acquire that product - financing being one of them!
Clients will often ask us if there is in fact anything wrong with leasing assets or the alternative, purchasing them. While we feel the advantages far outweigh the alternatives to lease finance we do point out some simply basics, one being that leasing is non cancellable so you are in fact committed to the full term of the lease you have signed up for .
Oh , and about that lease - here's where the industry gets very creative in offering a solution that makes sense - either from a lease to own, or a lease to use point of view . We're referring to capital leases and operating leases respectively, and the advantages of each are somewhat different. If we had to summarize the one difference between an operating lease and a capital lease it would be simply that you have more choice at the end of the term of the lease - your firm can purchase the asset, return it, extend the lease at a negotiated amount, or in many cases upgrade the asset and refinance. Technology financing, aka computers and telecom equipment is the best example of utilizing operating lease for the use of the asset, not their incredible ability to depreciate and become outdated! ‘What ... we're not buying computer desk tops anymore?’!
So how do you determine the best choices in dealing with a leasing company in Canada? Simple. Spend some time on the basics or alternatively seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you meet your asset acquisition needs.
CANADIAN ASSET FINANCING & LEASING EXPERTISE
Stan Prokop - founder of 7 Park Avenue Financial –
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/leasing_assets_leasing_company_asset_financing.html
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