Are Used Equipment Leasing and Financing Loans Good For Your Company ?

A New Trend ! ? Used Equipt. Finance Continues To Be Popular

OVERVIEW – Information on the benefits, and risks of used equipment leasing and financing in Canada . Asset loans on previously owned equipment just might make sense !



Yes you can. Simple as that. Whats that ..? .... Just that unknown to many business owners and financial managers is the fact that many assets they choose to purchase can in fact be financed if they are ' used’, or pre -owned.

Safe to say there are some issues, which we will hopefully cover off, but the reality is, whether its bridge loans solutions, or financing under the general category of equipment lease.. you can finance previously owned assets.

Part of the challenge of the finance of a used asset is simply that some firms actually thrive on and understand the functions of this type of deal, and some, by policy or otherwise (inexperience, etc) do not.

Part of the issue revolves around whether the financing is approved on the basis of your overall financial condition, or, if in fact that plays a secondary role to the actual value of the asset. We suppose if you are a lender the best of each world would apply, but it doesn’t always work out like that!

In some cases the actual rate and structure of your transaction might look a little different if you are financing a used asset. That might mean, for example, a shorter lease term, a down payment, or a higher interest rate, all of which might reflect your lessor or lenders overall view of the transaction .

Using technology

as an example it is very achievable to do a sale leaseback on your tech and computer assets. However, safe to say that market values will no doubt reflect a shorter term in your lease or loan.

In recent years an interesting phenomenon has take place in Canada, as various traditional auction and appraisal firms got into the finance business. Why? Simply because they are very able to recognize the true value of a marketable asset, including finding the right end user if things go wrong. Also the emergence of the internet allows many finance firms to continually test the value of certain assets they finance in their portfolios. That’s a good thing. At least for them.

In financing used equipment under leases or loans you should well expect to have an asset appraised in some manner. It might be a simple ' desk appraisal ' - that being done by your finance or lease company at their premises via research. In certain other instances fully expect to bear the cost of a third party independent appraisal to validate the condition and market value of the asset.

One challenge that sometimes arises in used equipment financing is that you have either sourced the asset in a different country (certainly quite common in the Canada / U.S. scenario), and perhaps further complicated by the fact that it’s a private sale. By that is meant that you are buying it from another firm or actual user, not a dealer, distributor, retailer, etc. If clear title can be proven you should be in a good position to still obtain the financing you need for the asset, but a caution that it’s certainly not a guarantee.

Clearly you can protect yourself in a number of ways, including actually visiting and inspecting the asset, insuring it, providing only a down payment, or insisting on some sort of final acceptance criteria .

You also will want to enter into either a capital lease or an operating lease that adequately reflects the remaining useful life of the asset.

Our bottom line? Simply that used equipment and assets in many categories can be financed under the right circumstances. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your used asset finance needs.

7 PARK AVENUE FINANCIAL
CANADIAN EQUIPMENT LEASING AND FINANCING 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 10 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/used-equipment-leasing-financing-loans.html



7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com














Stan Prokop