Getting Strategic With Asset Acquisitions – Utilizing Equipment Financing Correctly
OVERVIEW – Information of the business owners ability to source effective equipment leasing options in Canada that make sense for long term growth and success
Equipment leasing in Canada gives business owners/financial mgrs the ability to ' get strategic' around their asset financing needs. The ability to utilize lease financing strategically allows your business to successfully manage growth as it relates to acquiring the assets you need. Let's dig in.
We're constantly amazed (and it never stops) around clients who only focus on the ' interest rate ' as their sole concern when it comes to equipment finance. While that may be beneficial to lessors who market ' low rates' the reality is there is a lot more going on even in a very ' standard' lease transaction.
Even miscellaneous fees not part of the ' interest rate' can drive up your total cost. Many businesses miss the ' true cost ' when they don’t factor in down payments, advance payments (i.e. first and last) etc. Having said that no one disputes the fact that today’s low rates are an attractive part of the asset finance decision.
Issues you need to look at and understand include the timing of cash flows, what happens at the end of the lease (spoiler alert - it can be a surprise!), as well as your ownership options and the ability to return assets, cancel the lease (you can’t) or buy out the asset early.
Having warned you about some of the important technicalities of leasing in Canada why do thousands of firms (almost 80% of business some stats say) gravitate to lease finance. As we said they in many cases feel somewhat ' cash strapped' when it comes to both running and growing their business.
While most of the major Canadian chartered banks participate in leasing finance in some manner issues such as tying up your bank credit facilities or meeting stricter bank approval criteria always become daunting issues to consider commercial finance firms who offer or specialize in asset financing. In some cases that might even mean a ' term loan' when a lease might not make sense.
We also encourage business owners/mgrs to perform at least a rudimentary, if not full blown ' lease vs. buy ' analysis to make sure they are in fact making the right asset acquisition choice. Quite often leasing' wins' simply because it's associated with ' ease of acquisition' given that your lease company pays the supplier and in many cases can include items such as delivery, install, warranty, add on’s, etc.
Investing in and expanding in your business is a win/win scenario when lease financing is used effectively. Seek out and speak to a trusted, credible and experienced Canadian business finance advisor who can ensure your asset finance option is the correct one.
Documentation is key when entering into a lease. Over the long term it might make sense to work with on commercial lease company with whose terms your firm is familiar and comfortable with.
In years past many firms, large and small gravitated toward ' operating leases' versus the traditional ' lease to own’ capital lease. While operating leases have lost some of their luster due to worldwide accounting rule changes they still offer a ton of flexibility around lower pricing, shorter terms, and the ability to simply return the asset or even upgrade it. The necessity to spend some time around thinking about how long your firm will use the asset is critical - that will affect monthly payments, lease structure, and cash outflows.
If your firm is focused on asset finance success solutions seek out and speak to a trusted, credible and experienced Canadian Business Financing advisor who can assist you with asset financing solutions that make sense for your company.
7 PARK AVENUE FINANCIAL = CANADIAN EQUIPMENT LEASE FINANCE EXPERTISE
Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Office = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
' Canadian Business Financing with the intelligent use of experience '
ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
Stan Prokop
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Office = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
' Canadian Business Financing with the intelligent use of experience '
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
Stan Prokop
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