Tweet
Why Equipment Financing Is More Popular Than Ever
Information on the benefits of equipment financing and leasing new and used assets for growing a business . Exploring the cash flow benefits to a successful lease finance strategy
Yours customers have heard the news - you have invested in new assets to better serve their needs and demonstrate your firms long term commitment to their business. That’s a clear, however intangible, benefit of equipment financing leasing in Canada.
The ability to increase production or streamline your business processes is often served by asset acquisition - acquiring those assets via a lease financing option is clearly the smart thing to do .
Competition is heating up everywhere, locally, nationally, and of course globally. That’s why your ability to invest in new assets such as production equipment, computer technology, business equipment, etc will put you at the top of the pile when it comes to today’s highly competitive environment.
Investing is always a long term strategy, so it is necessary to finance long term assets with a finance strategy such as equipment financing leasing - you are matching the long term benefits you will achieve through the assets with a same long term financing strategy. Your accountant calls that ' matching means to your needs ' - Intuitively to you as a business owner it’s simply cash flow 101!
It clearly does not make sense to any Canadian business owner or financial manager to pay cash and deplete cash flow and working capital resources and then to only receive the benefits of that cash outlay over a longer period of time.
Many of the production assets that we see clients acquire come from either the U.S, Europe, and in some cases even Asia. The 2010 strong Canadian dollar lends itself to strong buying power based on the currency and the willingness of the foreign suppliers to make sales.
When we thing of shop floor and production equipment we think of long term assets that will have a very useful economic life - in many cases they will even hold a residual value many years ago . But then... theres computer and technology. Those assets cost a lot, depreciate quickly, and as they become more and more productive that is offset by the need to constantly upgrade - think servers, pc's, laptops. Etc.
Once again, equipment financing leasing to the rescue! Your ability to upgrade, replace, or extend current leasing of technologies is enhanced by a lease financing option. And think of those cash flow advantages. We pity the poor Chief Information Officer at medium sized and larger firms that constantly must wrestle with capital expenditures in such large and constant amounts.
We all here about ' crunching the numbers ' - in leasing, with the aid of a financial calculator you can very quickly identify budgeted amounts and cash outflows. There are only 5 simple parts of an equipment lease calculation- the term of the lease, the interest rate, the value of the equipment, the end purchase option, and of course the payment . Knowing any 4 of those allows you to quickly calculate the final remaining piece of the puzzle in your budgeting scenarios.
One of the greatest financiers of all time, J P Getty is often quoted as saying - ' if it appreciates buy it, if it depreciates, lease it '. That’s the strategy you probably should adopt on every asset acquisition, and utilizing the variety of equipment financing leasing options is the common way to approach that lease versus buy decision.
Speak to a trusted, credible and experienced Canadian business financing advisor that will help you achieve and overcome your obstacles to competitive innovation.
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .
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
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.