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INFORMATION ON BUSINESS EQUIPMENT FINANCING IN CANADA - THE LEASING SOLUTION EXPLAINED!
The ability of Canadian companies to realize the benefits of this key aspect of Canadian business financing makes it more popular everyday. Leases are often confused or lumped in together with equipment loans and it’s at this time you need to know some of the basic aspects of accounting, tax and legal when it comes to differentiating between the two.
Operating leases tend to sometimes bring the most amount of confusion to the table, simply because when they are not structured properly they could be treated as a loan and additional debt on your balance sheet.
Let's examine 6 powerful reasons to use business equipment financing in Canada. Reason # 1 is certainly not our most favorite, but it tends to be the clients, and that’s simply the issue surrounding rates and payments.
Clients like both of those to be... low! While many other aspects of equipment leasing in Canada tend to be as important business owners and financial managers always seem to be looking for the most economical way of acquiring assets. There is an old joke among leasing companies that is unfortunately at the expense of you the lessee. It's simply that any firm can guarantee you the lowest rate, if, and it’s a big if... you sign their lease contract. That of course infers that many other scenarios come into play when it comes to the proverbial monthly payment.
The reality also is that when you focus in on rates only you miss many of the value add dimensions of business lease. some of which are equally as important as we have said. Bottom line, don't always thing asset finance via leasing is a commodity!
Reason # 2 to consider is the whole issue of assets, or fear of assets. Naturally you want to also separate the issue of the price of the asset from the financing - car dealers are masters of that one when it comes to intertwining them as we as consumers know. Leasing allows you to focus on the asset itself and the productivity that comes from it. Leasing provides a great return on investment when you consider the asset in terms of return on investment and cash outflows.
Reason # 3- Managements pay cheque ! What do we mean by that? Simply that many medium size and larger corporations compensate management on finance lingo such as EBITDA. Depending on how your management is measured when it comes to economic performance and ROI the right type of lease strategy can enhance that calculation. Another quick example, operating lease transactions reduce capital outlays.
Reason # 4- It’s all about the money ... or the cash flow conservation. Quite frankly many firms have to lease, they don’t have a choice, because when it comes to working capital you are conserving it via a business equipment financing strategy. Down payments are also eliminated or diminished. 100% financing is very often achievable via lease asset finance.
Reason # 5- Your balance sheet. Properly structured operating leases, aka the ' lease to use ' option can enhance your balance sheet. Even if bankers and other lenders add the assets back in them quite often will not add in the entire original balance. Technology acquisitions in Canada in computing, telecom, etc are perfect for operating leases, as they eliminate technological obsolescence.
Do we have a final reason today? We sure do, and it’s simply the issue of convenience. An asset finance company can approve and structure a proper lease for your firm in a matter of days. Small transactions in the industry are actually often approved and financed within 24-48 hrs! You can easily these days perform a lease vs. buy calculation and also bundle in numerous other services into your transaction.
Consider speaking to a trusted, credible and experienced Canadian business financing advisor to ensure you're focused on our 6 great reasons to consider business equipment financing.
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
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