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Equipment Financing Rates & Strategies
Excellent equipment leasing options and solid asset finance solutions do exist in Canada , and suffice to say that equipment finance continues to be a popular and success method of acquiring both new and used assets for your business . Yes Virginia , used assets can be financed also. Financing assets is a proven formula to run and grow your business while at the same time conserving cash and not having to disturb existing credit lines.
Why Is Equipment Lease Finance So Popular with Canadian Business?
There are several key factors that drive the reality success of equipment financing in Canada :
Tax and Accounting Benefits
Conservation of capital and cash flow
An alternative to owning assets that depreciate in value and require replacement
Leasing assets is the ownership alternative - your firm reaps all the benefits of using the asset but is not obligated to the significant capital outlay for those assets. An old adage in the equipment asset finance industry is that businesses benefit through the use of assets , not the ownership . While there is nothing wrong in that other saying - ' pride of ownership ' the reality is that to stay competitive in current times business owners and their financial mgrs must always consider optimal use of capital.
Naturally the additional cash flow saved from lease finance strategies allows your company to invest in other resources and assets to make your business more profitable and competitive.
One of the major concerns for any business, particularly those that are in industries that are deemed ' asset intensive ' is the issue of obsolescence.
Assets that run your business include those shop floor assets as well as the computers and software that drive your business forward. Also some assets have limited long term use - a good example might be the constant upgrades needed for computers and software. ( Yes , application software can be leased !)The constant upgrading of technology needs can be a major cash drain on your business if this component of your business is not addressed properly from a cash flow perspective.
Purchasing assets that have limited long term use is not a solid working capital strategy for any business- your accountant can confirm that one ! Not too many business folks can imagine using todays computers for 3 to 5 years out - doubtful to say the least.
Equipment finance provides your business with ' buying power ' ; that is to say that you can buy more and better assets if your have a lease finance strategy in place.
Example Of Effective Leasing :
Lets say you need a new computer system for 250,000$ and the reality is that an alternate vendor has a better solution for 350,000$. If you were purchasing you have to wrestle down two key issues, laying out 250k , or alternatively coming up with an additional 100k of real cash to complete the second alternative purchase .
The monthly lease payment on a 250k 3 year lease would be approx 7700 dollars, and on a 350k deal it would be approx 10 600 dollars .
So as a business owner which solution do you want to wrestle with - paying either 250k or 350k out of working capital, or working an additional 3k into your operating budget?
Certain assets can also be financed under an operating lease strategy - that's a more technical aspect of equipment finance for another day but one that bears checking into .
The Leasing Bottom Line :
Business owners and financial mgrs must take advantage of some great rates, terms, and structures via one of the most comprehensive and flexible asset finance strategies available to business.
Seek out and speak to a trusted, credible and experienced equipment leasing advisor with a track record of business finance success, You will get the help you need maximize the benefits of this Canadian business financing proven strategy.
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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