Equipment financing companies in Canada. We maintain that when it comes to a business lease for asset financing there is certain information on this subject is ' nice to know ‘, while in other situations its absolutely critical to your asset finance success - i.e. you need to know this! Let's dig in.
ANY ASSET, NEW OR USED, CAN BE FINANCED!
Business owners and financial managers should always understand that just about any asset, even intangibles such as computer software as an example can be lease financed. The entire application process for leasing approval has never been shorter - transactions under 100k are often approved the same day, or even online, or within 24 hours. Larger complex transactions will always take a bit more time, but will invariably be approved faster than a business loan.
EQUIPMENT FINANCING IS A LONG TERM FINANCE DECISION
When it comes to the asset financing decision it's all about short and long-term decisions and that timeframe can be all-important to your financing success. More often than not the majority of equipment leases in Canada tend to be in the 3-5 year range. These are typical terms when it comes to plant and fixed assets and equipment; note also that interest on lease payments are tax-deductible in leasing.
MANY MANUFACTURERS HAVE CAPTIVE LEASE FINANCE SOLUTIONS
It might, but should not, come as a surprise that some of the largest asset lessors in Canada are manufacturers themselves, offering lease financing. They compete with independent commercial finance companies to finance their own equipment - bring incremental profit and additional sales opportunities into their picture.
NO MONEY DOWN / NO DOWN PAYMENT?
While we are big proponents of equipment finance we're the first to admit that on occasion terms such as ' 100% financing ‘, etc. are somewhat overused by the industry. More often than not down payments of security deposits of some sort are required, especially if your firm is not ' investment grade ' when it comes to credit quality. Lease approvals are available for almost any credit quality, in some cases, interest rates will vary depending on the final restructuring of your transaction to ensure credit approval for the equipment you need.
Business owners should know that any equipment can be financed ( new or used ) that might be medical equipment, construction equipment , rolling stock, computer leasing, software leasing - new and used.
EQUIPMENT FINANCING IS AN EASY WAY TO ACQUIRE ASSETS
Canadian business owners and finance managers like leasing because it’s a simplified process when it comes to asset acquisition. Your firm simply negotiates the type and price of a business asset and the leasing company buys the asset, on your behalf, from the manufacture or distributor. It’s, as we have said, a solid alternative to equity financing or long-term debt on your balance sheet in the form of term loans.
HAVE YOU CONSIDERED THE OPERATING LEASE TRANSACTION?
Not all acquirers of business assets are familiar with operating leases. A simplified way of looking at these transactions is simply that you should consider them as ' service ' type leases.
ADVANTAGES OF OPERATING LEASES
What then are the advantages of operating leases? There are several, they include the fact that the leases are not fully amortized so even with interest built into the transaction you quite often are not paying even the full amount of the value of the asset.
How can that be, ask our clients? Simply speaking it’s that the lessor is making a bet on the useful economic life of the asset when you return operating lease assets at the end of the lease term. The lessor hopes to sell or release the assets under your operating business lease. So there, the secret is out!
FLEXIBILITY AT THE END OF TERM OF YOUR EQUIPMENT LEASE
If there is one both beneficial and creative aspect to equipment financing companies offering operating type leases it's that they allow you a lot of flexibility during and at the end of the term of the transaction. Your firm has the ability to return, upgrade or even buy the asset at mid or end of the term. Now that’s flexibility!
THE CAPITAL LEASE - YOUR ' LEASE TO OWN ' STRATEGY
Capital leases are the opposite. They are fully amortized, cannot be cancelled, and the interest rate clearly defines the lessor profit to which they are entitled. (Hopefully, it’s a ' reasonable ' profit!)
HAVE YOU CONSIDERED A SALE LEASEBACK?
Equipment financing companies will also consider sale-leaseback transactions. You take assets you already own and sell them to the leasing firm, typically to enhance your working capital or cash flow needs. We have even seen our own chartered banks sell their bank towers in downtown cores, freeing up millions in capital for the banks themselves.
CONCLUSION
As we have said, there’s ‘nice to have ‘and ‘need to know ‘when it comes to business lease finance via Canadian equipment financing companies. Financing equipment should not be a challenge for business owners in the SME economy. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in completing a transaction that benefits your company for your business needs.
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Click Here For 7 PARK AVENUE FINANCIAL website !
7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.
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. He is an experienced
business financing consultant
.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 financing 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.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2020
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