What Are Sources Of Business Finance In Canada

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Sources Of Finance For Business Growth / Survival/ Expansion

Sources of business finance is all about options and having business owners identify the need and importance of solutions to funding their company in challenging times . Certain times are more challenging than others .

Although it's not necessarily ' easy ' for larger corporations, or public companies to raise capital , SME COMMERCIAL FINANCE solutions  are probably even more challenging.

What Are Cash Flow / Debt / Working Capital Options For Your Company ?

Canadian business financing options come with a combination of benefits an risks.
Part of the challenge is your being able to determine whether your company needs operating capital or long term capital in the context of asset financing or permanent working capital.

When it comes to ' operating capital ' a company might still be in somewhat of a ' start up ' mode, so there are the typical expenses for starting a company - these might include product development, marketing, legal and accounting, leasehold improvements, etc.

Two critical areas in that early stage that we have mentioned have some unique financing solutions available. The Canadian Govt' SRED program ' funds a significant portion of r&d capital . As well these claims can be financed, accelerating the cash flow, via a short term SR&ED FINANCING LOAN that has no payments during the term of the loan.

Your SR&ED claim is most successful when it is prepared by a qualified SRED consultant who can maximize the benefits of the program. We cringe when business owners or financial managers tell us that the program is ' just too much paperwork ' because they are clearly forsaking a true capital injection into their business. Many of those consultants will actually prepare your claim at their own time and expense risk, offering you a contingency agreement on those funds. The bottom line: check out this program.

Leasehold improvements are always difficult to finance and Industry Canada helps finance thousands of businesses under the Canadian Govt Small Business Financing Loan program. The features and the benefits of the program , which include a gov't guarantee to your bank are numerous, and the overall rates, terms and structures it provides have even larger companies envious of the Canadian Small Business Financing Loan . By the way, we call them ' SBL'S ' !

Many clients of 7 PARK AVENUE FINANCIAL advise us they have turned to what is known as ' love money ' or ' friends and family ' loans and investments .

We're not big fans of utilizing so called ' love money ‘, and are even less enamored by clients who are actually prepared to collapse personal registered savings or mortgage their homes to start a business. While its important to have some ' skin in the game' as the expression goes its our recommendation that you incorporate your business and strongly seek out traditional and alternative financing to fund your business .

Your business has 2 types of financing available that not all business owners and their financials mgrs recognize. These two types of financing include supplier financing via extended terms, as well as offering cash discounts to client for prompt payment .

Sources Of Canadian Financing For Small & Medium Sized Companies

Receivable Financing is one of the most popular ' alternative finance ' solutions used in Canada. Also called ' factoring ' or ' invoice discounting ' it turns your sales revenues into an automatic cash flow machine . At 7 Park Avenue Financial we recommend our clients utilize ' Confidential Receivable Financing ', allowing your firm to bill, collect, and automatic cash flow your sales/receivables.

Other forms of both traditional and alternative financing include short term working capital loans, more commonly known in the past as MCA'S or merchant cash advances . These loans provide short term ( typically 12 month ) loans geared to your sales levels, and will often be in the range of 10-20 per cent of your annual sales .

Businesses requiring equipment should always consider utilizing lease financing for their new and used equipment needs. We tell clients at 7 Park Avenue Financial that over 80% of North American business utilizes lease finance.

A relatively newer form of financing known as ' royalty finance ' is a hybrid of debt and equity finance.

In Canada venture capital and private equity is generally very difficult to obtain for most start up ventures - we caution clients to not dwell too long on these options unless you're committed to a long haul in effort!

The overall combination of your company size and credit quality will tend to drive the top picks applicable to your firm re numerous sources of financing available, either traditional or alternative.

Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success for the sources of business financing and options available to your company.




7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


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 .

' 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

Working Capital Financing Approaches ! Make Them Work For You

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The 7 Park Avenue Financial  Way  To Solve Cash Flow Problems

Working capital finance , properly structured, can provide the boost your business needs to both grow and operate. Businesses take on the lack of cash flow challenge for a variety of reasons :

New Market Opportunities
Special projects

Etc !

The bottom line is that properly structured business financing allows owners and financial managers to monetize the assets in the business on a short or long term basis. An example of a long term scenario would be a sale leaseback ; short term example might be the cash flowing of your accounts receivable.

It is important to know that certain types of business finance solutions are more applicable than others depending on the special needs of your business. The classic example of a cash flow challenge is when you are growing, profitable, but have a gap between cash on hand in your business and short term obligations.

Examples of working capital finance ? They include:

 Working capital term loans - Recent trends have demonstrated the important of both short and medium term cash flow loans. The overall credit quality of your business and the amount you require will drive a final solution. Loans can be secured against certain assets, or unsecured. Unsecured cash flow loans are currently very popular and have grown out of the popularity of merchant cash advances.

Business lines of credit, essentially an ' overdraft ' are often the most common sources of working capital cash flow . When these are not available from traditional bank sources other commercial asset based lenders step in to take up the slack.

A well structured business credit line is in fact a safety net for your overall cash flow needs.

Other forms of working capital financing ? They include :

1. Invoice finance - aka ' Factoring '
2. Purchase Order Finance
3. Tax Credit Financing
4. Sale Leasebacks

Bottom line ? There are numerous sources of working capital financing . Choose the right one for your firm with the assistance of a trusted, credible and experienced Canadian business financing advisor . Then get ready to grow your business!


7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


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 .

' 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

What is Asset Based Lending? And Why Should You Care?

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How to Get Ahead in Financing with Asset Based Lending

How does asset based lending work ? That's a typical question we get when we're meeting with clients and discussing asset based finance solutions. While some business owners may consider it a second, or alternative option the reality is that in many cases it might be your only solution to business cash flow success.

That's because in many cases traditional finance solutions might be out of reach, for a variety of reasons, for many business owners and financial managers. Therefore mgmt should well consider funding options for alternative financial providers.

What are the reasons you might be looking for a new financing solution/solutions for your company . One might be simply: Growth! Whether you are a start up or growing into faster and more sales for your established company the reality is that traditional loans have a lot of criteria in place when it comes to applying for finance . That's when it's important to properly present your revenue and cash flow plans in a proper manner.

Some asset based lending solutions revolve around assets your business already owns . Assets such as equipment, rolling stock, real estate and yes, even purchase orders can be financed through specialized alternative finance.


You are probably starting to realize now that asset based lending is more focused on the present and future, while traditional finance requires a focus on the past such as cash flow, owner credit history, etc, While these are nonetheless important they are not the primary focus of ' ABL ' ( asset based lenders ) firms.

Flexibility is the key when it comes to these ' new world' business finance solutions. They can be used to grow your business, acquire a competitor, or expand into new markets. In many cases the ABL solution will be a refinancing of your existing debt and assets.

Depending on what type of alternative finance solution you accept in many cases no new debt is incurred- therefore being cost effective in the true sense of the word. Three common sources of asset based lending are invoice financing, purchase order finance, and inventory finance. These solutions simply increase cash flow and allow your business to grow and make good sense.

Speak to a trusted, credible and experienced Canadian business financing advisor to investigate your business finance needs.







7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


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 .

' 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

Why Your Technology Financing Strategy is Missing the Mark (And How You Can Fix It)

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INFORMATION ON FINANCING BUSINESS TECHNOLOGY NEEDS : BEST WAYS TO SOLVE BUSINESS TECHNOLOGY FINANCE NEEDS

Looking for a huge amount of risk, financial risk, and extra cost for your Canadian business? We aren’t’ and you shouldn't be either!

Haven’t you got enough risk in your business life to have to also consider the downside of making the wrong decisions in areas of technology financing services? Surely it’s a fact that computer leasing of pc hardware, servers, and software, aka '
technology finance solutions ', provide both the greatest benefits to your firm, as well as the greatest risk if you structure things improperly.

It's always been clear to us that there are just a huge amount of benefits to your business when your technology infrastructure is throwing your firm off the benefits you had hoped for... (and were promised?)

Another aspect of getting the right tech financing in place is simply the amount of time you and or your key staff in this area can spend on weighing options and considerations .When your finance folks, accounting folks, and those techies aren’t in mutual agreement or in the know about whats going you are leading your firm into potential mistakes and costs you could have avoided.

When we sit down with clients and layout some key issues for them to consider for computer and software leasing one of the key areas we focus on is ' end of term '. It's a simple phrase that has all sorts of ramifications you didn’t think of. And unfortunately most clients focus on starting a lease, and not ending in, which should have the same consideration when it comes to computer and tech financing.

So why is the end of the lease so important in technology financing ?

Simply because that’s when a lot of your risk mitigation kicks in , and , depending on which type of and lease company you are dealing with that’s when their real profit on your transaction often starts . It’s not always about the interest rate, which many clients seem to always focus on a being the most important part of a computer leasing success story.
So whats one example of how you can lose big time in technology financing and end of term .Quite frankly you wont believe how simple, and costly this is! We're talking about 'notification '.

Most Canadian companies don’t either know or understand their notification rights when it comes to end of term. Your lessor may have promised to call you when your lease term is up... if they do, or even better, notify you in writing, that’s great. However when they don't you are in many cases obligated to keep paying for the lease.

Ever paid for something twice by mistake? (We hate it when that happens!) You wouldn’t want to do that in your personal life, and surely with the cost of pc’s, servers, and software you would regret paying for that twice also. That's a bit of an understatement, don't you think?

So discuss end of term options, ensure you understand your rights and obligations, and also diarize when that lease term is up. Never had a calendar been so important!! And by the way, by spending some time on a ' Master Lease ' allows those notifications, rights and obligations to be addressed one time, up front, in writing! That’s smart business.

In summary, we often preach to clients that one of the largest obstacles to technological innovation to your firm is the cost of pc hardware, servers, software, telecom equipt, etc. Consider eliminating that 'obstacle to innovation' by speaking to a trusted, credible and experienced Canadian financing business advisor who can ensure you have computer leasing that makes sense , in place, today!







7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


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 .

' 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

Don’t Make Mistakes In Sources Of Business Capital And Financing For A Canadian Business Loan. Debt Or Equity? What’s Best?

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You're looking for sources of capital for business and financing solutions. A Loan? An equity arrangement? A monetization of assets ? What works best is of course the nagging question that continuously faces Canadian business owners and financial managers.

Many Canadian businesses who contemplate equity type arrangements simply aren’t ready, and it’s also the most expensive form of financing when you consider the ownership dilution that comes with that strategy.

There is usually never an easy or obvious method to get rid of financial challenges. In fact if you're looking at bank financing, which is of course ' debt ' you may well find that the bank feels that more equity from yourself is in fact required in order to obtain that debt. That's a bit ironic sometimes!

Are there any tools available to help the Canadian business owner understand both the cost of debt and equity? There are, of course.

Whenever any Canadian firm looks for financing outside the business there is a cost to the owners. Naturally if you borrow in terms of term debt the additional interest financing costs reduce profits. Selling equity of course reduces no profit, but, and it’s a big one, ownership is proportionately reduced.

We are always preaching to clients that many forms of business financing outside of equity in act do not reduce earnings if in fact you're monetizing assets and have a healthy turnover in key areas such as receivables, inventory and fixed assets relative to overall sales. That’s why we're big proponents of strategies such as A/R financing, supply chain financing, asset based lines of credit, etc.

Earnings and cash flow analysis is a solid way of evaluating debt and equity alternatives. They can also point to the sources of working capital you need for your business.

What then are the key areas you should always focus on when it comes to debt vs. equity analysis? Some solid ones are overall risk with respect to your ability to make payments under any debt scenario.

And whether its debt or equity consider what flexibility you have with respect to any covenants the lender or equity partner might insist on. Always watch your leverage, there is only so much debt your firm can manage and handle.

The irony in either borrowing or looking for some equity is that you're usually in one of two positions, success, or failure! That one never escapes us, as we meet clients who are successful and have a need to finance new growth or expansion, of alternatively, they are currently losing money and have some real deficiencies in their company that need to be fixed.

When you are looking for debt you can be sure the lender will focus on working capital coverage, leverage, and operating efficiencies. Equity lenders will focus on management, growth potential, and why your business is unique.

If you want to properly understand available sources of capital when it comes to business financing, a loan, or an equity arrangement consider speaking to a trusted, credible and experienced Canadian business financing advisor .





7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


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 .

' 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

Receivable Financing Is The Equivalent In Going From Poor To Rich In Business Cash Flow

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Information on the Best Type of Receivable Financing In Canada

Can working capital factoring solutions be our business version of ' poor ' to ' rich '? It's an interesting analogy if only for the fact that the receivable factor firm solution, properly done creates capital you never had. Let's try and 'connect the dots' in those solutions so the business owner / financial manager sees a clear path to business cash flow freedom. Let's dig in.

There are of course options in working capital finance - they include taking on debt under a working capital term loan or mezzanine unsecured cash flow loan; or the traditional route of Canadian chartered bank financing - theoretically available to all but unfortunately not always to those that need it most.

So why does financing your sales via A/R factor financing a logical step to business capital freedom? For a starter that low cost bank line of credit may not be available to your firm for many different reasons. If for any number of reasons your firm does not qualify for bank credit you're back to square one... our version of business homeless!

Many firms have the most incredible problem imaginable - they are too successful and growing too quickly. That ' rush ' from getting a large new contract or purchase order or seeing sudden surges in sales brings working capital nightmares, as more and more funds are tied up in materials, inventory, and finally accounts receivable

In certain situations your working capital is required for expansion needed for lease/loan payments on new assets, or marketing and headcount growth. Many clients we meet do great business only at certain times of the year - that seasonality causes cash flow needs to rise and fall dramatically at certain times, sometimes unexpected.

One final situation is the whole issue of payment terms and collections. Even large corporations are often typically the ones that pay the slowest, and then there’s... the government!

While certain situations immediately disqualify you for bank financing (negative net worth, fluctuating profits and cash flows, huge jumps in sales revenues) it’s these exact situations which make your firm a solid choice to be financed by a receivable factor.

By the way, in many cases a working capital factoring solution can be a component of a ' total ' asset based lending deal, whereby your A/R, inventory and un-liened equipment are combined into on solid business line of credit. It's typically called an ' ABL ' line by the pros.

Is there one type of receivable factor solution that works best? In our opinion it's non -notification CONFIDENTIAL RECEIVABLE FINANCING , allowing you to bill and collect your own receivables, draw cash against sales when you need it, and only pay for what you are using .

If you want some help in connecting the dots in A/R financing solutions seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with in that ' homeless' to ' rich' transition in business capital!






7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


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 .

' 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

Does Your Canadian Company Have A Serious Asset Finance Loan Or Leasing Strategy ? You Need One!

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An Asset Finance Leasing and Loan Strategy ? Most Canadian business owners and financial managers realize they can either purchase fixed assets out of equity, or finance those same assets on a long term lease.

Business owners need to focus heavily on the use of the asset. Any company that acquires assets has either a long term view of the asset or a short term view. Lease financing is an excellent method of financing long term assets.
From the company perspective a long term lease on the asset - typically 3-5 years, and sometimes longer, is simply a method of purchasing the equipment via a ' loan '. The company simply decides on which asset or assets they wish to acquire, and then negotiates a price with the vendor or manufacturer. Typically the company is either dealing with the vendor/mfr. or the captive finance firm related to that manufacturer.


Business owners are barraged with claims that ' leasing provides 100% financing ' or that it ' conserves capital '. More sophisticated business owners and financial executives know that long term leasing is in fact a solid mechanism for tax avoidance. Some people maintain that if corporate taxes disappeared long term leasing would disappear!


When a firm arranges leasing it of course uses the equipment, and makes fixed payments on that equipment. Business owners focus more often than not on ' using equipment ', not owning equipment. The user can though structure leases allowing them to purchase the equipment at end of term.


If a customer does not wish to acquire assets over a long length of time, and if those assets have a shorter useful economic life than a firm should consider an ' operating lease '. The company has the right to cancel the lease at the end of term, return the asset, etc. In long term asset financing the transaction cannot be cancelled.
If a firm utilized a purchase strategy for long term assets then the funds for those purchases come from equity shareholders. The company uses the asset, and it owns the asset. Many customers have a philosophy of ' pride of ownership ' and have long term histories of acquiring assets under a purchase strategy. If the company is properly funded this is of course an entirely viable option.


We would point out further that if the financial markets were ' perfect ' ( they are not!) the advantages of leasing would diminish. In that case the company would not have to consider legal costs, brokerage costs, and other miscellaneous fees. Leasing matters because there are no perfect markets - advantages gained by the lessee are at the expense of the lessor, and each company has a unique credit and risk profile.


In summary, each company has a unique financial structure and acquisition philosophy around financing and asset acquisition. Owners and managers must consider the optimal financing strategy for long term assets that best suits overall corporate needs.
Speak to a trusted, credible and experienced Canadian business financing advisor on your asset finance and lease strategy .







7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


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 .

' 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