The Doctor Is In : Expert Advice on Canadian Leasing
OVERVIEW – Information on equipment financing in Canada. The ability of business owners/financial mgrs to maximize leasing benefits conserves cash and provides financial flexibility for asset acquisition
A lease and equipment financing provider has some basic needs around your initial application for financing. Some of the key areas you should focus on are detailed below.
Leasing is available for firms with all durations of ‘time in business ‘. Although a start up firm can be financing via a lease financing solution your overall time in business can be a great factor to increase your chances of a proper approval. Equally important is the overall industry and business model you are in – as on occasion some industries are out of favor. In 2008-2009 the auto industry was clearly ‘out of favor ‘.
Lease financing is a segment of ‘asset based lending ‘- therefore the asset you are financing has a considerable role in determining your overall approval and pricing. Equipment that is financed generally tends to depreciate, so your lease firm will focus on the value of the equipment during the term of your lease. As an example a lessor could only reasonably expect to recover 5 or 10% of a computers value three years from now, simply because a computer and telecom equipment in general as asset classes depreciate quickly .
Equipment that is not purchase for bona fide vendors and manufacturers also on occasion can present financing challenges. Therefore if you have a choice work with repeatable dealers, wholesalers, manufacturers, etc.
Any lease firm will draw commercial credit reports on your firm and look for payment trends to suppliers – if personal guarantees are required on private small and medium sized firms quite often a net worth statement and credit bureau check will be asked form . Quite frankly these types of information and credit diligence are associated with any borrowing, whether that is a corporate credit card, a business loan application, etc. In reality lease firms in Canada probably provide the quickest overall approval times than any other type of business financing. Many lessors use automated credit scoring systems and smaller transactions fewer than 50k for example can actually be sometimes approved in a matter of minutes or hours.
Lease transactions in Canada can run into the many millions of dollars, lease financing is one of most vibrant financing initiatives in the country – so expect on larger deals that a higher level of due diligence will be performed on your firm for larger lease facilities .
Finally , leasing is all about ‘structure ‘ so you should feel free to be creative in your lease structure request in order to maximize the particular benefits of lease financing that you are trying to achieve – they might include lower rates re your credit quality, seasonal payments, flexible end to term options etc .
In summary, business owners should learn some key leasing basics around what is required to make a lease approval successful. Being armed in this manner will ensure a more prompt approval and the overall approval you are seeking re asset type, term of lease, and flexibility at end of term. That is sensible, proactive financing. Seek the advice of a trusted and credible lease financing advisor who can assist you with asset finance needs.
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 .
7 Park Avenue Financial
Direct Line = 416 319 5769
Office = 905 829 2653
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
