Getting The Most Out Of Canadian Lease Pricing and Best Lease Rates?

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YOUR COMPANY  IS LOOKING FOR CAPITAL EQUIPMENT LEASING AND THE BEST LEASE RATES AND PRICING!

Secrets of Lease Pricing for Smart Business Financing

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the  biggest issues facing businesses today

ARE YOU UNAWARE OR   DISSATISFIED WITH YOUR CURRENT  BUSINESS FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

 

Lease Pricing Best Rates Capital Equipment Finance  | 7 Park Avenue Financial

 

Understanding Lease Financing: Unlocking the Best Lease Rates in Canada

 

Exploring the Importance of Lease Rates and Terms

 

Leasing equipment and equipment loans are standard in Canada, but do you truly understand its intricacies when you purchase equipment or new technology?

 

Many business owners seek ways to secure the best lease rates for their business equipment and technology needs in Canada while effectively managing capital equipment financing. This article will delve into the significance of comprehending business loan lease pricing and terms, offering valuable insights, tips, and strategies for making informed decisions.

 

 

The Pitfall of Ignorance: End-of-Term Obligations 

 

One of the most significant threats to equipment financing in Canada is the lack of awareness regarding factors that can impact the advantages of a lease, particularly the often-overlooked 'end of term' option.

 

Astonishingly, numerous small and large businesses fail to grasp the importance of understanding and invoking their equipment financing options when their leases expire. Paradoxically, larger corporations often fare worse in this regard, as the complexities of managing numerous equipment leases can lead their systems to 'forget' critical details.

 

But how can an end-of-term option prove costly? Surprisingly, many leases are structured to obligate your firm to continue paying the monthly lease payment if the notice or obligation is not handled correctly. Failure to return, buy, or formally extend a transaction can leave you in a perpetual payment cycle, which is far from ideal.

 

Imagine leasing a $25,000 document copier, paying it off over five years with interest, only to find yourself paying for it again. To compound matters, the asset has depreciated and become outdated due to technological advancements. This situation is far from optimal.

 

Navigating Lease Pricing Options in Canada

 

In the Canadian capital equipment finance industry, lessors offer many pricing options, which can bewilder business owners and financial managers. To simplify the lease pricing process and secure the best rates, it is essential to perform fundamental research into the two primary types of leases: capital (also known as lease to own) and operating (also known as lease to use).

 

 

Choosing the Right Lease Strategy 

 

An operating lease strategy is prudent if your assets depreciate rapidly or require frequent upgrades to stay competitive. This approach, exemplified by computers and computer systems, presents benefits such as lower monthly payments, flexibility in returning and upgrading equipment, and the ability to effortlessly replace outdated technology at the end of the lease term. Operating leases often offer the most favourable lease rates compared to lease-to-own strategies. via a financial institution

 

Streamlining Lease Financing

 

Simple lease finance strategies can further reduce your monthly payment, with options like a bargain purchase at the end of the lease, effectively lowering your ongoing costs. Moreover, your interest rate on lease financing in Canada depends on factors such as your firm's credit quality, the type of asset you lease, and your choice of lessor. Given the segmented nature of the industry, partnering with the right lessor can translate into substantial cost savings throughout your financing relationship.

 

 Conclusion: Harnessing the Power of Lease Financing 

 

In pursuit of the best lease pricing and terms? Call 7 Park Avenue Financial, a trusted, credible, experienced Canadian business financing advisor.

Their expertise can help you leverage the advantages of this potent capital equipment finance strategy, embraced by countless business owners daily. By mastering the nuances of lease financing, you can unlock the key to securing favourable lease rates and ensuring the long-term financial health of your enterprise. Don't leave your leasing fate to chance—make informed decisions and reap the rewards of right lease financing.

 

To achieve the best lease pricing and terms, speak to  7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can help you, the business owner, maximize the benefits of this powerful capital equipment finance strategy used by thousands of business owners every day.

 

 FAQ 

 

Why is understanding lease financing crucial for my business?

 

Understanding leasing equipment financing companies and lease financing helps you secure the best interest rates and terms for equipment purchases, potentially saving thousands of dollars. It empowers you to make informed decisions and effectively manage your needs around new or used equipment financing.

 

What are the risks of neglecting end-of-term obligations in leases?

 

Neglecting end-of-term obligations on a capital lease or fair market value lease can lead to continuous payments even after the lease ends. This costly oversight can leave you paying for outdated equipment, hindering your business's growth.

 

How can I choose the right lease strategy for my business?

 

The choice between capital and operating leases depends on your asset's depreciation and upgrade needs. Capital leases from financial institutions such as a commercial leasing company offer ownership while operating leases provide flexibility and lower monthly payments.

 

What factors affect my interest rate on lease financing in Canada?

 

Your interest rate is influenced by your firm's credit quality,  down payment, the owner's and the business's credit score,  the type of leased asset, and your lessor. Finding the right partner can result in substantial cost savings over the financing term.

 

Why should I consult a Canadian business financing advisor for equipment leasing programs?

 

A reputable advisor can guide you through the complexities of lease financing, helping you maximize its benefits. Their expertise ensures you make the best financial decisions for your business around the best equipment purchases and financing possible.

 

Are there tax benefits associated with lease financing in Canada?

 

Lease financing can offer tax advantages, such as deducting lease payments as business expenses. However, specific tax benefits may vary based on your business and the type of lease.

 

What is residual value, and how does it affect lease terms?

 

Residual value is the leased asset's estimated worth at the lease term's end. It can impact lease payments and terms. A higher residual value typically leads to lower monthly payments.

 

Can I terminate a lease early if my business circumstances change?

 

Early lease termination can be possible, but it often incurs penalties. Review your lease agreement to understand the terms and costs of early termination for leases and business loans when purchasing equipment to finance the asset.

 

Are there industry-specific considerations for lease financing in Canada?

 

Different industries may have unique requirements and considerations for lease financing and loan terms. Tailoring your lease strategy to your specific business needs to finance equipment is essential. Almost any type of asset, from trucks to specialized medical equipment, can be financed.

 

How does lease financing compare to traditional bank loans for acquiring equipment?

 

Lease financing via equipment financing lenders typically requires less upfront capital on the purchase price than an equipment loan and offers flexibility. Bank loans and unsecured business loans involve ownership from the outset and may require substantial down payments. Choosing between the two depends on your financial goals and circumstances. Business owners'  personal credit scores and overall financial health are key to bank loan approvals. In contrast, commercial financing companies and online lenders have less stringent approval criteria to purchase the equipment required.

Companies using lease finance can conserve existing lines of credit. No minimum annual revenue is required when using an asset finance strategy.

 

Click here for the business finance track record of 7 Park Avenue Financial

Best Canadian Equipment Lease Interest Rates in Commercial Leasing?

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Commercial Equipment Lease & Loan Rates - Explained !

Looking for the best deal in town on equipment leasing rates in commercial leasing and asset acquisition ? Our clients ' interest ‘in getting those best rates is always somewhat amusing to us. Why? Simply because the ability to understand how equipment leasing and equipment loans are priced and how rates are derived is not always clear to Canadian business owners and financial managers.

Lets examine some of the key factors that drive your final pricing when dealing with equipment leasing companies and how you can have a very direct effect on the assets you finance and the price you pay - as always it seems to always come down to that ' monthly payment ' - so lets demystify that process .

First of all many business owners never take the time to look at their alternatives when it comes to equipment leasing of their fixed assets. Two key issues come into play here, one is simply they type of lease they enter into (there are two types - do you know which is which) and the second is understanding what the 5 (yes five!) components are of a very simple lease calculation.
Back to point # 1: When you are making that lease versus buy decision make sure you evaluate your alternatives.

The key alternative to lease finance is one in which you might consider a bank term loan, or alternatively purchasing the asset out of your operating cash flow based on existing credit lines that are in place. But quite frankly the reason you are reading this in the first place is that you have already decided that commercial equipment lease financing is in fact the best method of asset acquisition - at this point you just want a good deal . So we're assuming you have done your lease vs. buy analysis and are focused on our core subject today - a great lease rate and structure!

Getting back to those 5 key elements in lease financing pricing - what are they? They are simply as follows - the term of your lease, the interest rate being charged by the lessor, the value of your transaction, the future value of the lease, ( i.e. what happens at the last payment ) and out of that falls nicely # 5 - your monthly payment .

Many business owners, and are we say, financial managers don’t use a financial calculator. If you have access to that type of calculator you can simply input either your data, or assumptions on any of those 4 critical data points and out will pop the last piece of data that completes the commercial leasing pricing and structure.

Quick example - lets say you are leasing an asset for $100,000 - you want a 5 year lease, you think your lease interest rate should be about 8%, and you want to own the equipment at the end of the lease. Congratulations, you have just quantified 4 out of the 5 data points - Enter those into your lease calculator and you will see that the monthly payment is 2014$.

But wait, let’s say you can only afford 1500$ a month and you have done your analysis on the payback of the asset. Enter 1500$ into your lease calculator and it will show you that to achieve that lease payment the term must be 88 monthly, not 60 months .


Getting the point ? Its a simple one - understand that if you know the key elements of your lease inputs you can manipulate that info to achieve either the best rate, the best monthly payment, the optimal term of the lease, etc .

The type of analysis we have just done relates to a capital lease transaction - remember we spoke of two types of leases. If you want an operating lease (i.e. use, but not ownership of the asset) our data elements are just the same but you'll find that your overall interest rate on the amount financed will be much lower, because the lessor and you have opted to have the lease company own the asset.

Do we even have to mention that the key driver in the actual interest rate charged is very simply the overall credit quality of your firm when it comes to borrowing.

So what have we covered - simply that you have the ability to manipulate key lease elements to drive a final pricing and structure that works best for your firm. Is there a quicker way to ensure you have all the points covered - there is! Speak to a trusted, credible and experienced Canadian lease financing advisor with a track record of business financing success who can ensure you the final deal is the best deal in commercial equipment leasing in Canada.










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

Click Here For 7 PARK AVENUE FINANCIAL website !





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

Business Leasing & Equipment Finance – Do You Know These 4 Secrets Of Lease Financing ?

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INFORMATION ON EQUIPMENT LEASING LOANS AND ASSET ACQUISITION FINANCING IN CANADA

Business leasing and equipment finance in Canada. Does your firm take advantage of these 4 secrets of lease financing in Canada, thereby maximizing the benefits of an already proven business finance tool used by 80% of North American ( that’s Canada too by the way !) business.

Let's focus on some of the advantages of leasing, thereby giving you some great reasons to consider entering into a lease when your firm acquires assets. Yes there are other ways to acquire assets - they include term loans, or putting in additional equity into your company but time and time again Canadian business owners and financial managers come to realize that lease finance is competitive and offers some of these ' special ' advantages that arent available elsewhere .

So, is lease financing the right decision? Let's examine secret # 1 - which simply speaking is your ability to get 100% financing on. And even if a down payment is in fact required 90% financing, as an example surely isn’t a bad thing. Oh and by the way, the additional costs that you might have to incur in acquiring an asset, i.e. delivery, installation, training, maintenance, etc. can easily be bundled into your transaction. If you went the term loan route many of these softer costs couldn’t be financed and therefore drain your cash flow.

Secret # 2 in business leasing. It's your ability to be a ' hedger '. A hedger? We mean of course a hedger in terms of an inflationary environment. As you make your payments over time the lease company that receives your cash of course recognizes that’s its worth less over time whenever there is positive inflation in the economy. They lose, and you win. Naturally this is probably not the greatest economic decision driver when you acquire and asset but its one more positive in the lease advantage scenario. And since lease terms are available anywhere from 2- 7 years typically you keep on being the winner.

Secret # 3- In your kingdom of business, cash flow is king. We all know that .The drain on cash flow in your company can be offset by utilizing lease financing. Firms with good credit ratings can get great rates these days, and even firms that have credit challenges are able to take care advantage of ' structured ' transactions, allowing them to acquire the asset under perhaps a shorter term or higher monthly payment.

Secret # 4- The lease financing transaction typically is complimentary to your overall banking and debt strategy. Banks or other institutions might have what we call ' negative covenants ' about how you run you business from a financial ration perspective. Leasing can often address your other loan covenants with lenders in a positive manner, but we do caution business owners and financial managers to review their covenants prior to entering into a lease.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in maximizing asset 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

Technology Leasing Companies - Canada – Inside Info On Computer & Software Finance

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Leasing Technology Assets In Canada

Information on the benefits and pitfalls of technology leasing in Canada. Which companies offer financing of computer, software, telecom and other assets . What leases work best in hi tech?

If cash Flow and capital were no object the acquiring of technology assets wouldn’t be as much of a challenge as one would think. Canadian business owners and financial managers like to be on ' the inside ' when it comes to knowledge and competitive information - it’s just natural.

So we want you to be on the ' inside ' when it comes to technology leasing and financing . What companies should you be working with when it comes to the financing of telecom, computer and software assets. We want you to know some of the tricks (can we call them that) that the big boys use.


Technology leasing has some different economics when it comes to financing. Some very powerful ................ are in play. Your financial commitment to acquiring these types of assets is generally large relative to your overall capital budget; these assets tend to depreciate rapidly, and prices seem to be going down all the time... so when should you purchase? Boy, those are some interesting dynamics!


At the same time the benefits you receive from the use of tech assets are huge, not the least of which is your competitive position in your industry. So let's talk about overcoming some of those tech challenges


Many business owners are not aware that you can finance ' software ', either on a stand alone basis, or in conjunction with a hardware solution. But there is a key differentiator here, which is that it is much easier to lease application software as opposed to the software you have developed. But larger, creditworthy companies can in fact get financing for software development on a project by project basis.


One of the interesting ways that the lessor protects himself in these situations is to ensure they have access to and rights to the source code you are developing. How is that handled, usually via an escrow agent who maintains updated access to the source code, with the provision that should the lease default the lessor has access and rights to that source code .



Term. It's all about ' term ' when it comes to technology leasing of computer and software. Leasing companies in general prefer a 3 year term for tech assets. Does that make sense? We think it does... if only for the fact that the dramatic changes in hardware and applications render anything older than three years as somwhat obsolete when it comes to technological change. So the bottom line is to be prepared to defend your need for a 4 or 5 year lease term when it comes to a depreciating asset such as tech.


It should be no secret to Canadian business that technology leasing is secured by the lessor in the same manner as any other assets, a PPSA ( Personal Property Security ACT) registration is made against those leased assets; registering the lessor collateral in the hardware and software described in your equipment list and configuration .


If there is one ultra-important thing you should consider when looking at companies that will assist you in technology leasing of computer, software, and telecom assets it’s probably the type of lease that you enter into. Broadly speaking in Canada



You need to only focus on two types of leases - capital and operating. Is there an easy way to immediately pick which one is the most applicable to your need? It's not as challenging as you think, think simply in terms of the lease to own (that’s capital) and ' lease to use ' (that’s operating). Those two leases, capital and operating, dominate the Canadian marketplace.


Those big boys we referred to, major corporations tend to use operating leases for some sophisticated reasons such as balance sheet ratios, cash flow coverage covenants, return on equity goals, etc. If you are a small or medium-sized business these same operating leases simply could provide you with two things, a lower monthly payment, and some great flexibility at the end of the lease term.


In summary, there are some major differences in dealing with technology leasing as opposed to other types of assets that might be in your budget. Many of the ' tricks' those larger corporations use are available to the small and medium-size business owner. Understanding how these assets can be financed is important for any sized business. For extra expert help consider talking to a trusted, credible and experienced Canadian business financing and leasing advisor who can assist you in ensuring maximum benefits and flexibility.

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

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

Click here for 7 PARK AVENUE FINANCIAL

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.

5 Tips For Selecting The Right Leasing Company For Your Equipment Finance Needs

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Equipment Financing Lease Solutions In Canada - The Not So Radical Way To Finance Asset Needs





Information on equipment finance solutions in Canada . Working with the right leasing company solutions is the best method to address capital equipment needs

Partnering is more often than not the right thing. Bad partnerships don't work and can adversely of course affect your business. That’s why it is so important to select the right firm to originate your equipment finance needs.

The right leasing company on a long term basis will ensure that you are investing properly in the assets you need to run your business for your customer base.

Let’s look at 5 key tips we can provide you to ensure you are putting the right financial strategy in place around asset acquisition. Successfully working and negotiating through these tips with the right leasing partner guarantees you business equipment lease financing success.

Its all about getting approved of course , and getting an approval quite frankly is the biggest decision your lessor has to make around the transaction - that approval can be significantly influenced by yourself - it is important to present both the positives around your firms financials, as well as the challenge you may have, or may be facing,

Chance of getting approved is significantly reduced if negative information about your firm or its financials arises after your submission. Factors that affect your approval are your time in business, your ability to have sourced financing in the past - i.e. other lessors, banks, etc. Other key areas of focus are trade references and the ability of the owners to demonstrate they run their personal lives in a fiscally responsible manner also. This is usually accomplished by the lessor drawing a credit bureau report. On transactions over 50,000.00$, as a general rule financial statements are required, and areas of focus will be your overall balance sheet health and the ability to generate positive cash flow to repay the lease .

Lets move on to rate, we are never under surprised with how much our clients focus solely on rate and their ability to drive down the lessors yield . In Canada leasing equipment is very competitive, and all we can say is that if you have presented your financials properly the market will ensure you have a competitive rate. Naturally you can spend all the time in the world securing a ' better deal ', but consider management time and total savings. A quick example: If you leased a 75k piece of production equipment and were quoted a rate of 10.25% and you spent a lot of time in sourcing another quote, re submitting your financials to a new firm, etc , and got a rate of 10.00% you would be saving twenty dollars a month. We'll let you decide the value of your time.

We have covered off credit approval and rates, Documentation are important also. You should be prepared to provide a proper invoice or quote to the lessor, as well as a certificate of insurance. The equipment lease and your acceptance of delivery are key to the lease commencement. Smaller transaction in Canada has been greatly simplified, so you should typically be provided with a one or two page lease agreement. Larger transactions are of course more complex.

The type of lease you choose and your analysis of the lease versus buy decision is also a key area of focus. Look at your cash flow Vis Vis payments you will make on a lease versus a loan basis. As a general rule leasing tends to be more expensive, but is easier to obtain and is less of a drain on your cash flow.

Two is the magic number. There are two types of leases you should inquire about, a full payout capital lease, as well as an operating lease where use of the asset is more important than owning the asset.

Your overall lease financing decision should be focused on a very simple question - namely:
- is the asset acquisition important to your business profitability and productivity. If new assets and proper financing position your business for competitiveness you have made the right financing decision.

We have covered off 5 key areas in the selection of a leasing company in the equipment finance area. If you find the information and the challenge overwhelming speak to a trusted, credible and experienced business financing advisor who will help you achieve lease financing that meets your goals.

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

Direct Line = 416 319 5769

Office = 905 829 2653

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

Lease Equipment or Buy Equipment? - Let's Get Technical!

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We can safely say that all growing companies need financing to fund ongoing capital expenditures, commonly called 'CAPEX' by CFO's and Wall Street. It goes without saying, also, that even established companies need to replace assets at some point in time.

When companies utilize lease financing they are in effect leverage their capital investments. They could clearly only buy so much with their own capital resources, but borrowing or leasing they can do more than might otherwise have been possible.

There is a technical term called 'WACC', which accountants and financial analyst recognize as WEIGHTED AVERAGE COST OF CAPITAL. As fancy as that term sounds, it simply says that if a company understands how much it costs them to borrow, and then can earn more on a new investment than their borrowing rate, well, then It makes sense to lease. Using a simple example, if a company wishes to purchase a new asset that will deliver a 15% return on assets, and their borrowing cost is 10%, the 5% difference is a major economic positive and benefit to the company. It would not make sense to pursue the asset if borrowing costs were 15% and the return was 12%!!

Naturally at all times business owners and CFO's know that their company can assume only so much debt, as in additional leases, etc. At a certain point there is a threshold that is reached where a company is maxed out on debt.

Leasing also has the ability to defer taxes - in essence its interest free debt. So in these case a major lease financing scenario can also be viewed as a form of deferred taxes, which many financial analysts and bankers view as quasi - equity. And that's a good thing!

Naturally an aggressive lease financing strategy in effect accelerates capital investment, business expansion, etc. The company does not have to pay out 100% of the value of the asset at inception. In companies where capital expenditure and free cash flow are critical those are important measurements of success. The lower investment in a equipment leasing strategy allows a company to invest in other assets and projects. Leasing therefore increases the speed of investment - the company is trading future cash flows for a lower cash outlay now.

In summary, companies debating a lease or buy strategy must ensure they have their primary data correct, re borrowing costs, expected returns of assets/project, etc. The company needs to clearly assess how long the asset will be used for, and ensure It matches the cash flow analysis they are using on that particular asset or project. Customer need to know their borrowing rates, and be realistic, as we have seen that they will be benchmarked against their return rates.



7 Park Avenue Financial :

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

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






Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698


Article Source: http://EzineArticles.com/3588687

Reasons to Finance (Not Purchase) Equipment

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We are continually told there are significant benefits to lease (finance) equipment purchases in a business. Let's examine some of those benefits.

Economic stat's tell us the equipment leasing and financing in Canada and the U.S. totals Billions of dollars. Historically almost 1/3 of all equipment has been financed, not purchased. We will look at some of the true benefits of leasing - every benefit many not necessarily accrue to every firm who finances, but many will, and the business owner or financial manager should understand how his firm can benefit from this financing strategy.

When we break down the benefits of leasing into a large number of single positive points we find that these benefits can be simply grouped into a number of key categories. They are as follows:

*Business in general find it easier to account for leases - payments are fixed

*Leases can be structured to have the business own or not own the equipment at the end of the term of the lease

* Many businesses are either incapable, or do not choose to address the technological aspects of the equipment they are financing - Leasing gives them maximum flexibility in that area. For example a company leasing technology generally wants to use the technology, which evolves. It does not wish to purchase or lock into ownership of technologies that are evolving. Think computers!!

* Lease financing has maximum cash management flexibility - payments can be tailored with longer amortizations, seasonality according to the customers business, fixed regular payments ( term loans tend to have variable, not fixed rates ) etc.

* Budgeting: More often than not this is usually the main reason most customers give for financing equipment - the financing provided during the leasing exercise allows the company to potentially acquire more equipment than it might have in a straight ' purchase' scenario. In many cases little or nominal down payment is required. The vast majority of customers also pay the taxes on the equipment and maintenance via the fixed monthly lease payment. Companies that are either growing quickly, or in some cases are having some level of financial challenge will always tend to gravitate to the leasing solution.

Lease financing has always been perceived as a strong financial acquisition alternative. In the economy of 2017 where ' cash is king ' alternative financial such as the lease option is a strong


Stan Prokop is founder of 7 Park Avenue Financial - http://www.7parkavenuefinancial.com The company originates business financing for Canadian companies,specializing in working capital, cash flow, and asset based financing. In business 6 years the company has completed in excess of 45 Million $ of financing for companies of all size. For info on Canadian business financing and contact details see:

http://www.7parkavenuefinancial.com/toronto_ontario_equipment_financing.html



7 Park Avenue Financial :

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

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

















Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698


Article Source: http://EzineArticles.com/3540334