DIY Equipment Finance & Leasing Canada? Best Companies for Asset & Lease Equipment Needs

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Equipment Finance Companies: A Comprehensive Guide for Canadian Business Owners

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Equipment Finance Companies Lease  Solutions |7 Park Avenue Financial

 

 

INTRODUCTION

 In the vibrant economy of Canada, business owners often face a pivotal question: to purchase an asset outright or to delve into the arena of equipment leasing?

 

This seemingly straightforward choice is riddled with layers of complexity, especially given the country's evolving landscape of equipment finance. This guide aims to unravel these complexities, offer insights into equipment leasing, and highlight the importance of making informed decisions or seeking expert advice.

When the Canadian business owner or financial manager looks to lease an asset instead of a purchase, it’s a great time to invest in some knowledge about which companies to approach for equipment finance needs.

 

But can you be expected to be a 'DIY' expert in this broad area of Canadian business financing? We are saying that it will pay you handsomely to either invest some time in understanding some critical fundamentals of equipment finance or work with an expert who can assist you.

 

 

  

Equipment Finance Companies: A Comprehensive Guide for Canadian Business Owners   

 

Why invest some time in this type of business acquisition? The Canadian lease landscape has evolved significantly over the last couple of years. A combination of the economy in Canada, the lease industry players, new accounting rules and a myriad of product offerings can make it seem daunting.

 

By the way, we're quite sure any business owner can work with lease companies and enter somewhat quickly into a lease for an asset, but is it the right lease, and what are the financial implications and benefits or lack of benefits around that transaction? That’s the $50,000 question!

 

The Significance of Equipment Finance in Canada  

 

Because almost 80% of all businesses utilize leasing in Canada - that’s why it sometimes is both easy and misunderstood. Many business owners don't understand the lease product/service offering or fail to recognize the benefits. Yes, it's only one method of financing an asset (you can consider a term loan)... but when a lessor/lease company recognizes that you know what you're talking about, you have increased your chances for success.

 

The Changing Landscape of Equipment Leasing

 

Lease and equipment finance doesn’t bring cash flow and working capital into your company, but it reduces the funds that go out of your firm!  The ownership of the equipment by the lessor for the lease term allows you to structure payments, write off payments as an operating expense, and, more importantly, keep you 'nimble' when it comes to assets and technologies that you finance over short or long terms. (Typical lease terms in Canada range from 3-5 years).

 

The Risks and Rewards: Making the Right Lease Choice 

 

Business owners might want to do the math, but we're pretty sure that if you work the numbers, it makes sense to enter into a couple of short-term equipment finance transactions rather than purchase/buy outright the same assets over several years.

 

 Understanding the Benefits of Lease Over Outright Purchase 

 

If you invest time in understanding some lease finance basics or work with an expert, you'll see that you can determine when it makes sense to upgrade, return, or renew any lease finance transaction.

 

Deciphering Lease Finance Basics: When to Upgrade, Return, or Renew

 

Can our DIY lease financing business owner affect the final credit and structure approval of his or her transaction? The reality is that stricter credit standards have existed since the 2008-2009 global recession and the recent COVID-19 pandemic. Therefore, the industry focuses on creditworthy lessees- but the good news is that some basic structuring around any transaction can still make your deal happen. Issues such as terms, pricing and down payment can be negotiated to the point where it makes sense for the lessor and your firm.

 

The Tax Implications of Equipment Leasing in Canada:

 

Companies considering leasing should consider the tax benefits and considerations when opting for equipment leasing. Explore how leasing can offer tax deductions, the difference between capital and operating leases from a tax perspective, and the impact of taxes on the overall cost of leasing.

 

The Value of Expertise: Working 7 Park Avenue Financial

 

Working with an experienced Canadian business lease financing advisor can ensure you get the best pricing and structure and achieve the benefits you're looking for.

  

CONCLUSION  

 

So, everyone’s talking about 'DIY' these days. Why not invest some time in developing a solid relationship with a lease advisor? Success in asset leasing allows you to grow your company with the assets you require... today!

 

In a world where 'DIY' has become the mantra, understanding equipment financing holds a unique place for Canadian business owners. While leasing can offer numerous benefits regarding flexibility, cash flow, and staying updated with technology, making well-informed choices is imperative. Whether you invest time in mastering the basics or collaborate with a seasoned lease advisor, what's paramount is ensuring that your options align with your business objectives.

Remember, success in asset leasing isn't just about acquiring assets; it's about acquiring them smartly and strategically to fuel your business growth today and tomorrow. Call 7 Park Avenue Financial, a trusted, credible, experienced business financing advisor.

 

FAQ

 

What exactly is equipment finance?

 

Equipment finance refers to securing assets or equipment for business operations through leasing or loans instead of purchasing them outright. It's a financial solution that allows businesses to access essential equipment while preserving cash flow and potentially taking advantage of certain tax benefits.

 

 

Why would a business lease equipment from leasing companies rather than buy it outright? 

 

There are several reasons:

• Cash Flow Conservation: Leasing can allow businesses to conserve cash, as it often requires a smaller initial outlay than purchasing, as well as tailored monthly lease payments for capital lease or fair market value leases that make good business sense
• Tax Benefits: Lease payments can sometimes be written off as operating expenses and business expense under equipment lease financing rules offering tax advantages. Companies should talk to a tax advisor on larger transactions to maximize benefits.
• Flexibility: Leasing can provide businesses the opportunity to upgrade to  new equipment and newer technologies quickly once their lease term ends via customized solutions
• Preserve Credit Lines: Leasing doesn't tie up credit lines, preserving them for other business needs where traditional financing from banks might be more suited to grow your business - New or used equipment can be financed.  A sale leaseback solution can be considered when refinance existing assets to improve cash flow.

 

 

How has the Canadian lease landscape evolved in recent years?

 

Over the past few years, the Canadian lease landscape has witnessed significant changes due to economic shifts in Canada, entrance and exit of lease industry players, changes in accounting rules, and a plethora of product offerings. Moreover, after the 2008-2009 global recession, credit standards became tougher, placing more emphasis on creditworthiness.

 

What's the typical term for equipment leases in Canada?

 

Typical equipment lease terms in Canada range from 3 to 5 years. However, the exact duration can vary based on the type of asset, the leasing company, and the specific needs of the lessee.

 

 How can a business ensure it's getting the best deal when leasing equipment?

 

Businesses can increase their chances of securing the best leasing deal by investing time in understanding lease finance basics. It's also beneficial to work with an experienced lease financing advisor such as 7 Park Avenue Financial , who can provide insights, assist in negotiations, and ensure the lease terms align with the business's objectives.

 

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

Equipment Financing Companies In Canada . Asset Leasing Works When You‘re Plugged In To The Right Info!

Debunking 7 Misconceptions On Financing Assets In Canada . Myth Vs. Reality



OVERVIEW – Information on equipment financing companies in Canada . Demystifying asset leasing in Canada with information the Canadian business owner and manager needs to know when assessing solutions for acquisition of assets




Asset Leasing In Canada. Equipment Finance Companies have, for whatever reason some myths and plain old bad information associated with who they are, what they do, and what benefits the Canadian business owner and financial manager derive from the use of equipt. financing. Let's dig in.

Myth # 1 - Everyone's doing it! Actually that one is close to 80% correct because experts tell us that over 80% of businesses in North America (hey that's us also!) utilize business leasing to achieve asset acquisition. We can't speak for the other 20% - hopefully they are your mis-informed competitors.

Myth # 2 - A lease is kind of like a loan right? Not really, although bridge loans, term loans, conditional sales agreements, etc are asset finance transactions a lease is not a loan. Accounting, tax and other issues make lease finance a uniquely special proposition when you're acquiring assets.

Myth # 3 - Only certain assets can be financed. That’s definitely not the case, as almost any asset, tangible or intangible (software is a good example) can be financed. The flexibility and creativity that goes into non standard asset financing is significant.

Myth # 4- There is only one type of business lease. That one is definitely not true, as in Canada the business owner/financial manager has the option to utilize a ' capital' lease to own strategy, or alternately, an 'operating ' lease to use finance choice. It really depends on the type of asset you are financing, its long term use to your firm, and its value. Oh and by the way, within those two basic lease option structures your company has the ability to structure payments that make the transaction more beneficial to your firm.

Myth # 5 - A lease company is a lease company, right. Not so fast! There are all types of lease companies in Canada - while they are segregated generally into small, medium and large ticket lessors they in fact range in size and geographical focus. The industry is made up of independent commercial lease companies, bank entities, and insurance companies. And ownership can be Canadian or U.S. based. Just knowing what leasing company to deal with for the assets your are financing is worth its weight in gold when you factor in time spent, interest rates, structures offered, and credit approval criteria .

Myth # 6 - The main benefit to asset financing via a lease is the 100% financing and fixed monthly payment. While that is of course true, there are numerous other benefits to asset financing under a lease structure - they include hedges against asset obsolescence, the ability to upgrade assets, tax and accounting benefits, cash flow management, etc .

Myth # 7- There are no risks in leasing. We wish we could say that is true, but in reality any aspect of business always has risk and some of the potential risks in lease finance include loss of asset values, repossession for non payment /default , risk of asset loss, insurance obligations,etc. The good news is that a properly structured lease, with the right partner firm or advisor can mitigate significantly, or entirely all those risks.

There you have it. Our debunking is complete. Seek out and speak to trusted, credible and experienced Canadian business financing advisor who assist you in setting the record straight on equipment finance companies and asset leasing in Canada.



7 PARK AVENUE FINANCIAL
CANADIAN ASSET FINANCE EXPERTISE


Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


Canadian Business Financing







7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com
















Stan Prokop

Are You A Slacker? Lease Financing Intelligence Can Increase Sales And Profits. Mastering Equipment Financing Companies Isn’t As Hard As You Think

Master A Few Lease Finance Basics For Business Success


OVERVIEW – Information on equipment finance companies in Canada. Understanding leasing and asset financing can make your firm a winner


Nobody likes being called a ' Slacker '.

And you don't need to be. ( We're the first to admit though that the working for a living thing is sometimes over rated ! ) When it comes to equipment financing in Canada a little bit of work and knowledge can take you a long way when it comes to utilizing new assets for profits and sales growth within your firm. Here's what you need to know!

Managing a relationship, either long term, or even once with equipment finance companies is all about understanding where the other party is coming from. You have a reason to require their services, and in the current Canadian asset finance environment we can assure you there’s lots of competition out there looking for your business.

It's about though, understanding where the lease firm is coming from. Their charter is pretty close to yours, making a profit... on your firm. It’s your job to make sure it’s a ' reasonable profit '!

The Canadian lease finance industry touts itself as a 100% full financing business. That is to say very little... if any , down payment is required for the financing of assets , and don't forget also that you have a lot of payment flexibility with respect to staggered payments, seasonal payments, quarterly payments, etc, etc and on it goes. So if you do have reasonable credit quality make sure you are bargaining hard for little to no up front payment and focus on cash flow monthly payments that make sense for your type of business.

Fortunately or unfortunately our clients are always pretty well just focusing on the implicit interest rates in a lease. When they feel they have won at that game they feel they have entered into the consummate leasing transaction... via the ' monthly payment '.

While your lessor does in fact make most of its profit on the rate it should never really be considered the be all and end all. Other factors include the quality of the documentation you are being asked to sign, the residual value of the equipment at end of term, and any tax and accounting benefits that you and the lessor split or share. So yes, equipment financing companies borrow money themselves to stay in business, and the more they can charge you equates to more profit, but remember those other issues also.

Oh and one final point on that whole ' rate ' issue. In the 2012 time frame the leasing financing industry is very competitive, so your sales, profits, cash flows and balance sheet have already pretty well determined what your interest rate is. Enough said on that subject.

We mentioned the value of the asset at the end of the term as another key component you need to think about. If you are returning the asset to the leasing company they have spent a bit of time already, unbeknownst to you it would appear! deciding what that asset will be worth a few years from now when your lease ends. Let's say that’s 10%. They then price their lease according to not only credit risk, but what is known as the residual value of that asset a few years out. By taking sometime to understand that value yourself you have some negotiating power on price and lease structure and term.

So, our advice? Don't be a slacker when it comes to dealing with equipment finance companies. A classic case of a bit of knowledge saving you a lot of time and money! Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your lease finance needs.

7 PARK AVENUE FINANCIAL
CANADIAN EQUIPMENT FINANCING EXPERTISE


Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

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