From Startups to Corporates: A Canadian Guide to Equipment & Technology Financing

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Navigating Equipment Financing: What Every Canadian Entrepreneur Needs to Know

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        Financing & Cash flow are the biggest issues facing business today

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

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Finding the Right Lease: Equipment Financing Strategies for Canadian Firms  

 

Introduction: Understanding Equipment Financing in Canada

 

Canadian entrepreneurs and financial managers should be well-informed about essential factors when considering an equipment financing and leasing transaction for an equipment purchase within the Canadian marketplace.

 

Without adequate knowledge and insights into these crucial aspects, one might be unprepared for a leasing strategy. In this guide, we will explore the types of leases available in Canada, their advantages and disadvantages, and how to make an informed decision tailored to your needs at the most competitive interest rates.

 

 

Types of Equipment Leases in Canada / Capital Leases vs. Operating Leases: What’s the Difference? 

 

The Canadian market has two primary lease categories for funding equipment purchases: capital leases and operating leases.

 

Your choice between them depends on whether you aim to own the equipment eventually or merely utilize it. The choice significantly influences the pricing and financial structure of the transaction.

 

• Capital Lease: This option allows you to make fixed payments over time, ultimately resulting in equipment ownership. The payments cover the equipment's cost and financing charges, allowing you to retain ownership at the end of the lease.

• Operating Lease: Typically lasting around three years, an operating lease enables you to pay for equipment used over a specified term. It’s especially suitable for technology equipment like computers and offers significant cash flow and balance sheet benefits.

  

 

Advantages of Equipment Leasing for Canadian Businesses  

Key Benefits and Considerations

 

Leasing equipment offers various obvious advantages to Canadian businesses, which include:

 

• Cash Flow and Working Capital Preservation: Helps maintain liquidity.

 

• Higher Loan-to-Value Financing: Usually requires only a nominal down payment. 100% financing is often available

 

• Credit Facility Preservation: Long-term asset acquisition is matched with a long-term lease, preserving other credit facilities.

 

• Collateral Considerations: In most cases, the financed asset is the only collateral needed.

 

• Tax and Write-off Benefits: Consult your accountant to maximize your transaction using tax incentives and investment credits.

 

 Potential Disadvantages and Risks of Equipment Financing 

 

No single financing strategy fits all firms.

 

Leasing might have perceived or real higher costs. If undertaking a  sale-leaseback financing and the asset's value is below the sale price, you might face a capital gain tax. Understanding insurance, installation, purchase options, and potential restrictive covenants is essential.

 

Key Takeaways :

 

1. What is equipment financing?

   • A flexible business loan or lease to acquire equipment.
   • Payments made over time  to match the term of the lease with asset useful life
   • Avoids the need for hefty upfront costs and a down payment

2. What types of equipment can be financed?

   • Technology, machinery, vehicles, and more.
   • Includes office technology, medical equipment, and heavy construction machinery.

3. How does the equipment financing process work?

   • Efficient approval processes
   • The simple application process, prompt evaluation.
   • Funding is often disbursed within a day.

4. What credit score do I need to qualify for equipment financing?

   • Determined by multiple factors, not just credit score. The focus is on the asset

5. Can any industry get equipment financing?

   • Suitable for most industries, including healthcare, heavy equipment financing construction, IT, etc.
   • Tailored solutions are available for lease and loan repayment terms

6. What are the benefits of equipment financing for new or used equipment?

   • Preserves capital, increases cash flow, offers fixed low rates and flexible terms.
   • Potential tax deductions, no large down payments needed - allowing preservation of existing credit facilities

7. What is the difference between equipment leasing and equipment financing?

   • Leasing: pay to use without ownership.
   • Financing: purchase and own while repaying over time.

8. Can used equipment be financed?

   • Financing options for new and pre-owned equipment. Used assets must be commercial transactions at arm's length

9. What are the tax benefits of equipment financing?

   • May provide tax benefits under CICA accounting rules
   • Deductions for the full purchase price of qualifying equipment.

10. Can I pay off my equipment financing loan early?

• Early payoff allowed; specifics depend on the agreement terms of each lease

11. What types of payment plans are available for equipment financing?

• Tailored to business needs, including monthly, quarterly, and seasonal payments.

12. Why should I choose 7 Park Avenue Financial for equipment financing?

• Decades of experience, and quick approvals.

13. What happens at the end of an equipment financing term?

• Typically, ownership of the equipment and specifics varies by agreement.

 

  

Conclusion:   

 

Leasing remains a vital source of long-term working capital for Canadian businesses.

 

A careful understanding of the types, benefits, and potential downsides can guide you in making an informed equipment financing decision. Don’t overlook this significant option, but use the insights provided to tailor a lease financing strategy that aligns with your firm’s unique requirements.

 

At 7 Park Avenue Financial, our core competency lies in financing solutions for business equipment and technology, furnishing small and medium-sized businesses with the equipment, vehicle, and software financing they require at competitive rates, all while cutting out the frustrations typically associated with traditional bank loans or another conventional financial institution.

 

Our clients enjoy the simplicity of filling out a straightforward application without requiring tax returns and financial statements to finance equipment when not necessary-  receiving a decision promptly.

 

7 Park Avenue Financial provides customized solutions and extensive equipment finance solutions for rolling stock, furniture, and software lease and loan agreements at competitive interest rates ( fixed or variable ) unaffected by inflation. We make the process of getting started as uncomplicated as possible - whether its traditional financing or non-bank finance alternatives.

 

7 Park Avenue Financial has provided financing solutions for Canadian businesses for over 17 years by consistently delivering business financing solutions in areas such as business equipment financing and leasing solutions and cash flow financing funding that businesses like yours demand.

 

 

  

FAQ: FREQUENTLY ASKED QUESTIONS PEOPLE ALSO ASK MORE INFORMATION  

 

What is equipment financing, and why is it important?  

 

Equipment financing for business funding of assets allows businesses to lease or purchase equipment without paying the full cost upfront. It helps conserve cash flow via structured monthly payments to match payments to cash flow, maintain credit lines, and enable growth. Often miscellaneous soft costs can also be bundled into the transaction. 

 

What's the difference between a capital lease and an operating lease?  

 

A capital lease leads to equipment ownership around equipment needs , while an operating lease/ fair market value lease is more like renting, allowing use without ownership. Both have different financial implications.  

Are there any tax benefits to leasing equipment in Canada?

 

Yes, leasing equipment can provide tax write-offs and investment credits, maximizing the financial benefits of your transaction.

 

What are the potential drawbacks of equipment leasing?

  

 

Drawbacks might include perceived higher costs or potential capital gain taxes in some sale-leaseback scenarios. It's essential to understand the specific terms and covenants.  

 

How does equipment financing affect my cash flow?  

Equipment financing lenders allow the company to conserve cash flow by spreading payments over time, which can be crucial for liquidity and financial stability.

 

  

Is equipment financing suitable for small businesses or startups?

  

 Equipment loans and leases can be tailored to suit businesses of all sizes, including small businesses and startups, providing flexibility in growth and operations. For small ticket transactions often only a one page credit application is required - Credit scores of owners do not significantly impact approvals in this method of asset financing and there is no minimum annual revenue requirement.

 

  

How can I determine the right lease type for my business?

  

 Evaluate your long-term goals, such as whether you want to own or use the equipment. Consulting with a financial expert such as 7 Park Avenue Financial for equipment financing needs can help tailor a strategy to your needs. Small transactions can often be approved same day or in just a few hours. 

 

What kind of equipment can I finance?

  

From technology like computers to heavy machinery/ construction equipment, a  wide range of equipment or technology for any business use can be financed through capital or operating leases.

 

  

How can I ensure I get the best equipment financing deal?  

 

Thoroughly understanding the types of leases, benefits, and potential downsides and consulting with a financial advisor can ensure that you choose the best financing strategy for your business.

 

Is equipment the only collateral required in leasing deals?

 

In most cases, yes. The   financed asset in the lease/loan agreement via equipment financing companies in Canada is typically the only collateral needed, making it a less risky option for many businesses.

 

 

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

Equipment Financing Companies - Must Know Info On Business Lease Finance

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Equipment financing companies in Canada. We maintain that when it comes to a business lease for asset financing there is certain information on this subject is ' nice to know ‘, while in other situations its absolutely critical to your asset finance success - i.e. you need to know this! Let's dig in.

 

  

ANY ASSET, NEW OR USED, CAN BE FINANCED!  

Business owners and financial managers should always understand that just about any asset, even intangibles such as computer software as an example can be lease financed. The entire application process for leasing approval has never been shorter - transactions under 100k are often approved the same day, or even online, or within 24 hours. Larger complex transactions will always take a bit more time, but will invariably be approved faster than a business loan.

 

  

 

EQUIPMENT FINANCING IS A LONG TERM FINANCE DECISION   

 

When it comes to the asset financing decision it's all about short and long-term decisions and that timeframe can be all-important to your financing success.  More often than not the majority of equipment leases in Canada tend to be in the 3-5 year range. These are typical terms when it comes to plant and fixed assets and equipment; note also that interest on lease payments are tax-deductible in leasing.

 

MANY MANUFACTURERS HAVE CAPTIVE LEASE FINANCE SOLUTIONS

 

It might, but should not, come as a surprise that some of the largest asset lessors in Canada are manufacturers themselves, offering lease financing. They compete with independent commercial finance companies to finance their own equipment - bring incremental profit and additional sales opportunities into their picture.

 

 NO MONEY DOWN / NO DOWN PAYMENT? 

While we are big proponents of equipment finance we're the first to admit that on occasion terms such as ' 100% financing ‘, etc. are somewhat overused by the industry. More often than not down payments of security deposits of some sort are required, especially if your firm is not ' investment grade ' when it comes to credit quality. Lease approvals are available for almost any credit quality, in some cases, interest rates will vary depending on the final restructuring of your transaction to ensure credit approval for the equipment you need.

Business owners should know that any equipment can be financed ( new or used ) that might be medical equipment, construction equipment , rolling stock, computer leasing, software leasing - new and used.

 

EQUIPMENT FINANCING IS AN EASY WAY TO ACQUIRE ASSETS

 

Canadian business owners and finance managers like leasing because it’s a simplified process when it comes to asset acquisition.  Your firm simply negotiates the type and price of a business asset and the leasing company buys the asset, on your behalf, from the manufacture or distributor. It’s, as we have said, a solid alternative to equity financing or long-term debt on your balance sheet in the form of term loans.

 

HAVE YOU CONSIDERED THE OPERATING LEASE TRANSACTION?

 

Not all acquirers of business assets are familiar with operating leases.  A simplified way of looking at these transactions is simply that you should consider them as ' service ' type leases.

 

ADVANTAGES OF OPERATING LEASES

 

What then are the advantages of operating leases? There are several, they include the fact that the leases are not fully amortized so even with interest built into the transaction you quite often are not paying even the full amount of the value of the asset. 

 

How can that be, ask our clients? Simply speaking it’s that the lessor is making a bet on the useful economic life of the asset when you return operating lease assets at the end of the lease term. The lessor hopes to sell or release the assets under your operating business lease.  So there, the secret is out!

 

FLEXIBILITY AT THE END OF TERM OF YOUR EQUIPMENT LEASE

 

If there is one both beneficial and creative aspect to equipment financing companies offering operating type leases it's that they allow you a lot of flexibility during and at the end of the term of the transaction.  Your firm has the ability to return, upgrade or even buy the asset at mid or end of the term. Now that’s flexibility!

 

  

THE CAPITAL LEASE - YOUR '  LEASE TO OWN ' STRATEGY  

 

Capital leases are the opposite. They are fully amortized, cannot be cancelled, and the interest rate clearly defines the lessor profit to which they are entitled. (Hopefully, it’s a ' reasonable ' profit!)

 

  

HAVE YOU CONSIDERED A SALE LEASEBACK?  

 

Equipment financing companies will also consider sale-leaseback transactions. You take assets you already own and sell them to the leasing firm, typically to enhance your working capital or cash flow needs.  We have even seen our own chartered banks sell their bank towers in downtown cores, freeing up millions in capital for the banks themselves.

  

CONCLUSION

  

As we have said, there’s ‘nice to have ‘and ‘need to know ‘when it comes to business lease finance via Canadian equipment financing companies.  Financing equipment should not be a challenge for business owners in the SME economy. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in completing a transaction that benefits your company for your business needs.

 

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

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



Business financing for Canadian firms, specializing in working capital, cash flow, asset based financing, Equipment Leasing, franchise finance and Cdn. Tax Credit Finance. Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations.

' 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. He is an experienced

business financing consultant

.

Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.


Stan has over 40 years of business and financing experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in-depth, hands-on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.


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







Stan Prokop
7 Park Avenue Financial/Copyright/2020

Guide to Equipment Financing To Finance Business Assets

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Tips to Help You Find the Best Equipment Financing Company

How to Finance Business Assets

Equipment financing and leasing is offered by a number of equipment lease companies in Canada. The only problem is knowing which company to work with, and moreover, how to ensure you receive the best rates, terms and structures available to your firm - based on your overall credit quality and the assets being financing .


Let’s get right to the point - let’s assume you have been approved for a lease financing, or that you have received what appears to be a competitive lease offer.

The information we share with clients focuses around how the lease company makes money - if you know that then clearly it becomes much easier to determine if you have a competitive structure - one that involves both rate, term of the lease, and conditions.

First of all, ensure you know what type of lease you are getting into - there are only two basic types in Canada, operating leases and capital leases. And we will keep it even simpler than that - if you wish to keep the equipment at end of the term of your desired lease get a capital lease, if you intend to use and return the asset negotiate an operating lease.

As we said, you can save or even make money if you know how a lease company makes money - and for the record we are totally in favor of any lease company in Canada making a reasonable profit relative to risk and reward, as well as a reasonable return on their own cost of funds. (Leasing companies borrow money just as your firm does!)

So what areas of concern and diligence should you have around a lease financing? We can summarize all of the main methods a lease company makes money on your transaction in three categories : interest rate charged on the lease , any tax benefits that might come from the financing, and finally, the re-leasing or sale of any equipment that comes off lease or is returned .

Those are pretty key basics, but there are probably 20 other methods in which your lease is ultimately recorded as a profitable deal. Let’s look at some of those areas in which you can have a direct negotiation or input on.

If your supplier is getting paid in advance your lessor will want to confirm they are ok with that – what you need to do at this point is ensure that the agreed upon financing in this interim period is clear and acceptable to yourself . Additionally many lease companies offer, or have alliances with firms that provide asset insurance. We totally agree that insurance is a requirement, after all the lease company has to ensure the collateral they are financing is there of course. But you should ensure that the insurance is fairly priced.


Quite frankly we recommend to clients that they contact their own insurance broker and provide the lease firm with a certificate of insurance with the lease company named as loss payee. That’s a cost effect method of addressing this issue, with you as the lessee still being in control.

Documentation and filing fees have continued to be standard in the Canadian equipment financing and leasing industry. Typical charges for this tend, in our experience to be in the 250-300$ range. Anything more excessive than this should be questioned. These charges cover the preparation and registration of lease documents under the governments Personal Property and Security Act regulations.

In general we are not if favor of clients paying commitment fees to get a lease transaction done – however we temper that by saying that if your transaction is very large and requires a significant amount of due diligence, credit investigation and analysis, then these fees we feel are sometimes justified . Ensure they seem reasonable Vis a Vis the size of your transaction.

In summary, the profits made by your lessor should be legitimate – profits vary based on your firms overall credit quality, the size of the transaction, and the amount of time needed to consummate the transaction by both parties. The difference may not always be in the interest rate you are receiving, and we tell clients they actually get to pick their own interest rate – simply because your firms overall credit quality has determine your general price structure as the leasing industry in Canada is very competitive.

Confused about how you can control your lease transaction and the profit made by your lessor? Speak to a trusted, credible and experienced leasing advisor with a track record of business finance success who can guide you through key aspects of a successful lease negotiation.






7 Park Acvenue 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

Quick Tips to Help You Find the Best Equipment Financing Company

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Important  Things You Need to Know About Equipment Financing

Equipment Financing in Canada is a specialized type of financing. Lease financing on its own goes back hundreds of years and is a widely accepted financing tool. Major companies in Canada utilize lease financing, why shouldn’t your firm.


Lease financing covers all sorts of equipment – that includes production equipment, transportation equipment, machine tools, computers, etc.
Heavy equipment financingis a popular category in this segment, for both new and used assets . In general most Canadian banks do not offer lease financing, although two of the Chartered banks have dedicated lease operations but require a very high quality credit quality.


You should consider leasing because it’s a simple to arrange financing agreement between yourself, your vendor of the equipment, and the lessor. Leasing should not be considered complicated, however Canadian leasing practices and the parties that participate are much different than in the U.S. . . . It benefits Canadian business owners and financial managers to ensure they understand why leasing is so popular.

Equipment Leasing and Financing Options

Two basic types of leases are available for the Canadian business owner – they are capital and operating leases. Operating leases are often promoted by manufacturers or vendors and they often include maintenance and insurance. You should consult with an Equipment financing specialist to ensure an operating lease is right for your firm.


The essence of an operating lease is that your intent is to use the equipment, but not to own it. When you enter into an operating lease ensure that you have no intention of owning the equipment at the end of term. In this case your payments will be much lower than if your intention is ownership, and you will have the benefit of some balance sheet improvement, as this lease is not shown as debt on your balance sheet. The alternative lease is a capital, or financial lease, which denotes ownership.



We can’t over emphasize the need to work with a trusted, experienced and credible advisor in this specialized area of financing in Canada. An equipment financing specialist will help you maximize the benefits of lease finance when it comes to acquiring assets, new or used, for your business .Seek out a professional that will assist you in acquiring the equipment you need and answer any questions you have about the proper rate, term and structure that your firm deserves based on overall credit and asset quality.


Equipment can be new or used, and a good lease financing specialize will be pleased to assist you in maximizing the benefits of lease financing, which include:

Simple Ways to Benefit From Lease Financing

1. Better use of working capital
2. Saves cash - often eliminates down payments
3. Often cheaper than a term loan  
4. Faster and convenient re application time/process 
5. Wont restrict your current banking arrangements  
6. Payment flexibility  
7. Pays for equipment out of before-tax savings rather than after-tax profit  
8. Financing Leverage - leaves normal bank lines undisturbed  
9. No ownership dilution  
10. Fixed rate financing in today’s low interest rate environment.

Specialists in any industry are a benefit. Consult a lease financing specialist for your asset acquisition needs. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist your with your capital needs.

Canadian Equipment Financing . When And Why To Consider Business Leasing Companies For Funding Your Corporation

INFORMATION ON EQUIPMENT BUSINESS LEASING IN CANADA

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Equipment financing in Canada. Let's discuss when... and why you should utilize business leasing companies for Canadian asset finance.

The motivations behind equipment leasing in Canada vary by client. The reality is, and many don't look at it this way, is that the motivators are actually economic and non economic, depending on the circumstances within each client. We find that many are surprised to hear that banks and insurance companies utilize lease finance on a very significant basis. Our clients can be forgiven when asking ' why would a Canadian chartered bank, with all the cash in the world (or at least most of it ! ) consider business leasing companies for their asset acquisitions?

Clearly it’s a case of non- economic for them, they rely on this method of asset acquisition as a way to address areas such as the ability to control technology for example, in their computing and telecom needs.

The equipment leasing industry in Canada is exceptionally robust and competitive this day. We actually think half the battle knows which firm, or advisor will best suit your various needs when it comes to pricing issues, cash flow structuring, accounting and tax implications, etc.

Again, the Canadian business owner and financial manager can be forgiven also for not knowing where to turn to when it comes to the various firms that have specialization in small ticket transactions, medium sized deals, and lease financing transactions in the multi million dollar ranges. It goes without saying that no one firm can be all things to all business. That is for sure.

The actual economic of why your firm leases, and when it leases are critical. You have to be in a position to have done, or be willing to do, some analysis on what aspects of equipment financing are most important to your firm. The bottom line? It's that you need to figure out what’s important to your company, whether its cash flow management, payment seasonality, tax benefits, the ability to ' refresh ' assets, and in many cases bundle in all sorts of other costs such as delivery, installation, maintenance / support, etc. It is then you are in a position to move forward with your equipment finance strategy.

What are then some of the other key points when it comes to why you should consider working with business leasing companies?

Those other points to consider might be as follows: You want to be in a position to match cash outflows with the useful life of the asset. In telecom and computing that is critical. In other cases it might be of primary importance to achieve a low lease rate inherent in the transaction - when benchmarked against your own firms cost of capital this alone is a solid reason to finance via lease.

If you are in a medium sized or larger firm the way your management is measured might make it a great idea to lease assets, as EBITDA and ROI calculations might factor into your managements or owners compensation criteria. That’s not our favorite, but it's a reality!

New accounting rules in place might make it more difficult these days to achieve true off balance sheet financing - but just the lower rates and monthly payments in an operating lease, plus the ability to return, upgrade or extend alone still make this option feasible and viable for your firm .

So we guess it's all about timing, knowing when and why your firm should utilize equipment financing from Canadian business leasing companies. Speak to a trusted, credible and experienced Canadian Business Financing advisor who can assist you to achieve maximum use of those ' when' and ' why ' criteria.






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

Equipment Financing Companies . Must Know Info On Business Lease Finance

Watch Where You Step When It Comes To Assessing Asset Finance Solutions In Your Business

OVERVIEW – Information on equipment financing companies in Canada . What does the owner/manager need to know when it comes to business lease finance for asset acquisition purposes


Equipment financing companies in Canada. We maintain that when it comes to a business lease for asset financing there is certain information on this subject is ' nice to know ‘, while in other situations its absolutely critical to your asset finance success - i.e. you need to know this ! Let's dig in.

Business owners and financial managers should always understand that just about any asset, even intangibles such as computer software as an example, can be lease financed.

When it comes to the asset financing decision its all about short and long term decision and that timeframe can be all important to your financing success. More often than not the majority of equipment leases in Canada tend to be in the 3-5 year range. These are typical terms when it comes to plant and equipment.

It might, but should not, come as a surprise that some of the largest asset lessors in Canada are manufacturers themselves. They compete with independent commercial finance companies to finance their own equipment - bring incremental profit and additional sales opportunities into their picture.

While we are big proponents of equipment finance we're the first to admit that on occasion terms such as ' 100% financing ‘, etc are somewhat over used by the industry . More often than not down payments of security deposits of some sort are required, especially if your firm is not ' investment grade ' when it comes to credit quality.

Canadian business owners and finance managers like leasing because it’s a simplified process when it comes to asset acquisition. Your firm simply negotiates the type and price of a business asset and the leasing company buys the asset, on your behalf, from the manufacture or distributor. It’s, as we have said, a solid alternative to equity financing or long term debt on your balance sheet in the form of term loans.

Not all acquirers of business assets are familiar with operating leases. A simplified way of looking at these transactions is simply that you should consider them as ' service ' type leases.

What then are the advantages of operating leases? There are several , they include the fact that the leases are not fully amortized so even with interest built into the transaction you quite often are not paying even the full amount of the value of the asset .

How can that be, ask our clients? Simply speaking it’s that the lessor is making a bet on the useful economic life of the asset when you return operating lease assets at the end of the term. The lessor hopes to sell or re-lease the assets under your operating business lease. So there, the secret is out!

If there is one both beneficial and creative aspect to equipment financing companies offering operating type leases it's that they allow you a lot of flexibility during and at the end of term of the transaction. Your firm has the ability to return, upgrade or even buy the asset at mid or end of term. Now that’s flexibility!

Capital leases are the opposite. They are fully amortized, cannot be cancelled, and the interest rate clearly defines the lessor profit to which they are entitled. (Hopefully it’s a ' reasonable ' profit!)

Equipment financing companies will also consider sale leaseback transaction. You take assets you already own and sell them to the lease firm, typically to enhance your working capital or cash flow needs. We have even seen our own chartered banks sell their bank towers in downtown cores, freeing up millions in capital for the banks themselves.

As we have said, there’s ‘nice to have ‘and ‘need to know ‘when it comes to business lease finance via Canadian equipment financing companies. Seek out and speak to a
trusted, credible and experienced Canadian business financing advisor who can assist you in completing a transaction that benefits your company.

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 :

7 PARK AVENUE FINANCIAL = BUSINESS LEASE EQUIPMENT 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