Secrets of Dealing With Equipment Leasing Financing Companies

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Information for Canadian owners and business managers regarding dealing with equipment leasing financing companies. What are the rights and obligations of the lessee, and how does effective research into a good lease partner yield effective financing results

What's my rate? Are we approved? What are my rights and obligations under this transaction? What's the capital of North Dakota... oh sorry, forget that last one..!

And on it goes... these are just some of the many questions that clients ask us when they are looking for assistance in sourcing and negotiating equipment leasing and working with financing companies in that regard. We do acknowledge it's a big challenge sometimes - the Canadian marketplace is a bit different than its counterpart in the U.S. The finance industry is fragmented, and business owners and financial mangers absolutely could not be expected to know the credit appetite, the asset appetite, and the structuring options available from literally hundreds of firms offering lease financing.

Let's share some ' secrets' and tips around ensuring you can be successful in your equipment financing strategy. First of all, different strokes for different folks - what do we mean by that? Simply there are number of very well published ' equipment leasing benefits ' offered by finance firms. Do they all apply to your firm? Probably note, so focus in on understanding which benefits of lease financing work for you, and then... maximize them! Through effective negotiations.

For the record those benefits usually include payment structuring to your cash flow, tax advantages, upgrade and return options, and simply being an alternative to traditional debt and loan negotiation. Oh and we forgot one other key benefit, its generally recognized that lease financing credit approval is significantly easier to obtain than bank term debt or other loan mechanisms of a more traditional nature.

Psst... Want to know another secret. Here's a good one, that almost no transaction is too large or too small for the Canadian equipment financing market. So, if it makes sense to lease a 2000.00 photocopier consider it, and if you're buying a corporate jet for 3 Million dollars, there is a lease approval for that asset also.

If there is on obvious secret or tip that most owners miss it's simply that when it comes to any type of ' technology ' you should consider equipment leasing with financing companies that are knowledgeable about the asset. We are mostly talking about computers, but the tech universe today covers telecom, and many other types of assets. Technology changes, tech assets depreciates very quickly, and the best kept secret in town is often a technology operating lease, allowing you full use, but not ownership, of the asset.

Many clients seem confused by the ' lingo' used by financing companies. You can be forgiven for not knowing ' off balance sheet leasing, residuals, fmv, all in rate, amort, ' etc, etc etc. So the best and final secret we can probably provide for you is simply to search out a trusted, credible, and experienced Canadian business financing advisor who will help you identify priorities and finalize equipment leasing success for your asset acquisitions.

Oh and by the way. Bismarck. That's the capital of North Dakota.

Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 13 years - Completed in excess of 100 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 & Contact Details :

http://www.7parkavenuefinancial.com

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


' 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/5349946

Why The Equipment Lease Bravely Steps Up : Leasing Company Solutions Help Acquire Assets

Getting It Wrong Is Not An Option When It Comes To Asset Lease Finance

OVERVIEW – Information on what key concepts business owners and financial managers must address when constructing the right equipment lease with their chosen leasing company solution provider

Equipment lease solutions aid in acquiring assets. Simple as that. It's a solution that's used by a majority of businesses in Canada and the U.S. alike. But can you ' get it wrong ' when it comes to a leasing company choice. In some cases any mistake in financing an asset properly costs your firm time and money. Let's dig in.

Whether you're a public company, a government entity, or even a start up it's still important to give serious attention to how you're leasing and asset, who you are dealing with, and the rights and obligations you have in leasing equipt. in Canada.

Leasing is all about cash flow conservation, so some solid cash flow planning around projected monthly payments relative to the useful life of the asset.

Naturally no form of Canadian business financing is ' all inclusive ' and works all the time - so yes, alternative options do exist. They include loans or rentals, although rentals are in effect a form of the ' operating lease ' solution.

Picking the right term is critical as it relates to our cash flow mention, as well as being able to accurately determine the life of the asset. While longer term/amortizations are available typical lease terms are 2-5 years in Canada. Certain heavy equipment/aircraft/production equipment etc lends itself to much longer terms potentially.

It seems our clients always only want to talk about ' rate' ' interest rate' considerations on any transaction. That's all well and fine but the actual terms of the lease as well as type and structure are considered much more important by experienced lessors. At the end of the day your overall business credit quality (or lack thereof) will take care of the interest rate question, if only for the reason that the industry itself is very competitive these days!

It's that competitiveness that will allow you potentially negotiate critical customer concerns such as down payments that might be required, the dreaded ' personal guarantee', or end of term options such as upgrading, returning, extending the lease .

Many of our clients we initially talk to don't fully understand that ' capital lease' (i.e. lease to own) solutions are known as ' hell or high water ' contract, requiring you to make all the payments under the lease - i.e. no early terminations, etc.

Who in fact offers lease finance solutions in Canada. You'd be surprised at the number of players; they include some of our Canadian chartered banks, independent commercial lease firms, captive organizations within certain large manufacturers, and niche players. In some cases your lessor might be 100% Canadian, in other time it might well be a subsidiary or division of a U.S. organization. (Not that there's anything wrong with that!)

So is there any one way to guarantee you are aware of and selected the right lease structure and lessor? One possible solution is to seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can ensure ' getting it wrong ' is not the option.




Stan Prokop - 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 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN EQUIPMENT LEASE FINANCING EXPERTISE






Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
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


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Canadian Do It Yourself Equipment Lease And Loan Advice – Commercial Business Financing

What caught our eye the other day in a U.S. based article was a title that screamed ' What's hot in Equipment Lease and commercial business financing '. The article went on to say that a large number of industries were totally back to using lease loan type financing for their asset needs.

But hey, this is Canada, so let’s try and make some sense of whats happening in equipment finance ' up here ' and how Canadian business owners and financial mangers can reap those same benefits.

Have you ever wondered what the most popular types of equipment are when equipment lease financing is utilized? In general the categories or industries that use this type of financing most are the following: Medical equipment, oil and gas assets, machinery tools, trucks and trailers, construction, and yes airplanes - clearly most aircrafts are financed!

It’s safe to say that if your company is in any of the above industries it might be advisable to jump on board, but the hard core reality is that lease financing and commercial business financing leases and loans can be utilized for any type of business asset. And when that asset creates revenues and profits for your firm a lease finance firm wants to be your financing partner.

Two key areas of equipment financing mentioned in the U.S. article were operating leases and used equipment valuation. It's been a tough couple years for all industries, and during the 2008-2009 but it is much easier these days to get used equipment financing, an appraisal or some type of valuation might be required.

As a Canadian business owner your perspective on asset acquisition probably constantly changes - you are wresting with general economic conditions, tax and accounting issues, and competitive pressures.

Can you actually be a ' do it yourselfer' in equpment lease business financing? We're the first to suggest expert assistance often helps but the bottom line is that many Canadian business owners are more sophisticated than ever when it comes to understanding the benefits of lease finance.

As a lessee you should be prepared to make a strong case for rates, terms and structures you think you deserve - this involves being informed about the general Canadian commercial equipment business financing market and then making smart choices when it comes to managing your working capital via this type of financing. Conserving your capital and cash flow , leaving your other borrowing power intact, and focusing on 100% financing of the asset will make you a do it yourself expert in asset finance .

Not 100% comfortable in working your way through types of leases offered, who are the players in the Canadian market, and structuring transaction that work from a cash flow perspective ? No problem? Seek out the services of a credible, experience and trusted Canadian business financing advisor who will assist you in your goals.


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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

How Can My Canadian Company Sell Or Remarket Equipment That Was on an Equipment Lease and is Not Required

Lease financing continues to be one of the major methods of equipment acquisition in the Canadian business environment. Business owners and financial managers of Canadian firms often with to replace older equipment with newer technology, and that can be of course anything from shop floor equipment to computers.

So what does the business owner do with equipment that he currently owns that was on a lease that has come to end of term? That equipment needs to be disposed of in an efficient and economic matter.

As a business owner you want to dispose of the equipment in a method that gives you the highest price while at the same time minimizing your expenses around that entire process. Back at the leasing company this entire process has an industry term, generally known as 'remarketing '.

In order to begin the process you need to look at a couple ' big picture ' scenarios - namely what do you currently believe the equipment is worth, and is there any sort of demand out in the market place for the equipment. If there is some solid sense that the situation can be advantageous in value to your firm ( we wouldn't recommend remarketing 1990 DOS based PC's..!) you need to asses what sort of costs will be involved and who in your firm will be primarily responsible for the divestiture.

So what's one of those 'bottom lines'? It is of course, what is the asset worth, and how do I determine that. Many industry publications for the asset type might provide you with a 'black book 'residual value on the equipment - that is similar to the 'black book 'we hear about at a car dealer's lot. Clearly this sort of number is only a guideline, as a lot of factors now come into play, like technology obsolescence (think computers!) as well as maintenance if in fact maintenance was applicable.

When you are looking at a disposition number that is reasonable you are in fact looking at three different numbers. Let's clarify that comment. You are looking for a number that matches the three industry terms -

FMV

OLV

FLV

Confused?? It's not that bad really. FMV stands for fair market value, and is a broad term which simply says that is it the price that a reasonable buyer will pay with no time constraints and some good market activity. It's quite comparable to selling your house and determining with the realtor what the current market will bear.

OLV is Orderly Liquidation value, and is essentially the auction process that might be held by you, an appraiser, or an auctioneer. The asset is put up for sale, and given current market conditions, is sold at highest bid.

FLV is forced liquidation value, and that is, from your perspective, kind of the ugly number - the asset has to be sold, it has to be sold tomorrow, who will give me what for it immediately, etc!

So the bottom line is we like FMV, we don't like FLV as the current asset owners.

Again, using our house analogy as an example you need to do some research into recent sales, that is of course because it gives you a ' comparable '. Your market research should come from both vendors and manufacturers and resellers of that type of asset.

In summary, disposing of a major off lease asset is a defined process. Care needs to be given to current market conditions and several industry terms revolving around the potential type of sale you will ultimately agree to. Successful completion of this whole process will allow you hopefully to enter into a new Equipment Lease financing transaction for assets to help your firm's growth and profits!

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www.7parkavenuefinancial.com

We finance the little guy - P.S. We finance the big guys also!

What You Must Know About A Lease Vs Buy Business Finance Decision For An Equipment Lease

Business owners and financial managers in business finance are always faced with the same decision in acquiring an equipment lease, namely should we buy or lease. Technically this is referred to in the finance books as the infamous ' lease vs. buy 'decision.


Let's examine some of the key points and facts you need to consider in that decision. Naturally the good news is that an equipment lease can be used to acquire almost any type of equipment or asset - that includes equipment, machinery, buildings, etc. More often than not it pays to seek a business financing advisor who is well versed in the benefits and nuances of equipment finance.

Working capital and cash flow tend to be the main drivers of the lease vs. buy decision when we talk to clients. It goes without saying that most Canadian leasing companies probably have a lower cost of capital then your firm based on their borrowing capacity and the way they are funded. Therefore that lower cost of capital becomes a positive advantage in the lease vs. buy decision.

In many cases the lease vs. buy decision will be very close and the actual non financial benefits of an equipment lease will drive your final decision. For example, although you might be in a position to construct a favorable buy versus leasing model you might not want to use business lines of credit to access the cash needed to acquire the asset.

Also one of the key tenets of finance is that you should use long term funds to fund long term assets - that just makes common sense. Simply speaking you don’t want to purchase an asset as opposed to l easing it and find out you might not be able to make payroll on Friday because your line of credit is maxed out!

As we said, some of the pure mechanical decisions around the lease vs. buy tool (there are numerous on line calculators which are references as lease vs. purchase analysis tool) can often be over ridden in your analysis by non financial considerations. For example, let’s say you clearly don’t want to keep the asset at the end of the term of its useful economic life. That’s where an equipment lease makes total sense, as it gives you the ability to return, extend, or even purchase the asset if in fact you end up deciding to purchase and keep it if your circumstances change.

Business owners might want to consider talking to their accountant or a business financing advisor on larger capital asset acquisitions. Some of the inputs required in the lease versus buy model include items such as the actual interest rate the lease company is charging you, your tax rate, the projected increase in profit via use of the asset, the depreciation expense you can take on the asset and your overall cost of capital which is calculated by analyzing your debt and equity in the business. Whew!! That’s some fancy accounting and it can best be left to your accountant or advisor on larger asset financing acquisitions. However the good news is that a simple computer spreadsheet handles all this for us nicely!

In summary the leasing versus buy tool in business finance can be a great asset in your financing decisions for new assets. Adopt Warren Buffets key approach, which is simply to determine if the asset financing opportunity delivers a solid return on equity for your business.

Yes our tool we outlined is important, but at the end of the day use business common sense to analyze the equipment lease opportunity and blend it into your overall business financing strategy .

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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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details:
http://www.7parkavenuefinancial.com/business_finance_lease_vs_buy_equipment_lease.html