How to Get Your Canadian Business Equipment Financing Lease Approved

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Here's The Answer To ' What's My Rate "?!

Information on equipment lease rates in Canada. Leasing rates don't have to be an unknown factor in strategies for business loans and asset acquistion. Here's why !

'What is my rate?' is a question I am often asked by customers when they work with us with respect to equipment and lease financing. They are surprised when I tell them that they get to pick their own rate! (All customers want the lowest rate!)

I am not trying to be facetious when we make that statement. What we are saying is that the over all credit quality of a customer, as perceived by the lender ( that's important!) is in fact set by the customer, thereby driving a final approval on rate, term and structure of the proposed financing request.

The role of the customer, or their trusted advisor is to understand the basic credit information requirements and how the overall risk to the customer and their industry will be perceived by the lender. The irony of a lot of business leasing is that the industry for the most part used historical analysis to project future ability to pay. That is a difficult concept for the customer to handle more often than not - as an example the customer may have lost some money last year, driving a negative cash flow figure. Prospects have improved, new orders are coming in, and yet the business has a problem in getting new financing.

The customer needs to ensure that the information and ' story ' make the transaction become more ' approvable'.

Critical categories in the information submission by the company are as follows:

Length of time in business
Personal credit history of the owners
Relationships with other financial institutions
Quality of the financials (Some customers submit balance sheets that don't balance!)
Additional collateral available if necessary
Summary of key financial info such as depreciation, cash flows
Positive focus on management and its background and experience

If the customer is qualified to make such a submission a solid package as per our list noted above should lend itself towards an approval at current market rates and structures. If the customer feels they are not properly qualified to make such a submission they are strongly encouraged to used a qualified intermediary who knows the industry and, more importantly, knows the specific weighting given by a lender to the above noted submission requirements.

The amount of information required around each component is more often than not determine by the size of the transaction or the lenders total exposure to that customer. In many cases small ticket transactions (those under $ 25,000.00) are adjudicated via a credit application and public reporting sources such as Equifax or Dun and Bradstreet. Typically 60-70% of all small ticket transactions are approved.

In summary, customers who want to get a prompt and of course positive lease approval should focus on providing a clean package of required information that will ensure a prompt approval based on specific industry requirements around the transaction size and asset type. Knowing that the lender will focus on future potential of the firm, the management experience, and the collateral asset are valuable data points for any business seeking a business equipment financing lease.



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 10 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/3428649

Business Financing In Canada : Leasing Finance Delivers Asset Acquisition Success

Old School or New School ? Financing the Assets you need in your business !

Information on leasing finance and equipment lease rates and approvals in the Canadian asset financing industry . Business financing includes the need for business owners/financial managers to understand their asset acquisition alternatives

Business Financing In Canada . Are you 'old school' or 'new school' when it comes to leasing finance in Canada. We've always thought there is nothing wrong when it comes to being ' old school ' sometimes when it pertains to business. (In hindsight we would have been a lot smarter in the Dot Com era!).


However, when it comes to maximizing the benefits and business financing availability for equipment lease rates and solutions we are categorically recommending a ' new school ' attitude. Let's dig in.



Trends now show that leasing assets in Canada often approaches 80% of all asset financing in Canada. So why is that the best choice? And are you too late to get into the game? We don't think so - so let’s try and prove to you how you can adopt a more positive asset acquisition strategy when it comes to acquiring your business assets. And by the way, those assets cover everything under the sun these days; including software, computers, rolling stock for your fleet, production equipment... you name it.


The key to being successful in leasing an asset in Canada your ability to have a solid understanding of the lay of the land. What does that do? It allows you to leapfrog barriers, and that’s a good thing.


And when it comes to understanding that ' lay of the land ' you really have only two options - the first being to become an expert yourself, and the other is to rely on expert guidance from an experienced business advisor - and more often than not that advice is ... FREE!


The actual ' boring ' part of lease financing in Canada might in fact be the documentation that comes with your transaction. And some lessors do a great job of keeping this area of the industry boring, and complex... stuffed with all sorts of ' legalese '. Thats why its often critical to take a bit more time on the ' terms ' conditions of any transaction, no just those equipment lease rates which often seem so all important to clients.


Just picking correctly one of the two leas options types that are available to your firm can make you quite ' new school '. And that decision is often not as hard as you think - your choice is simply a ' lease to own' strategy, or a 'lease to use ' strategy. Respectively they are called capital leases and operating leases. So when it comes to the numbers those two lease types can dramatically change monthly payment, lease obligations at end of term, tax and balance sheet treatment, etc.


When you understand your options in lease finance in Canada you clearly have the ability to become ' new school '. When you understand the many advantages of asset financing this solution becomes the de facto alternative for acquiring assets for your company.


Which School Do You Attend When It Comes To Leasing Finance ? Old School Or New School ? It’s Not Too Late To Become New School In Canadian asset finance . Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in your departure from ' old school '!




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 - 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

Equipment Lease Rates . How Your Leasing Company Prices Your Transaction

Get Rid Of That Clear As Mud Feeling Around Leasing Companies In Canada


OVERVIEW – Information on equipment lease rates in Canada . Knowing how the leasing company prices your asset financing transaction is a critical aspect of equipment finance success.


Equipment lease rates in Canada via a leasing company sometimes seem to provide clarity that is... well... clear as mud!

So let’s examine some key issues that allow the business owner and financial manger to achieve solid lease pricing based on the asset type and credit quality of their company. And trust us... there is a leasing solution for every type of credit quality from blue chip to ' bad credit ' scenarios.

While most business people associate the lease pricing ' only ' with the actual interest rate on the transaction

numerous other issues need to be covered off.

As a starter you need to have a good handle on what is known as ticket size in the industry. Three types of asset or ticket size dominate the Canadian industry. They are small, mid and large - no real secret there. But each of the companies that service that industry has different credit profiles that dominate how they price your transaction. Small transactions under $50,000.00 can be approved and priced within hours, rarely more than a day. Larger transactions are subject to a lot more analysis and documentation as we can imagine.

The actual documentation of each of our three ticket sizes varies and has price implications. Pricing can sometimes be affected by usage, maintenance requirements, and return language. All of these are key elements of the leasing company might price your transaction, many time with no discussion with yourself, as it affects your transaction.

Higher rates actually are many times associated with small deals, which may seem like a mystery to the business owner and financial manager. One simple reason is that while these small deals are approved quickly they have less credit due diligence associated with them - as such the lease companies have higher losses in this area - which of course affects overall pricing . If we are making one point it's simply that you need to understand which companies service which ticket size - because that is what reflects your final pricing.

Generally shorter term lease arrangements are never less than two years. That is because your lease company has also borrowed their funds, probably from a bank or insurance company, and they are striving to get a reasonable yield and profit.

Part of the whole exercise in lease pricing revolves around the ' lease vs. buy' scenario. That’s where you the business owner/manager should spend some time evaluating leasing as an alternative. If you're uncomfortable or experienced with that process your accountant or a Canadian business financing advisor can assist you in wading through cash flows, term loans as an alternate option, etc

As we said previously the business person tends to only associate the implied interest rate on the deal as the pricing determinant. But other issues to consider are:

Tax / Accounting implications
Down payments
Upgrade formulas that change the rate
Excess usage charges
Operating lease price implications

So, is it always about the ' low monthly payment '? Definitely not! Seek out and speak to a trusted, credible and experienced Canadian business financing advisor as to how equipment lease rates via your leasing company work... against you... and for you!

7 PARK AVENUE FINANCIAL
CANADIAN LEASE FINANCING SOLUTIONS AND 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 :

http://www.7parkavenuefinancial.com/equipment-lease-rates-leasing-company.html





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

Which School Do You Attend When It Comes To Leasing Finance ? Old School Or New School ? Equipment Lease Rates And Approvals In Canada

It’s Not Too Late To Become New School In Canadian Asset Financing


OVERVIEW – Information on leasing finance and equipment lease rates and approvals in the Canadian asset financing industry .




Are you 'old school' or 'new school' when it comes to leasing finance in Canada. We've always thought there is nothing wrong when it comes to being ' old school ' sometimes when it pertains to business. (In hindsight we would have been a lot smarter in the Dot Com era!

However, when it comes to maximizing the benefits and business financing availability for equipment lease rates and solutions we are categorically recommending a ' new school ' attitude.


Trends now show that leasing assets in Canada often approaches 80% of all asset financing in Canada. So why is that the best choice? And are you too late to get into the game? We don't think so - so let’s try and prove to you how you can adopt a more positive asset acquisition strategy when it comes to acquiring your business assets. And by the way, those assets cover everything under the sun these days; including software, computers, rolling stock for your fleet, production equipment... you name it.

The key to being successful in leasing an asset in Canada your ability to have a solid understanding of the lay of the land. What does that do? It allows you to leapfrog barriers, and that’s a good thing.

And when it comes to understanding that ' lay of the land ' you really have only two options - the first being to become an expert yourself, and the other is to rely on expert guidance from an experienced business advisor - and more often than not that advice is ... FREE!

The actual ' boring ' part of lease financing in Canada might in fact be the documentation that comes with your transaction. And some lessors do a great job of keeping this area of the industry boring, and complex... stuffed with all sorts of ' legalese '. Thats why its often critical to take a bit more time on the ' terms ' conditions of any transaction, no just those equipment lease rates which often seem so all important to clients.

Just picking correctly one of the two leas options types that are available to your firm can make you quite ' new school '. And that decision is often not as hard as you think - your choice is simply a ' lease to own' strategy, or a 'lease to use ' strategy. Respectively they are called capital leases and operating leases. So when it comes to the numbers those two lease types can dramatically change monthly payment, lease obligations at end of term, tax and balance sheet treatment, etc.

When you understand your options in lease finance in Canada you clearly have the ability to become ' new school '. When you understand the many advantages of asset financing this solution becomes the de facto alternative for acquiring assets for your company.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in your departure from ' old school '!

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 :

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

Interested In Why Equipment Lease Rates And Low Leasing Payments Might Not Be Important ? !

Wouldn’t You Like To Understand The Pricing Game In Asset Leasing?



Information on the key factors regarding equipment lease rates. Are low leasing payments the most important factor in asset financing . Maybe. Maybe not.





You tell us, because we sure don't know. We're talking about equipment lease rates, and why clients are almost always under the distinct impression that the concept of a ' low payment ‘ or a ' great rate ' via leasing finance in Canada is their sole focus .

We recently came across some great information on that very subject, so let's try and put that in perspective from the viewpoint of the Canadian lessee and in the context of lease finance in Canada. (It differs considerably from the U.S.! via types of leases, market players, etc.!)

If there is one major point we're trying to make its simply that many Canadian business owners and financial managers don't quite understand the difference between pricing, the proverbial ' low monthly payment ‘, and the element of ' structure ' in an equipment finance transaction.

One key factor in the concept of lease rates and pricing , and we can forgive clients for not addressing this, is the fact that many borrowers don't address the end of the lease term with the same focus as all the due diligence and effort they put into getting a lease transaction in place.

The end of term option is critical when assessing equipment lease rates, and never moreso if you are focusing on an operating lease as opposed to the alternative, the capital lease, aka ' lease to own.

Naturally the asset at the end of the lease term has value, and structuring your lease properly will significantly enhance the value of that asset to either yourself, or the lessor. (We’re on your side, ie the lessee, by the way!).

The majority of lease leasing of assets in Canada is under and unregulated financial services. So it’s up to you to determine what amount of information you need to achieve your asset financing goal.

Here’s the $ 64,000.00 question. Do lessors in Canada tell you what your options are at the end of a lease term in a proper manner, allowing you to plan in advance on asset disposition, re-financing, return of equipment, etc? We assure clients (because we've been there) that major corporations spend a lot of time on their leased assets portfolio, reporting, etc. It's in that management of the equipment lease that thousands of dollars are saved, or lost.

We talked before about how equipment lease rates and the concept of a ' low payments ' is often intermingled with other issues forgotten or not known by the lessee. What are some of those other issues?

Naturally the actual interest or borrowing rate drives a significant part of the transaction, but other factors include any payments you make in advance, including security deposits. Also, they way you structure your payments or cash flows ultimately affects the lessors yield and your overall pricing. We're spoken of the residual value at the end of the lease, particularly when it comes to operating leases, as well as other structures such as a bargain purchase option.

So, complicated? It could be if you let it. But our key take away today is simply that you should consider leasing and that ' low monthly payment ' in the context of many other factors that drive a lessors profit on your borrowing via a lease financing transaction. Speak to a trusted, credible and experienced Canadian business financing advisor about why that ' low rate ' you're looking for might not be the most important factor in asset finance.




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_lease_rates_low_payments_leasing.html

Which Of The 3 Equipment Lease Rates Would You Choose ? Canadian Capital & Operating Lease Payments Explained!

Canadian Equipment Lease Rates – the truth!


Information on equipment lease rates in Canada . How are lease payments calculated on both capital and operating lease scenarios . Which type of transaction has the best payment structure for your firm?



OK. Quick test. Here we go. Let’s test your knowledge about equipment lease rates, payments... as they appear to be, and how those payments look in capital and operating leases in Canada.

Let’s assume you have a $ 150,000 transaction - you are looking for a 4 year lease term, and you are being offered three lease payment choices. Those choices are:

$3637.00
$3108.00
$3373.00


So, now the test. Are you ready. Which payment do you choose? The answer. All three transactions are essentially the same! Its just that the type of lease you choose and how Canadian equipment lease finance companies show you that payment is really where you can save, ( or by the way , lose) thousands of dollars . Let’s explain.



First of all, threes a huge difference in the types of leases being offered to Canadian business owners and financial managers in Canada. We're actually quite lucky because the U.S. leasing industry is populated by all sorts of leases, the names even make our eyes roll, and we think we're somewhat of an expert. They include Trac leases, synthetic lease, non leveraged lease, etc.

But, we're Canadians, eh?! So we keep it simple, and for the most part you only have to choose between two types of leases in Canada, capital and operating. Its the equipment lease finance industry in Canada that sometimes tries to make even these two scenarios complicated - its our job to keep clients decisions simple, and, oh yes, understandable !

Once you have a handle on the two types of leases, and some of the ' games ' albeit legitimate that lessor tend to play you should consider yourself fully armed with respect to getting leasing payment and equipment lease rates for those two basic scenarios ; capital, which is ' lease to own', and operating, which we call ' lease to use'!

When you enter into a capital lease you have made the decision to own an asset at the end of a typically longer lease term. In Canada that is anywhere from 2-7 years, although the most typical lease terms are three years and 5 years.

Operating leases on the other hand tend to be 2-3 year terms, and the reason why is that some of the technical and accounting calculations needed to make an equipment finance lease work from an operating perspective require the calculations to be on a shorter term. But that’s ok, because its assets in an operating lease that tend to be upgraded, returned, remarketed by you or the lessor, etc.

We encourage clients to think of their lease financing needs in terms of both financial reasons and operating policy reasons. All sorts of issues come to mind when you are leasing assets in Canada, not the least of which is getting approved! Other issues such as budgets, payment flexibility also come to mind.

Oh, and back to our opening question, which would you choose again. The first calculation is a standard lease with no obligation at the end of the 48mo term. The 2nd transaction is a slick trick, and actually useful financial strategy, which is providing you with a purchase option at end of term. You can pay or extend typically. And the final is an operating lease, same asset and term, but with a 15% residual investment by the lessor.

A bottom line? As always, speak to a trusted, credible and experienced Canadian business financing advisor who can help you wade thru the myriad of equipment lease rates and structure in a common sense manner 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 :



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

What You Need To Know About Equipment Lease Rates and Interest Finance Charges In Canadian Lease Finance

Are You Getting The Best Lease Finance Rates ?


Information on equipment lease rates and finance interest charges in Canadian leasing and financing . Factors and issues to consider for a transaction that makes sense for your business .



Although the Canadian equipment finance industry is very competitive many Canadian business owners and financial mangers don’t fully understand how equipment lease rates and interest finance charges are calculated... how they can be managed, and what issues affect your ultimate monthly pricing. Let's examine some ' need to know ‘points that will allow you to fully maximize the benefits of lease financing assets in Canada.

We don't blame clients for always wanting ' the best deal ‘... the ' lowest rate '... the ' smallest monthly payment ‘. Some of the variables that go into those issues are controlled by the lessor; some can easily be managed by you.

Asset quality is often a factor in Canadian lease finance. The ability of either yourself of the lessor to understand the ongoing value and the final residual value of the asset you are financing plays a key role in equipment finance pricing in the Canadian marketplace. A win win situation exists of course when both you and the lessor have a transaction that meets both of your needs.

Lessors refer to their profit on a transaction as their ' yield '. Many lease finance firms strive to earn a certain constant yield on their lease transaction they finance for Canadian business. It’s simply their ultimate profit for putting funds out on your transaction.

Canadian business mangers choose from only two basic lease types when acquiring and asset via a lease finance strategy. Its as simple as that, you are either selecting a capital lease, which is a ' lease to own ' strategy, or alternatively you are choosing and operating lease .The operating lease is a transaction wherein you have a stated intention to return or upgrade the asset during or at the end of the lease term . The true beauty of the operating lease is that it also gives you still the right to purchase the asset, even though that might not have been your original intention.

Put yourself in the eyes of the lease company, and let’s use a simple example of a 1000.00 transaction. If the final residua value of the asset at the end of the term of the operating lease is 100.00 and the lease firm estimated this as , lets say 50.00 then they have just realized a further 50.00 profit on the asset .

So who is the best to understand the actual true value of the lease at the end of the term? Quite frankly, sometimes its you, who understand your business only too well. Alternatively many lease equipment finance firms have significant expertise also. It depends,

The type of lease company you choose to work with also has a significant effect on your interest finance charges. Bottom line, your lease firms borrow funds also. In Canada that’s typically done through insurance companies and banks. So a general rule of thumb is that if your lease finance firm is larger, well funded, and well managed... the bottom line is that your chances of more aggressive lease rates increases.


We hate calling them ' games ' but the industry uses many nuances in pricing and structure and terms that significantly affect your overall finance charges . What are some of these?

A good example is advance payments you are asked to make, or security deposits. If you are asked me make a significant security deposit ensure interest accrues to your security deposit, at a rate commensurate with the size of the deposit.

Many assets are acquired on an interim rent basis... that has the lessor outlaying cash before you actually sign off on the final acceptance of the asset. It could be a complicated computer project that is being funded, or perhaps a production asset that is being assembled by your vendor in stages.

We've highlighted just a few of the basic issues that should come into consideration by your firm when you are concerned about getting those ' best ' equpment lease rates' in the Canadian marketplace . There are others.

If there is a bottom line here it simply that it’s worth it to take some time and understand how some up front knowledge and consideration at the start of your lease finance process can positively impact interest finance charges in your favor as the lessee. Speak to a trusted, credible and experienced Canadian business financing advisor who can guide you to the appropriate lease finance pricing for your ongoing equipment needs.


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_lease_rates_finance_charges_interest.html

Not Getting The Best Canadian Equipment Lease Interest Rates in Commercial Leasing ?

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

Lets examine some of the key factors that drive your final pricing 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 who can ensure you the final deal is the best deal in commercial equipment leasing in Canada.



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_rates_interest_commercial_leasing.html