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Information on equipment leasing in Canada. Knowing the critical deal factors involving equipment leases and loans allows you to acquire assets in a cost efficient matter
Let’s share and discuss some of the absolute key things you need to focus on to know that your firm has a competitive deal and that you have received pricing and transaction flexibility commensurate with your needs and original business goals for this type of financing .
First, and foremost – pick your partner. There are tens and actually hundreds of small and large lease firms in Canada. Some are Canadian, some are foreign subsidiaries, and some are small, while others are larger than large – think Canadian banks as an example , as they play a large role in the industry and compete with independent commercial finance firms
If you have all the time in the world to stop your business and investigate various aspects of lease financing in Canada, and who your best partner firm might be, then by all means go ahead, we’re actually jealous! But if you don’t have that luxury simply speak to a trusted credible and experienced business financing and lease specialist to determine what firm most suits your needs re rates and structures and flexibility.
Secondly, we’re talking about equipment leases and equipment financing – but did you know that you are also required to know about the type of lease you want – either a lease to own, or what is termed an operating lease. In the case of an operating lease you are opting to use the equipment, and have no stated intention of owning it. However a properly structured operating lease will in fact give you the flexibility to return the equipment, upgrade it, or even purchase it for fair market value. You can now start to see some of the benefits hopefully of choosing to deal with an expert in this area of Canadian business financing.
Payments are another key issue in lease financing in Canada. You naturally want a competitive rate – the answer to that is very simple. If you properly demonstrate through your application that you have the ability to repay and that your firm needs the equipment to generate revenues and profits then quite simply you deserve and should get a good rate. Leasing rates in Canada range from prime plus one to in the high teens based on overall credit quality and asset that you are financing, plus the term of your lease.
Let’s look at a quick simple example of how you can save thousands of dollars by simply ensuring you have a competitive deal in place. Lets say you are buying some equipment for your manufacturing facility and that it costs 110,000.00 . Let’s assume you either wish to, or have been requested to put 10k down, so we’re financing 100,000.00. You estimate the equipment will last you 5 years. Your vendor is quoting you a rate of 9.5% - that would mean that your monthly payments are 2083$.
Let’s now assume you speak to a leasing specialist and he determines that you actually qualify for a rate of 8.5%. . Your new payment is now in the 2037$ range. That’s only 46$ you say, but over the term of the lease you are approaching close to three thousand dollars in savings. Don’t always focus on rate, but ensure at the same time you are getting a competitive rate commensurate with your credit quality.
In summary, lease financing is a solid equipment acquisition strategy. You need to understand the Canadian lease equipment environment, choose a solid lease partner firm, and focus on obtaining the best rate, term and structures for your acquisition – one that meets your business goals around growth and profit generation around the asset being financing. Speak to an experienced advisor in this area to ensure you are entering into the right type of lease transaction.
7 Park Avenue Financial :
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Office = 905 829 2653
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 .
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
