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‘ Lease Financing ‘OVERVIEW – .Information on the role of the finance leasing company in Canada . Financing leases play a key role in asset acquisition in Canada
The finance leasing company in Canada. While cash flow and capital conservation are prime motivators in why Canadian business owners and managers use asset finance as part of their overall business decision pretty well everyday there's a lot more to this finance tool that impacts your overall success. Code Name - LEASE FINANCING!
A lot of the history behind lease finance in Canada revolves around the taxation and off balance sheet issues that have to do with this method of financing assets. But the Canadian business owner and managers views this a lot more simplistically - it's simply a solid way to get the assets they need to run their business - on financial terms and structures that work.
We were reminded recently that you can do a great job of pre planning asset acquisitions by utilizing the concept of the lease line of credit. That process allows you to pre qualify for a lease line of credit - at which point you've got strong negotiating power with your vendors. The ability to be ' proactive ' in acquiring assets puts your firm ahead of the competition.
The benefits of lease financing can be summarized as follows:
Flexible financing
Simplified asset acquisition
Structures and rates that are commensurate with your firms credit quality
Why does the owner/manager often think that the whole issue of financing assets is complex? In talking to clients a number of reasons emerge; they can probably be boiled down to the mechanics of approval and documentation, and the accounting and tax issues that arise from a well structured lease.
While it sometimes feels to us that ' Operating Leases ' are not as popular as they once were the issue of using and not owning the asset is still a powerful one. Technology as a whole certainly lends itself to operating lease financing .Even software applications can be bundled into lease transactions.
We suppose you can think of a finance, or capital lease as a lease to own strategy, similar to a mortgage in some ways. It's the counter part of the operating lease, allowing you to own the asset at the end of the term - with your fixed payments being made along the amortization of lease, which is typically 3-5 years for most assets.
We're often somewhat amused at the amount of time that clients place on getting the ' best rate ' when it comes to lease financing. The reality is that the useful life of the asset, the residual value of the asset at end of term, and other considerations often are equally or more important as rate.
Oh, and on that ' low monthly payment ' that clients fixate on when negotiation asset finance leases. Let's just say that that payment can be structured in ten different ways to make it seem affordable. That is done by the leasing company via down payments, purchase option structures, residual investment, etc. The bottom line of rates is very simple - The finance lease company in Canada is in a very competitive environment. Your firm’s credit quality will command an acceptable rate if you have the expertise to properly communicate your firm’s financial strength to the lessor.
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in financing leases for your asset acquisition 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 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 :
7 Park Avenue Financial = Lease Financing Expertise
CONTACT:
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
