The Finance Leasing Company . Don’t Regret Not Having Used Financing Leases For Asset Acquisition

Code Name ‘ 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

Why You Should ( And Should Not ) Lease Equipment. When Do Financing Leases Make Sense Via A Leasing Company In Canada

Lease Equipment Strategies In Canada – Is Timing Right For Your Company?



Information on the pros and cons of financing leases in Canada . To Lease Equipment may via a leasing company may, and may not always be the right decision for your firm . Here is why !


Financing leases in Canada. Should we... or perhaps we shouldn’t ... and who with... and when ... and why. Can we make up our minds here!

No one is a bigger fan of lease equipment strategies in Canada than us... when you're with the right leasing company it's a powerful double whammy of financing success. But is it always advisable to choose equipment finance, and when are there some clear disadvantages to this popular method of Canadian business financing.

Although 80% of North American firms utilize lease finance it might not always be your preferred strategy. Two obvious alternatives of course are to purchase the equipment outright, while the other options might just be a term loan strategy.

If there was in fact on perfect method of financing fixed assets, trust us... we'd be all over it. However the real world suggests that it's always about some pros and cons where you as the business owner or financial manager have to weigh in.

One of the most obvious benefits of those who have used leasing before is simply that it more efficient and less time consuming than seeking loan financing. The industry in Canada is basically categorized as ' document efficient’... smaller transactions can almost always be approved in a day or so ... sometimes within hours if you're at the lower end of the spectrum.

One other key advantage of asset finance via a lease strategy is your ability to manage what is known as the obsolescence factor. Because you're paying over time and the lessor owns the asset it becomes the risk of your leasing company when it comes to declining asset values. Most of us know that 99% of busines assets depreciate, not appreciate in value.

One solid example of the whole issue of obsolescence is the technology area. Whether its computers, software (yes software and software licenses can be financed) and telecom equipment are prime examples of expensive higher ticket items that can lose their value almost overnight given changing technologies. So to pay for them in cash or to lock into a term loan that has no flexibility is simply... not recommended!

Many companies in the manufacturing sector rely on production assets to run their company. These quite often need to be upgraded, if simply for the wear and tear aspect something mechanical. So the idea of flexibility in a lease to return, upgrade, trade in, and then refinance is a highly sought after financing strategy in Canadian business.

Not all fixed assets that your company needs will be needed for a long time... in some cases they may even be project oriented. That’s when a shorter lease term with an aggressive depreciation policy makes solid sense.

That’s just a couple advantage of leasing in Canada. But should you always be using this option? We do like to present a balanced picture!

If there are situations when you can maintain residual upside in the value of the equipment or asset (perhaps your company jet?!) then by all means consider an operating strategy or a term loan scenario.

Also, if you are in a position to pay cash and not hinder your overall cash flow situation then there is some accounting and cost advantages to outright purchase.

So, bottom line today? It's simply to manage and understand the weight of evidence that come with any lease vs. buy strategy.

Need help? Speak to a trusted, credible and experienced Canadian business financing advisor today for your lease equipment needs.

7 PARK AVENUE FINANCIAL
CANADIAN LEASE FINANCING 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 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/leasing_company_lease_equipment_financing_leases.html