Is There A Difference Between Truck Leasing And ‘ IT’ Leasing ? An Equipment And Technology Finance Surprise ?

Is there a major difference in which assets can be financed?

Information on leasing and equipment finance . Do the same benefits apply to truck Leases and IT technology financing ? Business owners may be surprised!



At first brush is the answer ' Are we crazy?' How could there similarities between financing a transportation asset or entering into an equipment finance leasing transaction for new ' IT ' assets?

We actually think you will be surprised at some of the similarities which clearly brings home the point that various asset categories (whether it is a truck lease or for a sophisticated computer infrastructure ) lend themselves to a solid finance vehicle. And excuse the pun on vehicle!

Whether your Canadian firm is a start up or a ' mature ' firm (are start ups immature?) the need to access capital to either enhance the truck fleet or add hardware and software to your computing power remains the same.

Both assets , using today’s example are depreciating assets - many will make the case that truck and transport assets depreciate much more slowly than IT type assets, which seems to lose value very quickly if only for the reason that technology seems to change about every 2.5 minutes these days!

So does lease finance have an answer to both those asset classes? It does, and it's all about picking one of two leases that fit what the industry calls your ' end of term' strategy. So it might be a more sophisticated operating lease for your computer IT solution, and it might be a long term capital lease ( a lease to own ) for your truck finance.

Naturally you can buy depreciating assets, no one is forcing you to choose leasing in a ' lease vs. buy ' analysis... but the reality is that unless your cost of capital significantly exceeds a lease total cost that financing is more often than not the right choice. And don't get us started on the very high cost of equity capital which is a whole new kettle of fish.

Naturally it makes sense in any business financing strategy that your feel the cash flow required to pay the lease can be met even when things are tough.

Companies use assets to generate value, so whether its a transport truck asset to deliver your products or perhaps a new IT computer / software system to make your operations more efficient and competitive.... a lease finance strategy , a proper one by the way, simple accelerates your ability to fund new assets and the growth of your firm .

The proper lease strategy will allow you to both replenish and upgrade assets, or make key decisions around what will happen to the asset at the end of term. In today’s example for instance we could replace a truck with a new one, keeping our monthly payment the same ... of we could return IT assets to our vendor for an upgrade of newer technology... with... you guessed it, the payment remaining the same.

An interesting side point is how valuation decisions are made on assets such as trucks or computers during and at the end of lease. In the real world (that’s where we work) it comes down to best inputs you can provide, along with value opinions that might come from an appraiser, your experienced equipment finance company, or research on the internet at best values.

Hopefully we have made our point - whether it’s financing rolling stock type assets where key factors such as physical condition, safety and maintenance come into play... or the other end of the spectrum , IT type assets that of often require large capital outlays around changing technology .

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in determining the value of equipment finance, whether it’s your trucks... or computers!

7 PARK AVENUE FINANCIAL
CANADIAN LEASE FINANCE 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_equipment_finance_truck_it_technology.html

Creative Ways for Franchise Finance In Canada. From IT Franchises To Restaurant Franchising Here’s How !

Avoid The ‘ Wait & Hope ’ Of Franchising Finance In Canada


Information on franchising in Canada . From IT franchises to a restaurant you need a clear franchise finance success plan




Franchising Canada. Whether it’s an ' IT ' franchise in the world of technology, or a restaurant in the quick service / full service/ casual service industry everyone it seems wants to get on board. If they know they have the ability to finance the business...so let’s examine some creative ways in which to complete the financing of the entrepreneurial dream.

It's no secret to the potential franchisee that it's all about cash - a combination of your own and borrowed funds. What are some of the methods that clients use to creatively, yet sensibly finance the franchise dream in Canada.

Every business in Canada, new or existing, has two components to the capital structure. Debt... and equity. Equity is of course your portion; debt is of course that contributed by your lender or lenders. And remember, you have the upside potential in equity... your lender has only the interest income, and the hope and belief that they will be paid in full.

That's one of the reasons that many franchisee ' newbie’s' in fact get overly enamored with the financial potential of their business when pitching a franchise finance scenario. We think they would do better often to tone it down a bit and focus more on the lenders ability to feel comfortable that cash flow will cover the loan or loan payments.

In talking to clients over a long period of time we've been intrigued by the manner in which customers come up with their portion of the funds, the equity. Sometimes it's savings, other times they are leaving corporate life and utilizing their severance from the previous employer.

In other cases there is ' friends and family ' - we see that a lot. In order to be truly creative in using funds from friends and family (it hasn’t escaped us that they are in fact your ' angel investors;) you need to be sure these funds arent documented as formal debt - otherwise your banker or lender will have to show this on your personal balance sheet as debt, which will affect some of your borrowing ratios.
Supplementary to this strategy is getting a minority operating or silent partner in the business. Giving up a small amount of equity, say 5-10% might induce a family member or third party to help you out.

Typically the collapsing of registered savings plans is viewed by most as not, we repeat, not the best way to finance a franchise. Two reasons here actually, one is the huge tax bite involved in such a move; the other is simply that you have put your savings at risk, which clearly is not optimal.

Other creative ways to compliment franchise financing in Canada are to consider supplementary forms of financing such as equipment lessors for certain assets, or merchant receivable firms for ongoing cash flow. They are complimentary to your overall finance strategy.

Is there one way to really move along quickly in franchise finance in Canada? How about a co- signer, and boy do we have one for you. It's the government of Canada, via Industry Canada’s BIL program, with the government in effect guaranteeing a huge portion of your loan in the franchising Canada environment. Don't overlook that one!

So, a service franchise, such as in the IT (information technology) industry, or a restaurant... it’s your call when it comes to selecting and finalizing the franchise dream. Just make sure you have considered all options, traditional and alternative when it comes to ' creative ‘.

Speak to a trusted, credible and experienced Canadian business financing advisor for franchise finance advice that gets you to the goal line of success.







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/franchising_canada_it_restaurant_franchise_finance.html

Technology Financing – Options and Strategies for IT And Solar Assets In Canada

Financing technology, whether it be IT ( information technology ) assets, or the new kid on the block, solar finance , requires a combination of access to capital and solid expertise . Let's examine some key options and strategies in tech finance that will provide your firm with the growth potential you need. Oh, and by the way, this pertains to whether you are a user or a vendor of these assets.

Key issues that come into play are valuation of assets, useful economic life (ouch! isn’t that an accounting term?!) and types of financing available in the Canadian marketplace.

Clearly tech financing covers a variety of industries, we're focusing today primarily on computing and solar industries, but our comments are broadly applicable to a number of other asset types.

One of the key challenges in financing technology is simply the fact that the majority of goods and services provided and utilized by your firms either depreciate rapidly, or , unfortunately slowly become obsolete. There is a great analogy that tech assets are like a mines assets, they are depleted and are ' replenished by development '. A true analogy!

Financing tech assets must take into consideration the obsolescence factor - a good example of course if pc's, laptops and servers which easily can depreciate 30% per annum. Creative financial arrangements around these types of assets is critical and we'll discuss that a bit also.

Software and services, often financeable, are other solid examples of high technology assets that require specific options and strategies. These products are high gross margin to the seller and when financed properly provide both benefits to the user and profits to the vendor/lessor. Factors that drive software financing are upgrade cycles, continued proliferation of PC'c and mobile products into all facets of business, as well as the obvious productivity gains these products provide.

Tech and Solar assets can be either finance or purchased. When these assets are financed key issues for financial and credit scrutiny include interest coverage and cash flow, valuation of the technology re type of financing desired.

In the U.S. Surprising almost half the country's employed work in IT and other emerging tech areas such as solar, wind, etc. We're quite sure Canada's numbers would be too far off that.

For computer IT assets typical lease and other financing terms rarely go over three years... it’s simply a question of the useful life of these types of assets. Solar projects require alternative strategies, since they typically have a longer payback.

Financing transactions in IT and Solar industries tend to be cash flow, and not asset based when it comes to lending and financing transactions. These type of transactions clearly aren’t ' asset based lending ' in its traditional form. Upgrades are common in computer, they aren’t in Solar.

It is important for both borrowers and vendors and lessor to separate financing from licensing and technology issues - the intellectual property in the asset being financed rarely, if ever transfers to the borrower.

Key options and strategies in technology financing typically include operating leases, providing the user with significant flexibility.

When either financing tech and solar sales, or utilizing and acquiring such assets consider working with an experienced, credible and trusted Canadian business financing advisor who should be selected on the basis of experience, knowledge, and references .


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 .Info re: Canadian business financing & contact details :

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

Looking For Loan Or Lease For Business Financing ? Finance Your Canadian IT & Industrial Assets

Canadian Business owners and financial managers want to be in a position to benefit from lease for business financing. Whether it’s a lease for industrial or IT (information technology) assets the goal is to achieve or maximize the benefits of the assets via use.

Asset financing in Canada consumes capital - and a lease for business financing simply is your alternative to that capital consumption, it conserves working capital and cash flow.

The good news about asset and lease financing in Canada is that it covers all types and sizes of assets. At the end of the day the collateral value of the asset , including software by the way , as well as your firms general credit quality drive the lease financing decision from the viewpoint of your new business financing partner, the Canadian lessor .

In the 2011 environment equipment financing and leasing is on a roll, and that’s an understatement! The industry is back up off its back, having survived the 2008-2009 recession and global financial implosion. The only decision you have to make is quite frankly to find the right lease partner. That choice in an of itself can often make or break your success in a lease or financing loan. (Sometimes a bridge loan is a solid alternative to an equipment lease financing.)

Quite frankly the challenge many clients face is simply knowing where and how to find the right lease financing solution, whether it be for industrial or IT assets to compliment their asset financing strategies. Lease companies in Canada cover a broad spectrum - some are bank based, some are independent, with either U.S. or Canadian ownership, and some actually are foreign based.

It is highly recommended to work with a lease partner that knows both your industry and is also the type of assets that you wish to finance. This becomes your goal and is often a challenge for many Canadian business owners and financial managers. Don't forget that when a lessor understands your industry and your asset you have a significantly higher chance of reaching what we term ' lease nirvana “. What's that? Simply financing that has the right rate, term and structure for your firms needs and cash flow requirements.

Although your firms credit quality often plays a key consideration in a lease for business financing approval it’s also the value of the asset that drives that final credit decision. Customer with less than stellar credit, even start ups by the way, have a solid chance to obtain lease equipment financing simply by virtue of the value of the asset they are acquiring. And that’s a good thing.

Key issue to consider when acquiring an asset, either industrial or IT in nature are the term of the lease, the ultimate disposition of the asset - (keep it? Re finance it? Return it? ) and how a lease financing loan works into your overall finance strategy.

Looking for the ideal lease for business solution in Canada? Speak to a trusted, credible and experienced Canadian business financing advisor to determine how you can benefit from Canada's most popular form of business asset financing.





CANADIAN BUSINESS FINANCING
7 PARK AVENUE FINANCIAL
http://www.7parkavenuefinancial.com/lease_for_business_industrial_it_financing_loan.html