7 ( Count ‘ em !) Ways To Make Lease Finance Work For Your Company
OVERVIEW – Information on leasing companies in Canada . Key attributes in dealing successfully with the equipment asset finance firm
Dealing with leasing companies in Canada for your key asset finance needs. Want to maximize your return on this popular method of financing fixed assets in the Canadian marketplace. Or perhaps you simply want to find a lease company you can comfortably work with on a long term basis.
Previously we offered up 5 points on maximizing asset financing for your company. Those points / tips revolved around:
What can be financed?
Lease rates
Payments to your vendor/mfr for the asset
Delivery and Acceptance
Asset location
As the announcer on TV says ' But wait ... there’s more!
And if you act now we'll throw in ...'
Anyway, here are 7 other aspects to consider when utilizing a lease company for your financing needs.
First of all, focus in, or brush up on what type of lease you actually are looking for. Capital leases, i.e. lease to own, and Operating leases, i.e. lease to use are in fact that two main choices offered up to Canadian business owners. Each has its nuances when it comes to monthly payment calculations, implied interest rate, and how they affect your balance sheet and tax situation.
Secondly - determine what the term of the lease is that you require. Term, or amortization affects pricing of course, but other factors such as useful economic life and options at the end of your lease available to you are also critical.
Thirdly, believe it or not you have more flexibility around the timing of your monthly payments. Aside from monthly you also have the option of requesting quarter or even semi annual type payment structures. In certain cases if the asset isn’t going to be fully functional you might want to ask for a short ' interest only ' payment scenario as the asset gets up to full production speed.
Fourth - this one is important. It's your end of term options. They might include negotiating buying the asset at the end of term, upgrading it, returning it, or simply extending the lease for a few more months based on the particular use of the asset.
Our fifth point? Well it might seem a little bit mundane , but its about knowing how to address basis , lets call them documentation or paperwork issues around maintenance of the asset, servicing it, ensuring the asset is properly insured in your name and the name of your lessor, etc. And can it get anymore boring than taxes? In general you will pay the taxes as a combined amount on your monthly payment, i.e. it will be included. By the way when you create a loan transaction, as opposed to a lease those taxes can't be financed, so that’s one of the flexibilities of leasing equipment.
Point # 6 today? It's ensuring that any smaller transaction expenses, which can add up by the way, are identified in your lease offer. They might include admin fees, legal fees for collateralization, registration fees, etc.
Finally, point # 7. It’s simply that you should strive to ensure you are fully credit approved for equipment asset finance transaction, as final credit approval drives both your rate plus some other issues that we have spoken of. You might also want to ensure the actual rate of the lease and verify that with a proper financial calculator. There are only 5 drivers to a monthly payment - term, rate, monthly payment, value of the deal, and the end of term obligation. If you know 4 of those you can figure out the last one easily.
Successfully dealing with leasing companies in Canada can save you both time and dollars. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor, who can assist you with your key fixed asset financing needs.
CANADIAN EQUIPMENT 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 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-companies-key-equipment-asset-finance.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
