How to Get Your Canadian Business Equipment Financing Lease Approved

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Here's The Answer To ' What's My Rate "?!

Information on equipment lease rates in Canada. Leasing rates don't have to be an unknown factor in strategies for business loans and asset acquistion. Here's why !

'What is my rate?' is a question I am often asked by customers when they work with us with respect to equipment and lease financing. They are surprised when I tell them that they get to pick their own rate! (All customers want the lowest rate!)

I am not trying to be facetious when we make that statement. What we are saying is that the over all credit quality of a customer, as perceived by the lender ( that's important!) is in fact set by the customer, thereby driving a final approval on rate, term and structure of the proposed financing request.

The role of the customer, or their trusted advisor is to understand the basic credit information requirements and how the overall risk to the customer and their industry will be perceived by the lender. The irony of a lot of business leasing is that the industry for the most part used historical analysis to project future ability to pay. That is a difficult concept for the customer to handle more often than not - as an example the customer may have lost some money last year, driving a negative cash flow figure. Prospects have improved, new orders are coming in, and yet the business has a problem in getting new financing.

The customer needs to ensure that the information and ' story ' make the transaction become more ' approvable'.

Critical categories in the information submission by the company are as follows:

Length of time in business
Personal credit history of the owners
Relationships with other financial institutions
Quality of the financials (Some customers submit balance sheets that don't balance!)
Additional collateral available if necessary
Summary of key financial info such as depreciation, cash flows
Positive focus on management and its background and experience

If the customer is qualified to make such a submission a solid package as per our list noted above should lend itself towards an approval at current market rates and structures. If the customer feels they are not properly qualified to make such a submission they are strongly encouraged to used a qualified intermediary who knows the industry and, more importantly, knows the specific weighting given by a lender to the above noted submission requirements.

The amount of information required around each component is more often than not determine by the size of the transaction or the lenders total exposure to that customer. In many cases small ticket transactions (those under $ 25,000.00) are adjudicated via a credit application and public reporting sources such as Equifax or Dun and Bradstreet. Typically 60-70% of all small ticket transactions are approved.

In summary, customers who want to get a prompt and of course positive lease approval should focus on providing a clean package of required information that will ensure a prompt approval based on specific industry requirements around the transaction size and asset type. Knowing that the lender will focus on future potential of the firm, the management experience, and the collateral asset are valuable data points for any business seeking a business equipment financing lease.



Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769


Office = 905 829 2653


Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing with the intelligent use of experience '

ABOUT THE AUTHOR
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














Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698

Article Source: http://EzineArticles.com/3428649

Leasing Rates . What’s The Trick To Getting Best Lease Pricing In Equipment Finance In Canada?

CANADIAN BUSINESS FINANCING
WITH THE INTELLIGENT USE OF EXPERIENCE!


STAN PROKOP
7 PARK AVENUE FINANCIAL



Canadian Lease Finance Pricing – Rocket Science Degree Not Required!



Information on understanding leasing rates and equipment lease pricing for asset finance in Canada .





Leasing rates for equipment lease pricing and finance in Canada. Abracadabra! We wish it were as easy as that one word magic phrase to get the best rate for your equipment finance transaction!

But in reality its not that hard to ensure you have the best financing rates if you understand the basic underpinnings of a lease price and how certain obvious ( and not so obvious ) lessor strategies work for your favor , and what factors you can affect directly.

What isn’t hard, or magical, is why Canadian business owners and financial managers continue to embrace lease finance for the assets they need for their business.

It's simply a cost effective Canadian business financing strategy that allows your company to acquire virtually every asset your firm needs - that includes plant equipment, rolling stock, computer and telecom equipment , software, even that corporate jet ... We thought of that last one while waiting in line at the airport the other day .

Other benefits we focused on in the past in order to educate clients include cash flow management, taxation benefits, and the general ease of doing business. Oh and by the way, numerous smaller costs associated with asset acquisition can be financed also.

So what does in fact affect your leasing rates? It's a number of things, so we forgive clients for meekly asking ' whats my rate '.

Factors that affect your lease pricing at a macro level include perceptions by the lessor of your industry, your current financial strength (That’s very important) and the general asset value and remarketability of the new or used equipment that you need. All of these play a key role in lease pricing.

Is the actual pricing of a lease a disadvantage? Possibly, we certainly don’t think that’s anywhere in the majority of cases, but a careful lease buy analysis with a focus on your overall condition is highly recommended. While this can be done on the back of a napkin, numerous spreadsheet templates can get you to the goal line quickly. Even your lessor can provide you with one, but we'd suggest you ask for the formulas in the cells... just kidding.... well maybe not!

Various finance nuances exist in lease pricing. Ask your lessor if your payments are calculated in advance or arrears. The 5 elements of all lease prices are:

Term
Rate
Value of Asset Financed
Payment
End of Term Value

If you know any 4 of those you can actually calculate the last one very easily, or call us if you don’t have a lease finance calculator!

We tell every customer they get to pick their own lease rates! When the shock finally lifts of their faces we explain that your current overall financial risk profile in your financials really has determined to a large degree your current lease prices. In Canada rates range from 4-24% per annum on leases based on overall credit quality.

As a quick example, using a 100k asset over, say a 4 year term your monthly payment could vary between 2250$ and 3196$ using the above data. How important that monthly payment amount is to you based on the critical need of the asset to your company will be a final key decision driver.

One other area you need to investigate is the residuals and purchase options. They clearly define the two basic differences in operating and capital leases and can significantly affect your monthly payment.

Think we've covered it all? Well threes actually a whole litany of other things that will ultimately affect that lease price. They include prepayment penalties, upgrade formulas, commitment fees and down payments, and a handful others.

So how can Canadian business ' stay in the game' when it comes to both understanding and achieving best leasing rates and lease pricing in Canada. One option is to seek an expert, so consider talking to a trusted, credible and experienced Canadian business financing advisor who can assist you in the lease finance jungle. BE CAREFUL OUT THERE!






7 PARK AVENUE FINANCIAL
IS A CANADIAN LEASE FINANCING EXPERT





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_rates_equipment_lease_pricing_finance.html

5 Reasons Why Your Competitors Lease Equipment – Achieving Great Leasing Rates On A Commercial Equipt. Loan

A Canadian Equipment Financing Perspective


Information on why Canadian companies lease equipment and how the best leasing rates and terms and structures are achieved on a commercial equipment loan .






Recently we ' Canadianized' a U.S. update on what was termed the ' 10 Advantages of Leasing Equipment. The U.S. document also spoke of the top 5 reason why companies lease... We thought those were worthy of some comments also.

Canadian owners and financial managers who wish to lease equipment or obtain a commercial lease/loan for equipment are not only motivated by good leasing rates. Let’s examine some of those other motivators also.

Number 1 on the list was ' the bank won't help our firm’. That’s a common thread when we talk to clients looking to finance their assets. However, we must also point out that the Canadian chartered banks in very recent times have become very aggressive in lease financing of assets. Several banks have even purchased commercial lease companies and reframed them under the bank logo.

If your company can ' meet mustard' for the bank credit bar, which is typically quite high then you are in a position to get rates, terms and structures that clearly can't be beaten.

Another complication we have noted with bank leasing in Canada is that the preference is for them to only finance their own commercial borrowing customers under their lease programs. If they can’t do that there is usually a strong pitch made for moving all your credit facilities over to their bank. That of course may, or may not, make sense! It certainly complicates the process in our opinion. However, those bank leasing rates can be very appealing and are often significantly, and we really mean significantly under their competitors, the independent lease finance firms in Canada.

Reason # 2 for Canadian firms to choose Leasing .We guess you can call it our ' royalty' reason, because, so we've been told, cash is king ! So if you can obtain 90-100% financing of your asset, conserve credit lines, and finance numerous ancillary needs of the asset, i.e. maintenance, warranty, delivery, installation, etc then you are clearly way ahead of the game.

Reason # 3 - It's easy, it’s as plain and simple as that. The reality is that in 2011 the equipment lease is a highly competitive offering in Canada. Numerous firms that finance small, medium and large ticket transactions are very aggressive in marketing their financing services for a commercial loan / lease. The trick here we caution customers is not to reverse that ease of application by wasting time in talking to the wrong firm - someone who doesn’t match your firms credit quality or asset financing need .

Reason # 4- Want to be held captive? What do we mean by that? Simply that one of the category of lease offerings in Canada is held by captive finance companies and dealers who offer financing. They have one main motivation. Sell you their products! So their ability to finance those products for you becomes their motivator, with your firm being the winner, often getting great lease rates and terms by an incented manufacturer or dealer.

Reason # 5 - Hold on a minute, we have to talk to our accountant. By that we're simply saying there are number tax, deprecations and accounting implications and benefits around an equipment lease. This further solidifies the reason why many firm not only focus on leasing rates but other intangible benefits such as accounting, tax treatment, etc.

So, as always there’s a bottom line. Canadian firms who lease equipment have some great reasons to finance their asset needs in this manner. Speak to a trusted, credible an experienced Canadian business financing advisor to find out which of these reasons make the most sense to your firm.




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/lease_equipment_leasing_rates_commercial_loan.html

How To Get Best Lease Rate On Equipment Financing And How Approvals With Leasing Rates Are Calculated In Canada

‘What’s my lease rate? ‘is a question I am often asked by customers when they work with us with respect to equipment financing approvals

They are surprised when I tell them that they get to pick their own rate! (All customers want the lowest rate!)
I am not trying to be facetious when we make that statement. What we are saying is that the over all credit quality of a customer, as perceived by the lender (that’s important!) is in fact set by the customer, thereby driving a final approval on rate, term and structure of the proposed financing request.

The role of the customer or their trusted advisor acquiring lease rates for asset acquisition is to understand the basic credit information requirements and how the overall risk to the customer and their industry will be perceived by the lender. The irony of a lot of leasing rates in the business of leasing is that the industry for the most part used historical analysis to project future ability to pay. That is a difficult concept for the customer to handle more often than not - as an example the customer may have lost some money last year, driving a negative cash flow figure. Prospects have improved, new orders are coming in, and yet the business has a problem in getting new financing.

The customer needs to ensure that the information and ' story ' make the equipment financing transaction become more ' approvable'.

Critical categories in the information submission by the company are as follows:

Length of time in business
Personal credit history of the owners
Relationships with other financial institutions
Quality of the financials (Some customers submit balance sheets that don’t balance!)
Additional collateral available if necessary
Summary of key financial info such as depreciation, cash flows
Positive focus on management and its background and experience

It's these factors that affect lease rates in Canada.

If the customer is qualified to make such a submission a solid package as per our list noted above should lend itself towards an approval at current market rates and structures . If the customer feels they are not properly qualified to make such a submission they are strongly encouraged to use a qualified intermediary who knows the industry and, more importantly, knows the specific weighting given by a lender to the above noted submission requirements.

The amount of information required around each component is more often than not determined by the size of the transaction or the lenders total exposure to that customer. In many cases small ticket transactions (those under $ 25,000.00) are adjudicated via a credit application and public reporting sources such as Equifax or Dun and Bradstreet. Typically 60-70% of all small ticket transactions are approved.

In summary, customers who want to get a prompt and of course positive lease approval should focus on providing a clean package of required information that will ensure a prompt approval based on specific industry requirements around the transaction size and asset type.

Knowing that the lender will focus on future potential of the firm, the management experience, and the collateral asset are the valuable data points regarding lease rate approvals for any business seeking a business equipment financing lease. Speak to a trusted, credible an experienced Canadian business financing advisor for the help you need for great lease finance rates and prompt approvals .


--

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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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