Sale Leaseback Financing In Canada : Exploring The Top Shelf Bridge Loan Lease Back Strategy !

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Just The Good Stuff On Sale Leaseback Cash Flow Strategy

Information on sale leaseback financing in Canada. The lease back strategy via a asset collateralized bridge loan is an often effective cash flow strategy - here is how and why

Sale leaseback financing , we think, is very much a ' top shelf' cash flow financing strategy often overlooked by Canadian business owners/financial mgrs. Knowing you have unencumbered assets that can also generate additional working capital for your business via a lease back bridge loan is a very powerful tool. Let's dig in.

Being asset rich... and cash poor is a sometimes common feeling among many Canadian business owners and financial managers. Knowing how to channel these assets into working capital can often make sense for a variety of reasons. Since the 2008 recession the ability to know about and source every funding strategy for your business is a ' must know '.

How can your firm free up the cash flow and working capital in these assets and put those funds to work for sales and profit generation? Refinancing these assets, or any asset via a lease or bridge loan (both strategies work) is the answer!

In some cases if you owe money on the equipment those payments can be stretched out to lower amounts, and at the same time improve working capital and liquidity.

Is it difficult to engineer a sale leaseback financing. The answer is categorically ' NO ‘if you employ a trusted, credible and experienced advisor in lease/loan financing in Canada.

The one caveat that we warn clients on is that the sale leaseback should not be greater than the book value on your financial statements of the asset being financed. If in fact that value was greater you would incur a tax on the financing which might negate the positive aspects of the sale leaseback.

So how do you get your sale leaseback financing completed? In effect you are selling your equipment back to the finance or lease company - so you are required to prepare an invoice and a bill of sale. That invoice of course means that you are warranting that the equipment is free and clear of liens and that you have valid title to the asset.

Lenders protect themselves by simply registering their new financial interest in the asset/assets being refinanced.

There are a large number of assets that actually hold their value, sometimes increase in value, and in some circumstances only depreciate a modest amount. In that case we recommend to clients that they invest a nominal amount in an appraisal - this may well generate a larger amount of working capital and cash flow coming back into your firm.

Prudent customers will generate an appraisal known as a fair market value appraisal - unfortunately many lenders will focus on a liquidation value appraisal, which is of course much more conservative .

Are there different documents used in a sale leaseback transaction? No! They are the same lease type of documents that you would expect in any type of equipment financing/loan transaction.

Careful attention should also be paid the 'type 'of lease that you consider in such a transaction. You essentially have two choices in Canada regarding such a structure; they are capital leases and operating leases.

If you choose the former you have a stated intention to own the equipment again when all payments have been made; an operating lease signifies your intention to use the equipment, upgrade it, or return it at the end of term. Each of these two types of structures has different balance sheet and income statement effects.

In summary, sale leaseback financing allows you to generate working capital and cash flow from unencumbered assets. It can be done for any asset, including real estate by the way.




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

Sale Leaseback Strategies In Canada : Asset Loans Via The Lease Back Bridge Loan Work !

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Whatever Happened To Sale Leasebacks ? Answer: Nothing ! They Still Work

OVERVIEW – Information on sale leaseback strategies in Canada . Asset loans via a bridge loan / lease back provides valuable working capital and cash flow when you need it most

A sale leaseback bridge loan in Canada is often the answer to a working capital or cash flow shortfall. The fact of the matter is that every business, probably yours, has its own story as it relates to business financing needs. Utilizing asset loans on equipment, real estate and other assets you own (i.e. technology, etc) is a time proven fix to capital and funding needs that are often driven by short term fluctuations in your business. Let's dig in.

Hopefully everyone understands the lease back concept. It couldn't be simpler. Your firm refinances, via a bridge loan or lease an asset or assets that you already own and are unencumbered by any liens. Typically your goal is to continue to use and benefit from the asset, as title reverts back to your company at the end of the lease or loan.

Depending on what asset/assets you are refinancing an appraisal often will protect both the seller and the financier. The concept of ' fair market value ' is key in asset loan refinancing. Be forewarned though that often lenders will take a prudent approach and in some cases focus on liquidation value as opposed to market values.

Owners and financial mgrs should also understand there are some accounting issues that come with bridge loan leaseback financing. This involves your balance sheet as well as issues that might come up in original cost, book value, etc. Although the majority of business assets ( depreciate ( unfortunately !) the reality is that certain fixed assets, as well as real estate of course could appreciate and grow in value over time.

Sale leasebacks are structured in various ways, but it's a short list. Typical transactions use capital lease paperwork. Term loans via a bridge loan can also be utilized, and in the case of real estate commercial mortgages are often utilized. Remember that notwithstanding what we call the transaction, or how it is ' papered ' and ' collateralized ' the reality is that you still use and benefit from the asset , while at the same time benefiting from the cash and working capital received under the leaseback.

While there might be cheaper ways to borrow cash or monetize owned assets the reality is that asset loans deliver on raising cash when it's often most needed. Remember also that in many cases this type of strategy allows you to re-do' your overall financing strategy as it relates to debt load, ratios, and bank covenants. It's a real win win when your use of funds is used to generate further sales and profits.

If you're focused on refinancing assets via the lease back strategy seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you understand risk and benefits.



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

Sale Leaseback Financing In Canada : Saying Yes To The Sale Lease Back Cash Flow Solution

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Cash Flow Challenge ? Sale-Leaseback Financing ? Yes, You Read That Right !

Information on the sale leaseback business financing solution in Canada . The Lease Back delivers on your company's temporary cash flow needs via refinancing of existing assets

Many business owners and financial managers are often faced with the consideration of utilizing a sale - leaseback to generate cash. This strategy became much more popular over the last year or so as banking and credit liquidity scenarios deteriorated.

The overall strategy can be viewed as giving some operational flexibility to the business. The bottom line of course is that it brings additional cash into the company at a time when ash is king. The customer is of course, essentially 'tapping into equity 'that the firm has built up in the asset. What is that asset?

Typically assets given up for consideration in sale leasebacks are manufacturing equipment, computers, and even a firm's real estate.

Sale-leasebacks have to make sense to both the lessor and the lessee. We view the largest ' negative ' aspect to such a transaction being the potential perception by the lessor, or other lenders that the firm is making a last ditch ' cash grab '. There has to be, as referenced above, an agreement that the transaction works for both parties.

If we analyze a typical example of a transaction we will hopefully get a better sense of why this strategy can in fact be a common sense financing alternative. Company A has manufacturing assets, shown as fixed assets on the balance sheet. In the sale - leaseback scenario the assets of course remain at the company - they do not move. The company receives cash for the sale of the asset to the lease firm. Quite frankly customers who consider this transaction have explored other traditional options by this time, such as reviewing additional financing with their bank or other senior lenders. Naturally the equipment is used on a daily basis to continue to generate sales, (and hopefully profits) for the firm.

In certain instances the sale-leaseback can in fact enhance the customer's balance sheet. One additional major flexibility is that the new sale-leaseback financing can in fact be used to generate additional flexibility at the end of the lease - i.e. the customer can again regain ownership of the asset if it will have economic value, or might choose to negotiate a return of upgrade with the vendor or lessor.

In summary, does a sale-leaseback of assets make sense? The answer as we have seen is ' yes ' if in fact it is done for the right reasons and makes sense for the customer and the lender.


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/3556312

Sale Leaseback Asset Finance : 7 Reasons To Consider The Leaseback Financing Solution

Note To Self : Check Out Sale LeaseBack Financing

OVERVIEW – Information on the benefits of sale leaseback financing in Canada . Asset finance, via a lease back , can bring significant financial benefits to any business considering the transaction

Sale Leaseback is an often overlooked form of business asset financing in Canada. How does this financing work, and, more importantly, what are the benefits. Let's dig in.

Let's explore those potential benefits around the ' lease back ' of business assets, including by the way, real estate.

1. Some leasebacks could bring significant balance sheet and tax advantages to your firm. Although probably the majority of transactions are structured as term loans or capital leases it is of course possible to structure a deal as an ' operating lease ' - allowing the monthly payments to become an immediate expense. Depreciation benefits may also come to bear.

2. The possibility to structure a lease back can really be undertaken at any given time. If there is not immediate financing need (there usually is though!) your company has the opportunity to do a transaction when market conditions on rates are optimal. Today’s current low rates are clearly an example of that

3. The concept of considering lease backs is sometimes just all about focusing on what your business does best. The pro's call it ' core competency. As an example many Canadian chartered banks have sold off their prestigious bank towers on Bay St, utilizing capital in other parts of their business. Pride of ownership is sometimes, unfortunately, a thing of the past in today’s competitive environment.

4. Many transactions in this area focus on elimination of debt - this often improves borrowing ratios which more traditional lenders focus on and allow capital to be deployed in other areas relative to growth, more profits, etc

5. Employing assets via a leaseback will often improve your firms overall return on investment.

6. The unique nature of this type of financing allows you to still use the assets you need - i.e. equipment, real estate, etc - you just don't own them.

7. In many cases the selling of an asset allows owners to take out equity in their business - More often than not, in the case of real estate the assets are in a separate legal entity anyway.

Although some might view this method of financing as ' alternative ' in nature in reality its as much ' traditional' in nature. Final rate pricing and structure depend on the overall asset and credit quality.

So should you check out sale leaseback financing? If any, or several, or all of our 7 benefits can help your firm seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with you asset finance solutions.



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN SALE LEASEBACK FINANCING EXPERTISE









Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:
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 '

Stan Prokop

The Sale Leaseback Transaction - From The Lessor.. and Lessee's Perspective

We're a frequent contributor to CANADIAN EQUIPMENT FINANCE MAGAZINE . Here's our published article from the JULY / AUG 2014 issue - To check out this great magazine for borrowers and lenders and other finance professionals see: http://canadianequipmentfinance.com/
Our article is on Page 16 of this issue : Here it is


SALE LEASEBACK TRANSACTIONS IN CANADA

The Sale Leaseback transaction in Canada. How can this unique aspect of asset financing in Canada be utilized for maximum benefit. Some might say that it depends on which side of the transaction you are on - borrower, or lender. From our perspective it's a two way street. Properly executed for the right reasons it becomes... excuse the sometimes over rated term... a win / win.


Let's examine some key aspects of leaseback transactions for 2 major asset classes - Equipment and real estate. From the lessee's perspective it’s all about access to alternative capital without giving up use and long term ownership of key assets. In recent years many companies and even financial institutions have focused on shedding ' non core ' assets as a method of employing capital for maximum ROI. A good example? Witness Canadian banks employing the lease back on prestigious bank office towers.

Fundamentally the transaction is simple - Sell and asset to a third party, leasing it back with the option or ability to repurchase it at the end of the lease term.

What then is achieved from the borrower’s perspective? As we have noted it's a redeployment of capital into other areas of the business. Depending on the value and original structure of the transaction this method of financing can affect key operating and capital ratios - they include debt / worth, current asset ratios, etc.


Borrowers consider leasebacks for working capital, technology upgrades; in certain cases it might be prudent to structure a transaction as a term or bridge loan based on specific issue surrounding the deal.

Financing rates play a key role in the overall background to any transaction of this king. Taken into effect must be any original financing remaining on the asset, current rates, and any tax effects related to the deal.

Many owners and financial managers in any company considering a lease transaction are often confronted with ' pride of ownership ' issues which must be properly rationalized. And looking at it from the lessors perspective it is clearly important to ensure the transaction is not viewed as the proverbial ' cash grab '. Simply speaking it is prudent for the lender to satisfy itself around proper use of the proceeds of the deal.

We note that not all lessors, banks, etc offer leaseback financing. In some cases their charter prohibits any financing of this type. In other cases owner/management at a lending institution has simply decided they don't the expertise or risk appetite revolving around a lease back. Charters of many organizations often specifically prohibit this method of refinancing. Niche players in the industry often include firms that have both financing and asset expertise - with many firms have key personnel with in depth liquidation expertise in all categories of assets.

Rates vary on this method of financing, and it should be no secret that the ever present issues of ' credit quality ' and ' asset quality ' are ever present in any transaction of this type.

Some other considerations for borrowers might include the ability to return capital to owners and shareholders. Management that typically might be incented by key ROI and ROI metrics often look to sale leaseback of assets as a method of ensuring attainment of corporate objectives. When refinancing interest rates align with corporate capital conditions for a sale leaseback are viewed as favorable.

Lessors have the potential ability to offer both capital and operating leases as part of their financial offering in this segment of asset finance. Technology lessors make maximum use of the operating lease vehicle - allowing clients to maximize operating expense deductions, balance sheet enhancement, etc.

We've focused mainly in key benefits and consideration of the borrower. From the asset lenders perspective lease back finance offerings necessitate marketing, legal, and due diligence expertise. Lease contracts must be specifically designed to reflect the essence of the lease back. Key issues such as corporate searches and PPSA issues must be tabled and addressed at the start of any negotiation. In essence the leaseback must be properly ' papered ' to reflect the asset and the financial obligations of the lessee.

As noted asset valuation for purpose of refinancing is key. It becomes prudent, almost mandatory, to engage asset appraisal expertise as the cornerstone of any successful transaction. Different asset categories have different intricacies

The proliferation of information via the internet has greatly assisted owners and lenders in determining true asset value for the purposes of refinancing. Market data on almost any asset can be extremely valuable in initial negotiations around deal value and risk pricing... and these days that data is literally up to the minute. Solid appraisals can significantly benefit key issues such as book value, fair market value, impairment, etc


Key aspects of any appraisal include opinion, value, methodology, assumptions and pictures or videos.

We've observed over the years that many lenders rely solely on relationships they have built with specific appraisers. This is much to the chagrin of the lessee who has recognized the needed for a third party valuation, only to find that the appraisal firm they used is not recognized by a commercial lessor or bank. Bottom line? Money spent... unwisely!

By the way, safe to say also that we have never run into a situation where owners of assets have undervalue an asset in their own mind! That comment specifically relates to a key technical issue in asset valuation - i.e. the type of appraisal that is utilized or required by the lessor. Key categories in this area are fair market value, orderly liquidation, and forced value liquidation. By the way, lessors typically lend against a per centage of forced value, thereby highlighting the difference in owners perception of true asset value



The real secret to proper refinancing via a sale leaseback strategy is due diligence as the lender and an informed borrower / lessee around the leaseback process. That final decision, whether you're a lender or borrower will become a much easier one, and absent of surprises.



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :



Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
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 '

Sale Leaseback Financing : Changing Your Mind On The Sale Lease back Option

When Time Waits For No Sale Leaseback Financing Might Be the Perfect Alternative to Cash Flow Replenishment !

Information on sale leaseback financing in Canada. The lease back option provides a solid cash flow alternative to working capital and cash flow replenishment








Sale leaseback financing is a solid alternative for Canadian businesses that wish to refinance business assets, or real estate, with a view toward enhancing working capital or for generating capital for business needs.

In certain cases it simply might make sense for owners to cash flow some of their business assets for personal needs. But how does the owner/financial manager evaluate the lease back option? Let’s dig in.

While the term ' lease ' is inherent in our subject title we point out to clients that many of these types of transactions can also be accomplished via a bridge loan. Depending on the type and timeframe of the financial need the balance sheet could well reflect a ' bridge loan' versus a lease. The ultimate gain, ' cash flow’, is still the same. Generally speaking a bridge loan is shorter term in nature while a ' lease ' often denotes a multi year payback arrangement at a fixed rate.

Clients of course are always asking us what the financing rates are for a lease back. We hate to on our ' lawyers cap ' and say , well ' one hand ..'

but the real answer here is that the rate on such a transaction boils down to the credit quality of the asset and the business, or a mix thereof.

As important as the ' rate' is in any transaction it's equally important to understand the legal terms and conditions of your transaction, as well as ensuring you and your accountant are on board relative to the tax and accounting treatment of the transaction. A quick example here to consider is that in some cases the sale of the asset to the lender or lessor might actually trigger a tax liability if the asset sold has a much higher price than it's carried in your financials.

A very typical transaction these days is for owners and financial managers to consider the sale leaseback option for additional growth capital. If the business can't secure that financing from traditional bank or commercial finance company sources the leaseback options becomes a solid solution.

In some cases it makes perfect sense to consider retiring existing debt that came at a higher interest rate with the proceeds of a sale leaseback transaction. We recently completed a transaction for clients that allowed the sale leaseback to retire debt that was incurred in a management buy out.

Properly structured the lease back or bridge loan strategy can ' fix up ' your balance sheet as it relates to key issues such as debt to equity or current ratios, as well as depreciation that was previously being taken on the asset as an expense.

If time can't wait for your company's needs for cash flow replenishment seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with a lease back option that makes sense from all points of view.





Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN SALE LEASE BACK FINANCING EXPERTISE




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

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 '

Stan Prokop

A Sale Leaseback Is A Solid Way Accessing Bridging Finance Needs : The Asset Bridge Loan Made Easy

A Different Way Of Looking At Short Term Loans Via Bridge Finance



OVERVIEW – Information on the bridge loan concept in Canada . Sale leaseback transactions can help the balance sheet and cash flow via a unique way of looking at bridging finance need




Bridging finance , in some manner, is often sought by Canadian business owners and financial managers. The sale leaseback, via a traditional lease, or a ' bridge loan' (there’s a difference) is one way to achieve that financing need. Let's dig in.

Your company has the ability to make maximum use of your firms owned assets in a manner you may not have considered. It's the 'sale lease back’, and by selling back the asset, or assets to a third party you can address several key challenges you might be facing on the balance sheet, not the lease of which is cash flow.

So how is this type of transaction completed... successfully ? Several factors come into play. When you have assets such as equipment, technology, and even real estate that are used in your core business, are still needed, and are owned outright a significant opportunity exists to ' cash flow' the asset/assets.

Naturally the need for capital can be satisfied in a number of ways, but most owners are reluctant to address the issue of new equity investment - it dilutes ownership and sometimes simply isn’t possible.

Let's recap some of those key benefits of a bridge loan/ leaseback on owned assets. They inlcude:

The ability to free up equity that’s held on your balance sheet - this could actually be distributed to the owners or used as a working capital component to continue growth of the company

If your business is doing well and simply hampered by growth capital the ability of your company to earn higher profits that offset the costs of the bridging finance is a desirable route

In many cases it allows the company to re do their balance sheet in some manner, i.e. pay down other more expensive debt, eliminate some debt altogether, etc

Using company owned real estate as an example you can ensure your company is using capital to operate and grow the business, as your charter is clearly no real estate ownership. Note: Many large corporations, even our chartered banks included have sold their real estate holdings and leased them back - even the big guys recognize they are running a business, not investing in real estate. Apologies of course to those ' PRIDE OF OWNERSHIP' folks!

In certain cases the interest rate environment alone might be a major consideration. The current low rate environment might make sense to acquire capital at 4% and reduce debt acquired at 9% as an example.

Finally, in some cases your advisors such as accountants and the tax folks might be able to point out some solid advantages to a sale leaseback.

If you’re looking for a different way to raise capital/cash the sale leaseback is a great way to address bridge finance needs. That might be either a traditional lease or a short term bridge loan. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can turn those needs into ' easy'.



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com
Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 Park Avenue Financial = Canadian Sale LeaseBack expertise!







Stan Prokop









Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

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 '

Stan Prokop