Don't Let ' Good Enough' Be Acceptable In Canadian Equipment Leasing When Structuring A Business Equipment Loan or Lease

Is ' good enough ' acceptable to your firm when you are looking at equipment leasing and arranging a business equipment loan or lease in Canada. We don’t think so and we'll share some fundamental info and strategies that take your business financing to the next level when it comes to benefits.

You have arrived at the lease or buy decision base on your need for new fixed assets for your business. Financing those assets out of regular cash flow, or entering into cumbersome bank loan arrangements isn’t an option.

The use of the asset over the long term should be what drives your financing decisions. Longer term assets require long term financing, and that's what equipment leasing is all about - matching the useful economic life of your asset to your cash flow and financing structure.

We encourage clients to take a hard look at lease term. Don’t let our ' good enough ' statement overtake your decision to properly match he asset term. Many lease firms that are focused on offering one type of term, or one type of lease (there are two types) are going to try and sway you towards their product or service offering. If there were only one lease company in Canada that would be problematic - fortunately there are hundreds!

Business owners and financial managers need to separate. What do we mean by that ?W mean that you must separate the manufacturer and the price of the equipment from the financing . If you are dealing with a mfr that is also the financier of your asset make sure you maximize the benefits of that type of financing, known as ' captive financing ' as its often the best available in terms of rate term , an structure .

The lease financing industry preaches ' 100% ' financing for your business equipment lease and loan needs. The reality is though that often times a down payment of security deposit is required. Make sure that request is reasonable, and competitive, don’t fall into our ' good enough ' scenario of having to accept every term or down payment that is specified in your finance offer.

Structuring is what lease financing is all about. Be armed with a cash flow analysis that makes sense for the type of asset you are acquiring. Remember, if you don’t ask or request a ' vanilla ' or typical lease solution will be offered up - you don’t have to accept that if your cash flow needs, business seasonality, or term of the lease are particular to how you want to benefit from lease financing.

Let's take a quick example - let’s say you are leasing a 100k computer system. The lessor offers you a 5 year lease based on your firms overall credit quality, and requests a 20% down payment. and specifies payments of 1685/mo . Did you know that in many cases you could get the same lease payment for a 3 year term, saving you two years in payments? That’s by utilizing an operating lease and shortening the term. Again, back to our point, don’t let ' good enough ' be your only choice in asset financing.

In summary, every firm in Canada has unique financial needs, and you need lease financing payments, terms, and structures that work for you. Don’t accept ' good enough ' in business financing. Speak to a trusted, credible and experienced Canadian business financing advisor on how you can truly maximize financial benefits of a business equipment loan or lease.

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

Can You Afford Not To Use Film Tax Credits When Financing a Film In Canada - An Investor Primer

Whether it’s a 1 Million dollar independent production, or a 10 Million (or more) project how can you possibly overlook financing a film via film tax credits in the Canadian marketplace? It's no secret if you are ' in the know ' that the utilization of tax credit financing for Canadian film, television and animation projects is often a ' make it , or break it ' component of ultimate success for the financing of your project

The financing of film, TV and digital media productions has radically changed going back to the 1970's. There is even a school of thought that the independent or ‘indie’ projects are in effect impossible to finance. We'll admit that the challenge is significant , but we don’t buy into the ' indie movies are dead' school of thought , especially when you can utilize Canadian film tax credits for a huge ( often 30- 45%) of your production budget . And your ability to arrange independent financing for the tax credit just adds cash flow and working capital to your venture.

The other components of the producers total finance plan of course involve other elements such as foreign pre sales, completion bonds, and the debt and equity component of your project.

So is there a fool proof method to arrange, certify and finance tax credits in Canada in order to appease and satisfy your project investors. In Canada there is only a very small handful of banks which participate in film financing - therefore access to the key players and being able to satisfy their financial requirements is critical.

In Canada there are a number of film tax credits that are spread over Canada's ten provinces. The reality is that sometimes the nature of your project makes it more sensible to focus on a specific province based on your filming or production needs.

The Canadian government, similar to other world geographies, takes a bullish stance on the film, TV an animation industry. Their focus is jobs, tax revenue, and nationalism. Your focus is on getting your project financed.

Let's assume you have a solid finance plan, you have arranged the various components of your equity and debt... how can you now take advantage of financing a film via the tax credit component. It's simple if you have a solid team and advisor in place. By selling and or assigning your tax credits to an independent finance firm or bank you can monetize the credits for cash flow and working capital.

Solid detail in your production budget, a qualified opinion by a film tax accountant, and your experience in completing a project allow you to now monetize your tax credit either on completion of your project, or, if you prefer, on an accrual basis as you start spending on the production.


Financing film tax credits is done by structuring what in effect is a bridge loan based on the collateral of the tax credit . Your ability to provide investors with a solid return on investment through the utilization of effective film tax credits and their financing will only enhance your reputation and chances of project success . Speak to a trusted, credible an experienced Canadian business financing advisor on the proper benefit and utilization of tax credit in successful film, TV an animation financing.

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

What Are The Advantages of Sale Leaseback Equipment Financing In Canada? Are There Alternatives?

Canadian business owners are looking for some information they can trust on the concept of a sale leaseback. Are there advantages to this type of financing, and more importantly, being a business owner or financial manger who likes alternatives, is there another solution to the sale leaseback of equipment cash flow dilemma.

Let’s examine the real world advantages of a sale/leaseback type strategy. When structured properly this type of business financing allows you to obtain additional cash flow and working capital while not giving up the right to the ownership of business assets.

Sale leaseback equipment financing often comes up as a profitable solution when firms are challenged by working capital and cash flow needs and requirements. The reality is that if you structure this type of financing properly it’s the ultimate business financing solution to a temporary business challenge.

It is not secret that the sale and leasing back of business assets becomes more popular when economic times are ' tight '. The strategy is many times a positive and good decision, because you are freeing up cash that is sitting in fixed assets that are not utilizing their maximum earning power for your business.

Let’s not also forget that your balance sheet also improves at the same time because your overall debt to tangible net worth improves when utilizing a sale leaseback financing, and your write off (depreciation) and financing costs are also lowered at the same time! That's a solid one two punch of good business news to any business owner.

In some ways this method of business re financing is an alternative and creative strategy. What your firm does with that additional capital is of course your decision - it can be used for general working capital purposes, a down payment on new and required assets, or to retire additional debt or loans that you might be carrying on your balance sheet. If you can use the new freed up capital to increase revenues and profits that is simply an additional benefit.

We caution clients to look at two key areas in this type of transaction. It is critical to maximize the value of the transaction, so more often than not a qualified appraisal of the asset has true value for the business owner, and should not be considered a wasted expense.

Remember also that most lenders when financing a sale leaseback transaction financing what is known as a percentage of loan to value. An example might be that if an asset is appraised at 200,000.00 the lender might as a policy loan 60% of that value, so your ability to increase the value of the asset via a qualified appraisal provides additional working capital to you and of course comfort to the lessor or lender. Rates are the second item to investigate, as you want to ensure you receive a market rate for this type of financing, which typically carries a premium to new equipment financing.

Is there an alternative to a sale leaseback equpment financing transaction? One of our favorites is a short term bridge loan on the asset. In this transaction you are not locked into a longer fixed term that often comes with sale lease back financing, and you have the option to often pre pay or temporarily renew the bridge loan on an annual basis. Bottom line, a very viable alternative.

Investigate the benefits and the alternatives to sale leaseback equipment financing if your firm has an interim cash flow or balance sheet enhancement need. Speak to a trusted, credible and experience Canadian business financing advisor who can assist you in structuring a transaction that optimizes benefits and increases cash flow.


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

Discover The Foremost Method Of How To Get Financing When You Buy a Franchise Opportunity in Canada

In business, a discovery that either makes you more competitive, or in our case ' successful ' is clearly a good thing. Let’s review the most popular method of financing a franchise opportunity and how to go about ensuring you achieve that success.

It's not secret that the franchise business has survived the economic downturn of 2008 and 2009 quite positively. Thousands of franchisees are springing up in Canada and both banks and other lenders clearly view your decision on buying a franchise as an area they are prepared to support.

The decision to buy a franchise is sometimes easier than how to arrange your financing for the business, because we think in many cases you have been able to match your skill sets and interests to a business you have probably wanted to get into for quite sometime. Financing that opportunity is probably an area that you’re not necessarily comfortable in if you don’t have a finance background.

However, don't despair, because if you are properly armed with the right strategy and info and advisory support you are in a strong position to complete your financing.

So what exactly is the foremost method of arranging finances when you buy a franchise? It comes as a shock to many that the majority of financing in Canada is done under a government loan program called the BIL/CSBF program. The government? Absolutely.

Consider this. Would you not agree that if you arrange financing for your business under a 5 or 7 year term loan, at rates that many established businesses can’t even get, and, here’s the kicker, you don’t even have to provide a 100% personal guarantee for the financing. Enough said, we think we have made our point.

Unfortunately just knowing about the program doesn’t guarantee financing your opportunity will be successful. You need to understand the parameters of the program, how to prepare a proper submission around your new business, and finally, ensure you meet some general criteria around what will constitute a solid approval.

Naturally the whole opportunity becomes even more serious based on the total cost of the franchise and the personal investment in time and funds you are prepared to make in the business. Generally in our experience you can expect to receive only minimal support or financing advice from the franchisor. In many cases that is simply because there are various legal ramifications around franchisors providing you with estimates or guarantees of profits, and success. But lets be honest also, the franchisors business is selling franchises, not financing your new business opportunity.

The key essentials of the BIL program are a solid business plan that provides a good overview of the franchise opportunity, your background, and most importantly, the numbers. Does it surprise you that the lender focuses on how they will get repaid - it shouldn’t. So your business proposal should be realistic and focus on cash flow, profits, and debt repayment.

In summary, how to pick and buy a franchise is a challenge we'll leave up to yourself. Financing a franchise is straightforward if your arm yourself with the most popular financing option, have a clear proposal, and ensure you meet very basic criteria such as an investment on your part in funds, as well as standard application paperwork .

Speak to a trusted, credible, and experience Canadian business financing advisor in the franchise area if you need assistance in how to arrange financing for your franchise opportunity.
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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/how_to_buy_franchise_opportunity_financing.html

Breakthrough Lending Discovery ! How To Triple Access To Business Financing Via An ABL Asset Based Facility

Impossible clients say. How, in the current business financing environment could any company triple their access to working capital? The answer is an ' ABL ' or asset based lending facility for cash flow needs. Lets examine what, who, and how!

As asset finance is more of a general term we find lets confirm first exactly what we are talking about. That is to say we're focusing on what we can call a comprehensive business line of credit (not through a bank by the way) for your receivable, inventory and equipment and real estate financing needs. The industry term for this credit or business financing facility is an ' ABL ' or Asset Based Line of Credit.

While this type of lending has been popular and very prevalent in the United States for years it continues to gain traction in Canada everyday. A lot of mis information exists around this type of lending and financing for a variety of reasons - those include cost of the financing, how it works, and who offers it. So you are forgiven for not fully understanding or knowing about an asset based facility for cash flow and working capital - trust us you are in good company on that one!

Cost is a factor in any financing that your firm undertakes, and when we are talking about the largest business credit facility you can have cost is important. Larger Abl facilities for medium size and larger companies are very competitive with Canadian chartered banks. Smaller firms and start ups - yes even a start up can employ this type of financing! pay a premium to access this type of credit . However that premium can be explained or covered off in a number of ways.

First of all if you could double or triple your access to working capital and cash flow business financing via an asset based facility then would that lending be worth it. We certainly think it does, and have numerous examples of firms that have just done that. Recently one firm who envisioned much stronger growth in the 2011 economic environment replaced their chartered bank facility with an asset based line of credit. The facility gave them 90% advance on receivables, as well as a 60-70% advance or borrowing base on inventory. They were previously ' capped' on inventory at an arbitrary smaller amount that had nothing to do with the true value of the inventory.


ABL asset based lending is done via highly specialized firms. Typically they are not banks, they are independent, and they are experts in only one thing - your assets! As a result the due diligence and value they place on your assets can in our experience at a minimum double you access to business credit. In some cases firms that were self financing previously and had no access to business financing now have significant borrowing facilities in place.

Interested? Want to separate the wheat from the chaff as they say, on who offers ABL business financing in Canada, how it works and what it costs. Seek out an expert, credible an experienced Canadian business financing advisor for your business lending needs.

P.S. Let us know if you were able to double or triple your working capital requirements!

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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/business_financing_abl_asset_based_facility.html

Are Working Capital Loans What Your Company Really Needs? What Type Of Finance Company Can Help?

The shock has probably worn off by now. We're referring of course to the business owner and financial managers realization that sales don’t equal cash flow and that your management of working capital might just be your key to short and long term survival.

So what type of finance company or institution can help you in the access to liquidity? The reality is that every industry needs a different level of working capital. That relationship of your assets to your turnover to your cash on hand is what is going to make the final call on what type of loans you might need for your cash flow management solution.

And we will add that you might find that ' loans' or bringing on additional debt to your balance sheet is not only the wrong solution, but you have alternative non loan solutions!

The reason you are looking at your working capital situation hinges probably on two areas, your firm is growing too quickly, or you have asset management challenges or problems with inventory and receivables. So hopefully you can now see that what working capital management is all about comes down to matching the financing you need to the assets and equity you have on your balance sheet. As your business and profits grow the owner equity component grows also

So are loans the solutions to your cash flow challenge (or crisis?!). Sometimes, but definitely not all the time. The long term solution to a cash flow management solution might in fact be a working capital term loan, in effect injecting long term capital into your business. If you can qualify for this loan, which is more often than not unsecured, it certainly is an option. Larger loans of this nature are called subordinated debt, but cash flow term loans are available for almost all firms - generally the minimum being 50k , but as we noted, going to several million dollars depending on the size of your firm .

But why would you borrow externally and bring debt onto your balance sheet when the solution is inside your business, not outside? Clients are often surprised when they find out that two other solutions, and not loans, are possible.

We're talking about asset based lines of credit, which are generally non bank in nature, meaning they are offered by private finance firms. Rates on such facilities can be competitive to bank rates, but more often than not come at a premium. However your ability to, in many cases, double your working capital liquidity can significantly increase profits and sales. Just think about it, if you can double sales, keep your overhead costs relatively fixed, the additional profits you generate can easily cover your new increased financing costs.

The other solution we will mention is the sales of receivables. This type of financing brings zero new debt on to your balance sheet, improves your cash position, and provides immediate cash flow for growth. Perceived as expensive and non traditional it is gaining traction with Canadian business every day. In effect it is the trade off you have between growth and survival and additional financing cost, of a non loans nature.

In summary, working capital loans can come from external finance company sources. Alternatively you can become your own finance company by managing and monetizing your assets in a variety of ways. Speak to a trusted, credible and experienced Canadian business advisor to determine which solutions work best for your firm.

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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/working_capital_loans_finance_company.html

Reasons and Advantages For Using Equipment Leasing For Your Business Finance Needs in Canada

How could thousands of companies be that wrong ? We are pretty sure the weight of evidence suggests equipment leasing for your firms business finance needs is a solid financial solution.

Let's examine a couple of key basics around equipment financing and why asset acquisition under this method of financing is a solid cash flow management solution.

So, why do firms lease, including of course your competitors. Yes, arguably it’s for tax reasons, as well as the whole issue of obsolescence, but we find it always comes back to cash flow management, not using your valuable day to day working capital, as well as the difficulties perceived by many businesses in arranging loan or bank financing. All in all, some pretty powerful reasons we think!

Many industry finance trade associations provide data that sooner or later almost 80% of all companies in Canada use equipment leasing in some manner for their business finance needs. And there’s no discrimination, from the largest firms in Canada to small start ups, all types of companies use this financing. In the case of small businesses it’s more often than not because of limited capital, and in the largest of corporation’s issues such as depreciation, off balance sheet needs, and budget cycles all play key roles in equipment financing.


We use the term equipment financing, because it’s an all encompassing term, but in reality every type of asset can be financing, and that includes technology, software, plant equipment, office equipment, we think you get the idea - anything can be leased based on the overall credit quality of your firm. That also brings up the point that most business finance people quickly understand that equipment leasing approvals are probably easier to arrange than any other type of financing.

Businesses love ' options' for their equipment financing needs - business owners and financial managers want to know they have flexibility. That’s where lease options such as full payout lease to own leases, or operating leases offer maximum flexibility, based on your business needs. Using financial leases for long term capital equipment needs is a daily strategy for Canadian business financing.

The costs to lease are varied. The factors that play a role in the ultimate interest rate and payment factor depend on key issues such as your firm’s credit quality, potential outside collateral if that’s required, willingness of the owners to provide a guarantee, as well as the lessors opinion of your historical and projected cash flow. Quite frankly the main question lessors always ask themselves is simply - ' Will this asset product profit for the lessee".


In summary, the key advantages of equipment leasing are its ultimate ' convenience ', the flexibility around the types of leasing you require ( lease to own or just rental , use and return ) , tax and accounting advantages, and , oh yes , ease of getting approved!

If you want to maximize those equipment leasing advantages then seek a trusted, credible and experienced Canadian business financing advisor who can guide you through key issues such as what benefits work best for your firm, what type of lease company best suits your asset acquisition needs, as well as the ability to save time in today’s faster paced business environment.
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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/equipment_leasing_business_finance_needs.html