Equipment Loans And Leases In Canada ! Which One Of Three Options in Business Leasing And Financing Works For Your Firm?

Leasing Business Assets Makes Sense - 80% Of Canadian Firms Utilize This Financing Strategy



Information on equipment loans and leases in Canadian business asset financing . Which leasing options works for your firm?



The need is often there, but the solution might not be always as obvious as it seems. We're talking about equipment loans and leases in Canada - those unique structures that allow business leasing strategies used by your firm to acquire financing for the assets it needs... to operate, survive, and grow!




When Canadian business owners and financial managers are faced with the challenge of fixed asset finance their oft immediate option is the traditional business loan. This might be a bank term loan for example. The criteria, we in the industry call it ' the credit bar ' might often be fairly high to achieve the types of term financing you need on structures that make sense for your firm.




So, if that was Plan A, and Plan A doesn’t work, whats left? The answer, quite simply is equipment leases for business financing. Rates and terms are quite competitive to the bank, and Canadian business, in general we feel, seems to think that lease financing proceeds with less of a ' hassle '.




Your equipment needs might be from several aspects of your business, computing, machinery, office equipment, etc. All of those assets of course run your company; they're important.




We spoke of the bank term loan as an option, the other more obvious one might have been a cash purchase , using the funds ( if they are there !) to acquire the equipment outright . However, using that capital in this manner if often a classic ' mismatch ' of funds; your firm, incorrectly so, is using short term cash for long term asset acquisition. Bottom line, not a good thing. The reality is you want to use those funds for operating and revenue growth.

That then brings us to what we feel what might be the optimal solution in business financing for assets, ' leasing '. Your new found ability to acquire assets with little or no down payment, bundle in other costs such as shipping, installation, warranty, etc becomes a solid new strategy for asset finance for Canadian business owners.

When utilizing lease finance you are in effect leveraging your cash flow, getting the most out of it, all the same time matching outflows of cash with future inflows of sales and profits arising out of the use of those operating fixed assets you are financing. Our strategy clearly works best for companies who find they need to constantly refresh assets such as computing, or shop floor equipment.



Oh, and by the way, thousands of businesses that don't qualify for bank term loans for assets do in fact always qualify for lease financing. Transactions are structured on a combination focus on the value and use of the asset, your current and future cash flows, etc .Oh, and by the way, your lease payments can generally be expenses and set off against tax obligations.



We spoke of three options in Canada under equipment loans and leases financing scenarios. Those three options are capital leases, operating leases and sale leaseback of assets you own already. Each of these options has different benefits, and gives your firm different rights and obligations. Speak to a trusted, credible and experienced Canadian business financing advisor to identify which of these 3 options make sense for 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/equipment_loans_leases_business_financing_leasing.html

SBL Loans! Is The Canadian Government Business Loan Help From Where You Least Expect It? Gov Programs For Business Finance

Government Assistance In Financing ? Yes! Information on the Canada government business loan . SBL loans are the leading example of gov programs that work for Canadian business financing . Help from where we least expect it. We can't speak for you but we've always appreciated assistance in business, especially when it comes from sources you least expect. We're talking about the Canadian government business loan, in our opinion it’s the best or 2nd best of gov programs that work. We've always loved the line ' Hi, we're from the government and we're here to help ‘... which is why SBL Loans in our opinion are the real world example of a phrase that is often associated with negavity. ‘Government ' ... ‘Banking’ ... many small and medium sized business owners cringe when they contemplate those words. Not today, though. The government business loan in Canada is a primary offering via INDUSTRY CANADA in Ottawa. It offers SBL loans up to $ 500,000.00 for the purpose of financing equipment assets, leaseholds, real estate, software, etc. In actuality the 500k limit is specifically related to real estate, while other asset categories are capped at $ 350,000.00. The program provides a long term fixed or variable rate financing to businesses looking to start, expand, and grow! Misinformation abounds around the program; we're always surprised at the amount or lack of solid understanding and facts around gov programs such as this. One of those main misconceptions revolves around who the lender is. We can at least forgive our clients who misunderstand the fact that while this is a government sponsored and guaranteed loan, in actuality the actual day to day dealings are in the private sector. One of the greatest benefits of the program is something we have alluded to already, its that SBL loans fit perfectly for a number of company categories, including start ups, growing firms, and also franchises which make up a huge portion of the borrowing segment of this program. As we have hinted, the program is run at the local level, local meaning wherever your firm is, because the program is underwritten and funded by your local Canadian chartered bank. By the way, one of the challenges of the program, as ironic as it may seem, is to find a banker that understands and supports the program in a positive manner. That means of course facilitating your application and recommending you for approval! A common complaint we hear from clients on anything to do with ' gov programs' or banks in general is that ' forms and documents' are a challenge. Let's be realistic. All business financing requires a forms and app's, and we don’t necessarily subscribe to the fact that SBL loans are any different. Some key basic requirements are a reasonable personal credit history for the busines owner/owners, a business plan and cash flow, and some historical financial statements if you're already in business. Very basic things such as your articles of incorporation are also required. Oh, and by the way, we strongly encourage clients to pay their taxes as you can expect to get a government loan when you owe them for back personal taxes already, right?! The Canadian government business loan funds billions of dollars of small business loans in Canada. It's a working example of Gov. Programs that work. Speak to a trusted, credible and experienced Canadian business financing advisor today on achieving solid finance rates and terms you otherwise could not achieve. Bottom line? Get with the program!! 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/bank_financing_commercial_business_banking.html

Is Canadian Franchise Financing A Do It Yourself Project? Franchising In Canada With Success

Canada Franchising Opportunities Can Be Your DYI Success Story If Financed Properly ! Information on Canadian franchise financing . Canada franchising opportunities can be financed on your own , with the right strategy and advice. There seems to be a lot of ' DYI ' out there today, that being the acronym for Do It Yourself of course. So we were thinking, is it possible that Canadian franchise financing for the purchase of your chose franchising endeavor in Canada is a ' DYI ' project? Let's talk about a lot you can do on your own, (as part of that ' dyi ‘) and we'll also focus in on some key areas where expert assistance is highly recommended! Our focus is of course on financing that franchise; we're assuming you have already picked your business of choice. A solid first start is to have a realistic discussion with your franchisor around their knowledge and assistance in the area of helping your franchising project in Canada. It's the policy of some franchisors, certainly not all by the way, to develop financing guidelines for their units. This might be in conjunction with a preferred program via a financial institution, or, as importantly, their own experience in levels of investment, capital, and working capital to acquire, run, and of course grow the business. If there is one caveat here we simply say to clients that you should not infer any sort of guarantees that your financing loan or package will be approved simply because a program exists that you might potentially fit into. Our own experience though is that certain financial institutions target many successfully larger franchise chains and will go out of their way in ways we can't mention to get a transaction completed on your behalf. (Think hockey/donuts as an example! enough said!) Getting back to DYI though, a business plan, either prepared by yourself or with input from you is critical. This can easily be accomplished with help from the franchisor, your accountant, or an experienced Canadian business financing expert in the area of franchising in Canada. We forgive clients for thinking they are out of their league in prepared a business plan and cash flow, but it's not as hard as you think. The reality is that if you can help prepare and understand and present a plan your chances of financing approval increase significantly. DYI also can be taken in the context of looking at your own personal investment in the business. Your choices are of course 100% outright cash purchase (not recommended by us), 100% borrowed funds (not recommended, and oh by the way, impossible!), and the real world solution, an investment by yourself with some real world franchise financing for the balance of your purchase. DYI with respect to your owner equity is anywhere from 10- 50% per cent in Canada. Franchisees should spend part of their DYI time in assessing their personal net worth, their liquidity, and how they will raise and contribute their portion to the franchise investment. We've shown that a good part of your Canadian franchise financing journey can in fact be a DYI process. Where you win big time is by using, where necessary the services of a good accountant, franchising lawyer, and an experienced credible and expert Canadian business financing advisor to complete your purchase successfully, under terms that make sense for your situation. 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/canadian_franchise_financing_canada_franchising.html

Considered An ABL Asset Based Secured Business Line Of Credit ! Is The New Year The Right Time For Your Company?

Looking For A New Way To Master Business Financing?

Information on a secured business line of credit for Canadian business financing . Let an ABL asset based facility solve working capital needs.. differently .



What Canadian business owner or financial manager hasn't wondered if they have properly considered all the financing alternatives available to their firm in today's challenging borrowing market? One mechanism not fully known or understood properly is the secured ABL asset based business line of credit. Is it for your firm? You'll decide shortly!

Although Canadian commercial bankers still proudly trumpet the fact that chartered bank commercial credit facilities are widely available hundreds or thousands of businesses in Canada are unable to meet the qualifications for such financing. Basic qualifications for a bank credit facility that margins receivables (and hopefully inventory) are not complicated to understand. They are of course difficult to achieve or provide! They include clean balance sheets, income statements that show profitability, and positive cash flows, both historical and current. Oh and by the way, owners must often back stop these facilities with guarantees that often require personal assets to be either pledged, or collateralized.

Don't get us wrong. Bank financing in Canada is available, it’s cost effective, it’s simply just a bit harder to get if you can't qualify under out criteria we set out above.

So, enter the secured ABL facility. Here's business working capital and cash flow financing with an emphasis on only one word: ' Assets'! The ABL lender is focused. That focus? Your key business assets of receivables, inventory, unencumbered fixed assets. You borrow against the total current market value of these assets via a revolving secured business credit facility. If there is a bottom line it’s a simple one - a focus on collateral, not ratios, covenants, or outside collateral.

A common question from clients revolves around what dollar level of facilities is either the entry point or the cap on such secured facilities. The good news is that there is no upper limit on ABL deals in Canada. In fact, unbeknownst to many some of Canada's largest companies utilize ABL facilities, having forsaken bank facilities which no longer make sense for their business.

We consider a solid entry point for such facilities to be in the 250k range, which more often than not is a combination of receivables and inventory. We hasten to add that there must be a reasonable mix as typically A/R has a higher borrowing value. However, there is always an exception to the rule, so a good example of a great ABL solution is the financing of inventory for retail chains, etc.

Pricing on secured ABL facilities fluctuates widely in Canada. Pricing can be either below bank comparables, slightly higher, than or as high as 1.5-2% per month depending on whom you choose to deal with. Mid market firms who have assets are great candidates for this type of business financing,

A proper submission for an ABL facility should include financials, proper aged payables, receivables and inventory, as well as miscellaneous information you would associate with any type of business finance application.

So why consider an alternate method of financing in the New Year? It's about increased borrowing power, easier qualifications, and competitive pricing commensurate with your overall credit and asset quality. Speak to a trusted credible and experienced Canadian business financing advisor on reasons to make a change in your finance strategy.





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/bank_financing_commercial_business_banking.html

How To Avoid Business Operating Cash Flow Problems And Improve Financing Success

Note From The Trenches – Working Capital Traps To Avoid


Information on operating business cash flow and solutions on how to improve business financing problems and challenges .




Many Canadian business owners and financial managers find out the hard way that business success is almost always also tied to having, and improving their operating cash flow. It's when sales and profits don't match cash and working capital that the problem begins. Bottom line, getting rich on paper only is not all that fun!

In order to avoid cash flow problems we can quite simply say that it’s a ' matter of time '. When we say ' time ' we mean it in the context of how your firm operates, in essence it's operating cycle. Many new or inexperienced business owners often find out painfully that the cycle of time from getting an order to collecting the sale can be significant!

In a perfect world, (and we know it's not) your business wants to have the flexibility to allow your business bank account to fluctuate in a constant manner, from surpluses to positive balances.

One fallacy often missed by the entrepreneur is that deficit cash flows are a sign of weakness. In reality, if you are selling, and growing, it’s simply a case of the ' timing ' we have spoken of. You have built up an investment in receivables and inventories, and are waiting to get paid, converting those into operating business cash flow.

But, if you don’t fail to recognize and manage how to improve asset management business cash flow problems occur. It's at these times that your bank or other lenders you might be dealing with may attempt to rein in your business, in essence cutting off future working capital requirements.

One of the most obvious ways to effectively manage your cash cycle is to ensure you have a Canadian chartered bank operating line of credit. This facility in effect is in a position to totally manage your time horizon when it comes to getting an order, shipping or delivering a product or service, and then waiting 30... 60... well... you know what we are talking about!

Many businesses , particularly those that are either small, or start up in nature quite frankly don't qualify for business cash flow lines of credit in the manner that they might wish . Can this challenge be solved?

Yes, it can. In order to improve your cash position you can do one of two things. First, you can manage more effectively, and secondly you can access alternative financing vehicles.

Are we saying you can actually fix your own problems via management? Absolutely. You can tighten terms and credit policies, take discounts when available, and enforce stricter collections from clients. For whatever reason many clients we talk to can't or are reluctant to manage as above. We'll never know why.

The solution then? Enter alternative financing . By using such methods as receivable financing outside the bank, inventory financing, merchant advances, tax credit monetization, etc you can still be successful .

In fact some of these financing vehicles, even if more costly can make your business more successful if properly managed . For instance you can incrase sales by providing longer payment terms to clients, something your competitor might not be able to do . Additionally you could take trade discounts with the funds you receive from receivable financing, increasing profits if the discount is more than the cost of financing .

Tuition is often high in the school of business operating cash flow . Mistakes can be costly if you dont take measures to improve and recognize cash flow problems. Speak to a trusted, credible and experienced Canadian business financing advisor on business cash flow challenges that can be fixed .. properly.






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/operating_business_cash_flow_problems_improve.html

An Equipment Loan Might Not Be What You Think! Kick Starting Asset Financing Success With Canadian Leasing Companies

You’re One Step Away From The Benefits Of Lease Financing Approval


Information on effective strategies to deal with leasing companies in Canada. Equipment loan and asset finance tips for financing success





Unfortunately a huge number of Canadian business owners devote a huge part of their time in business life to asset finance; in effect trying to find capital for their business. Many times the solution to that challenge is with leasing companies in Canada ready and willing to provide those business people with equipment loan and lease financing.

What then are some of the key issues that get you one step away from business financing success when it comes to acquiring assets for your firm? As a business owner or financial manager you want to get the amount of capital you need with the least amount of risk you are willing to take on via debt.

Leasing companies, via asset finance in Canada are one of essentially five ways to raise capital for assets. (Those other four are of course supplier loans, bank financing, term loans, or equity injections from owners).

Why then do 80% of business owners in North America constantly utilizing lease finance as a business strategy, instead of simply buying the assets? Flexibility is one reason, your assets can be financed on shorter terms , via a ' lease to use ' type strategy, or longer amortizations via a lease to own transaction .Depending on which of the two you choose you again ( and here's our flexibility again ) can either return the asset or take ownership of it .

Canadian accounting practice sets up specific rules that deal with different types of lease strategies , either recording the lease on your ' books ' or in some cases, via an operating lease setting your transaction up as an expense . As boring as it might seem to spend some time on lease accounting implications the right choices in this area can save you a lot of dollars, and grief ! .. when it comes to financial reporting, tax time, etc.

Clients seem to slowly get the point here, in that your lease management becomes part of your overall business strategy, and takes some planning. It’s a good vehicle for getting some communications between the users of assets in your company as well as the finance side of the business!

In that manner we ' preach' to clients that lease arrangements are driven from several areas of management thinking:

The ability to borrow

The convenience provided by leasing companies

Risk avoidance in asset ownership via an equipment loan

Tax and accounting implications/benefits


One of the most powerful examples of risk avoidance in asset ownership via assistance from Canadian lease companies is the area of technology and computer financing. Who in their right mind, asks the business owner, wants to take on the risk of technology obsolescence in the area of computing, which seems to change every 5 minutes, including the newest grey area of computing, ' THE CLOUD '.

Does an equipment loan or lease have a lower or higher cost? That’s a typical question from many clients who are at the crossroads of the lease vs. buy decision. This is where your finance folks or accountants take variables into effect such as your firms cost of borrowing, the rate in the lease , and hopefully always making every aspect of their comparison an ' apples to apples ' assessment .

Other factors in the lease vs. buy decision might include down payment scenarios, credit covenants with current lenders, depreciation policies, residual value of the asset at the end of the lease or loan, etc!

As we have shown, an equipment loan or lease might not always be as simple a consideration as you might think. But it continues to be the financing of choice, everyday, for thousands of Canadian businesses. Speak to a trusted, credible and experienced Canadian business financing advisor today about getting on track with Canadian leasing companies for asset finance.





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_companies_equipment_loan_asset_finance.html

Why Canadian Business Is Turning To Accounts Receivable Financing Via A Factoring Company For Survival And Growth

Balance the Cost and Benefits Of A/R Finance In Canada


Information on accounts receivable financing in Canada . How to determine the benefits and cost of using a factoring company for working capital.





Small and medium sized businesses in Canada are almost always facing a financial challenge with it comes to funding to both grow, and yes even survive. However unfortunate, the reality is that thousands of firms have somewhat limited options to meet the funding challenges of their business.

Is there a solution? The answer, simply, yes. One of those solutions is accounts receivable financing via a factoring company or invoice discounting firm.

So why do those thousands of firms consider a/r financing as an alternative to term loans , or even the costliest method of financing, giving up part of your owner equity . Simply because they are in a position, with the right knowledge, to utilize, rather... monetize one of the largest, if not the largest asset on the left hand side of their balance sheet , their receivables.

A/R financing simply speeds up cash flow and allows you to finance growth by monetizing your receivable portfolio, in whole or in part. The process itself is simple; it’s who you partner with and how you structure your A/R financing (and what you pay for it!) that becomes somewhat of a challenge for Canadian business owners and financial managers.

In Canada two types of working capital finance via invoice finance are available. Under the most common scenario you ' sell ' your invoices to your factoring company - they advance you the cash, pretty well the same day, and they begin a process to collect that receivable as it becomes due from your client.

The other alternative, less common but our absolute recommended solution is that same sale of your receivables, but with you doing all the billing and collecting. In both circumstances there is essentially no limit on the amount of financing you can attain - naturally you have to have the sales to support that financing, but more often than not with most clients we talk to sales isn’t the problem, financing is !

If we had to say what confuses, or concerns the majority of first time clients in accounts receivable pricing we would have to put it down to two issues, the cost, and the daily mechanics of this financing vehicle.

So what's the best way to both understand and justify the cost of A/R finance? This is where the ' rubber hits the road' so to speak. The best way we can explain it to a client is that you have to look at the cost of this working capital from a couple different angles. One is that you are already carrying accounts receivable, so you have a cost. If the clients are low margin profits to you and taking a long time to pay that cost is significant, often as much or more than the cost of A/R finance.

The other way to look at it is that there is a large value to cash in the ongoing operations of your firm. You can maintain solid relations with suppliers and vendors by paying them promptly, taking advantage of discounts, as well as capitalizing on the buying power of your new found cash. A typical discount on, say, a 100k invoice in Canada is $ 2,000. Simply speaking, it has cost you $2000, on a 30 day basis to receive $98,000 for your invoice. But, consider this, take that 98k now and negotiate better pricing of say 3% less on your vendor purchases, and pay your vendor on delivery or via a 2% prompt payment discount. That combination strategy has saved you 5%, plus, you're ' liquid'. Talk about a winning strategy.

The time it takes your clients to pay, as well as your monthly volumes ultimately dictate your pricing in accounts receivable financing in Canada.

As we said the benefits of utilizing a factoring company are quite clear. Unfortunately in Canada the method in which fees and benefits are presented often lack clarity to the first time A/R finance user. Want clarity on pricing and benefits of accounts receivable financing in Canada? Consider talking to a trusted, credible end experienced Canadian business financing advisor for info on this innovative working capital vehicle.







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/factoring_company_accounts_receivable_financing.html