Business Equipment Leasing And Financing In Canada . When And With Whom To Lease

Carefully pick your partner and pick your solution in Canadian business lease financing .


Information on equipment leasing in Canada . When business lease financing makes sense, and what companies you should be dealing with .



As always, it's a question of the right time and right place. We're discussing business equipment leasing in Canada. When should Canadian business owners and financial managers consider lease financing for asset acquisition and use. We've got some basic checklists on what works when, and, as importantly, with whom!

We're forgiving you if you feel that the many advantages of equipment finance in Canada are sometimes overdone, or overstated. There is of course things such as ' pride of ownership ‘. Furthermore, some, certainly not all assets appreciate over time, or at least hold their value, so there are certain times when 100% purchase for cash / outright ownership seems to make sense.

Additionally, if you enter into an operating lease scenario you have certain obligations to purchase or give back the equipment at the end of the lease. What then, especially if a suitable alternative or upgrade isn't available?

It's just that we think we can count on one hand the amount of assets that appreciate over time these days, and items such as computers certainly aren’t one of them.

So when exactly should the business owner or financial management of a firm consider leasing? One of those cases might be when it's simply cost prohibitive to purchase an asset outright, or if the rates to finance that purchase via a loan seem too high.

Most businesses in Canada don't fully investigate the accounting and tax implications of a lease vs. buy scenario. If they did they might find that those benefits, coupled with a reasonable and affordable monthly payment make business equipment leasing an obvious choice.

Additional guidelines that might make you consider lease financing are areas such as equipment obsolescence, usage that is only temporary in nature, etc.

So now that you've determined when to lease the question becomes ' with whom ‘?! As you consider a lease firm you should, at the same time have a reasonable working knowledge of what type of lease you want. That translates into 3 basic choices in Canada, the lease to own, the lease to use, and the leasing back of your assets. Respectively these choices are known as capital leases, operating leases, and a sale leaseback.

We can imagine the inexperienced business owners or financials manager’s quandary, or indecision on who to deal with. In Canada you have 4 choices, and it makes sense to know the benefits and basics of each of these.

Your four choices are commercial finance leasing companies that are most often private firms specializing in leased assets. Choice # 2 bank leasing companies in Canada; these are closely tied to their parent companies, Canadian chartered banks. Choice 3 is often a fabulous choice, these are the prisoners! Prisoners? Well actually we mean captives, they are finance firms related directly to the manufacturer of the business equipment you wish to lease.

Choice # 4 is often the safest bet. It's a Canadian business financing advisor who has knowledge and relationships with all of the above firms .These players, with the right credentials and reputation can bring true value and save you thousands of dollars on any single transaction. Look for past experience, credentials, etc.

Knowing when and with whom to finance your assets can put your firm on the track business financing success.






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/business_equipment_leasing_financing_lease.html

Receivables Funding In Canada . The Good , The Bad And The Ugly ! Sales Of Receivables Factoring Works If …..

Winning Financially With A/R Finance in Canada


Information on sales of receivables funding for Canadian business owners . Factoring works best under these conditions .



It's probably just us, but when it comes to business financing in Canada no other method of financing your business is as controversial or misunderstood as sales of receivables financing, aka factoring funding.

Let's examine some key points that will clarify the ' Good, Bad and Ugly ' of receivable financing in Canada.

Let's start off with the ' good ' as we think you will soon might find that the ' bad' and the ' ugly ' are simply misunderstandings , but we'll let you decide.

So whey do Canadian business owners and financial managers embrace this newer form of financing in Canada. Simply because it supercharges your cash flow - by selling your A/R you in effect maintain cash flow for operations, and eliminate the need for additional debt or taking on or putting in new equity. We constantly remind clients that the dilution of your equity is in fact the costliest method of financing, everyone pretty well agrees on that.

Another point in our ' Good ' column is that if structured properly your sale of receivables financing sets you up for unlimited capital and cash flow - simply speaking your working capital grows lock step with your sales. Not too many other methods of business financing can make that statement.

The Ugly. The following point is simply the most recognized complaint when we talk to clients. It involves the mechanisms under which A/R financing works. 99% of the structures used by factor companies involve the factor firm validating the credit worthiness of your clients, and getting involved in the billing and collecting of your receivables. Why. Their answer would be that you have sold them the receivable and it’s theirs to collect.

So that’s bad, right? Most Canadian business owners and financial managers that we speak to would say they would prefer to bill and collect their own receivables, and maintain those client relationships that are so important. Enter ' the good '! Here's the good news, most Canadian businesses contemplating sale of receivables funding / factoring are eligible for what we term ' Confidential receivables financing ‘. Utilizing that mechanism your firm bills and collects its own receivables, maintaining total control on the billing and collection function. You in term remit those funds to your finance firm, simply because you have been advanced those funds already.

The Bad. Here is where misunderstanding reigns supreme in A/R financing. It's the ' price ' or ' cost ' of this method of business financing. When you finance a receivables portfolio a factor firm buys your A/R at an ongoing discounted price. That price, on balance, in Canada is 2-3%. Business owners in Canada confuse that purchase discount fee as an interest rate, and that’s a large part of the problem. In reality its how you manage that 2-3% that ultimately reflects your total cost of financing. You can manage that cost by adjusting part of the cost into your cost of sales - we remind you that you’re already absorbing a large cost by carrying receivables and inventory already.

And by the way, with that new found sale of receivables funding cash flow you can now take supplier discounts if they are offered, which by the way, are generally in the 2% range. Want more good, rather than bad or ugly?! You can now enhance your purchasing power with suppliers, and if you choose (not always recommended by us) you can offer extended terms to your clients that your competitors might not be able to.


The bottom line today. Thousands of Canadian businesses embrace sale of receivables funding / factoring everyday. Consider speaking to a trusted credible and experienced Canadian business financing advisor to wade through the good of this method of business finance, and you might just find that bad and ugly are either misunderstood or don't exist . That’s a working capital solution!





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/sale_of_receivables_funding_factoring.html

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