Making Sound Choices With Your Leasing Finance Company? Canadian Operating And Capital Lease Solutions

Cover Your Assets With The Right Lease Finance Strategy!


Information on choosing the right leasing finance company for your capital and operating lease solutions . Know Your Common Types of Choices!




The right leasing finance company. Sounds like a simple choice, right? But the reality is that when it comes to selecting the right capital and operating lease solutions for your firm can you really say you feel 100% prepared.

Abe Maslow was a famous U.S. professor, widely published and studied. He once wrote ' when the only tool you have is a hammer every problem resembles a nail'! No pun intended, but talk about hitting it on the head ! Most Canadian business owners and financial managers know they need a finance solution ; they know lease finance works, but quite often are very unclear on some basic selection criteria you need to have under your business belt when it comes to signing on the dotted line.

There are several major categories of leases and one, probably not all, is the right one for any particular equipment financing you enters into. When you win at the asset finance game you no doubt have one step on your competition. So it’s a question of knowing which benefits might accrue most logically to your firm.

Unlike the U.S. where things are a bit more complex, the leasing finance company in Canada has two major products, the lease to own solution, aka ' capital ', and the lease to use option, aka ' operating '. The operating lease is also often referred to as a fair market value lease or ‘true lease' , and we hasten to add the capital lease is also known as a finance lease .

Each of these two products exists to serve some basic needs of your company. A key point that is often overlooked by the lessee is the fact that either of these two leases can in effect be ' bundled ' to include other of your supplier’s deliverables, including shipping, installation, warranty, maintenance, etc.

Although an operating lease could in fact include a bundled component more logically that is undertaken for clients who wish the lease to use, or capital lease option. In an operating lease these items would be fully priced out, and would probably increase the total ' all in ' rate you are paying.

The world of operating leases is diminishing a bit with the inception of new standardized accounting rules that are coming into effect on a global basis. Although many of the benefits of leasing in general come together in both capital and operating leases the whole operating lease scenario becomes a bit more of an accounting exercise .

In an operating lease there is no interest per se - that might seem confusing to many. But the lease is structured as a payment only scenario, with your choices, or obligations being the ability to return, upgrde, or purchase at the end of term fair market value.

You will not always see, or get clear explanations from a leasing finance company on the type of lease, capital or operating, that you are entering into .That because the Canadian marketplace has lessors with either small, mid, or large ticket focuses. It's up to you to know who is offering what, what they are calling it, and if things are as they appear and promised.

Speak to a trusted, credible and experienced Canadian equipment financing advisor who can assist you in separating the promise and the deliverable for your firms benefit.








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_finance_company_lease_operating_capital.html

Riddle Me This. Why Is The Cost And Mechanics Of An Accounts Receivable Financing Loan And Receivables Discounting So Misunderstood?

A Campfire Discussion on Invoice Discounting and Financing In Canada !


Information on the accounts receivable financing loan and why invoice discounting in Canada is often misunderstood and confusing to Canadian business owners .



An accounts receivable financing loan? We think we have just answered our own question on the strategy known as invoice discounting or invoice finance... namely, the part about ' misunderstanding'. Why is that? Simply because technically it's not even a loan... so no debt, no interest paid, etc. Let's explain.

Thousands of Canadian businesses sell to other businesses on credit - hopefully they are creditworthy clients. That's the essence of the accounts receivable discounting solution - you no longer have to wait to get paid, thereby solving the problem of working capital and cash flow shortages for your business.

It couldn’t be any simpler, so why is there so much misinformation about this method of Canadian business financing. We think it boils down to some of the terminology, and the fact that the many firms that offer this type of finance each come at it from a different focus, direction, and daily mechanics .

Under the traditional way of accounts receivable financing you submit your invoice, or invoices to your finance firm partner. Hopefully you have chosen the right partner... more about that later. After you have submitted that invoice you get immediate funding - typically in terms of a wire transfer into your bank account. The neat news here is that you can do this daily, weekly, monthly, basically whenever you like. And by the way, you are no obligated to do this all the time; it’s your call to implement only the financing you need, when you need it.

The fee. Here's where misinformation abounds! The concept of ' financing' that A/R is in fact a sale of the receivable, not a collateralization. What do we mean by that ?Well, typically if you had a bank facility in place for your receivables they take a security agreement that covers off the collateralization of your assets, including of course a/r. So the bank is actually ‘‘lending “against that a/r, and charging you an interest rate on a per annum basis. Those bank interest rates are very attractive... if you of course qualify, which is a discussion for another day!

When an accounts receivable financing firm implements the same strategy their documentation states they are ' buying’ your invoice sales, not collateralizing them. They buy those at a discount, hence the term ' a/r discounting.

So whets the price on that sale. In Canada it's generally 2% if you are selling on a 30 day term. In effect it’s a reduction of 2% of your business margins. Where misinformation comes in is that fact that most Canadian business owners and financial managers don't understand the fact that they are already absorbing similar costs by in effect being the bank for their own clients. It's an expensive cost of capital. If you have the cash flow out of that sale you could... well... start the process all over, ie make another sale, buy more product... and generate additional profits. Instead of waiting 2-3 months for clients to pay, which seems to be happening a lot these days?

If you are financing your receivables via a bank they of course wish you the best of luck in collecting them - as little due diligence is done on who you are selling to and on what terms . In accounts receivable financing its incumbent on you and your finance partner firm to focus on a solid turnover of that A/R - it reduces the cost and generates cash flow more quickly.

Other key advantages or differences of accounts receivable discounting include the fact that facilities are generally unlimited - if you are generating sales you have constant, daily access to cash flow.

Picking the right partner is critical in A/R finance. Simple documentation and no hidden fees or terms are critical to your success when you use this financing. Our recommended facility is in fact confidential invoice financing, allowing you to bill and collect your own receivables.

Speak to a trusted, credible and experienced Canadian financing advisor. Clear up the misinformation on this unique method of business financing.








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/accounts_receivable_financing_loan_discounting.html

Canadian Equipment Financing . When And Why To Consider Business Leasing Companies For Funding Your Corporation

Equipment Leasing In Canada – Timing And For The Right Reasons !


Information on Equipment financing for Canadian companies . When and why to use business leasing companies for your funding needs .


Equipment financing in Canada. Let's discuss when... and why you should utilize business leasing companies for Canadian asset finance.

The motivations behind equipment leasing in Canada vary by client. The reality is, and many don't look at it this way, is that the motivators are actually economic and non economic, depending on the circumstances within each client. We find that many are surprised to hear that banks and insurance companies utilize lease finance on a very significant basis. Our clients can be forgiven when asking ' why would a Canadian chartered bank, with all the cash in the world (or at least most of it ! ) consider business leasing companies for their asset acquisitions?

Clearly it’s a case of non- economic for them, they rely on this method of asset acquisition as a way to address areas such as the ability to control technology for example, in their computing and telecom needs.

The equipment leasing industry in Canada is exceptionally robust and competitive this day. We actually think half the battle knows which firm, or advisor will best suit your various needs when it comes to pricing issues, cash flow structuring, accounting and tax implications, etc.

Again, the Canadian business owner and financial manager can be forgiven also for not knowing where to turn to when it comes to the various firms that have specialization in small ticket transactions, medium sized deals, and lease financing transactions in the multi million dollar ranges. It goes without saying that no one firm can be all things to all business. That is for sure.

The actual economic of why your firm leases, and when it leases are critical. You have to be in a position to have done, or be willing to do, some analysis on what aspects of equipment financing are most important to your firm. The bottom line? It's that you need to figure out what’s important to your company, whether its cash flow management, payment seasonality, tax benefits, the ability to ' refresh ' assets, and in many cases bundle in all sorts of other costs such as delivery, installation, maintenance / support, etc. It is then you are in a position to move forward with your equipment finance strategy.

What are then some of the other key points when it comes to why you should consider working with business leasing companies?

Those other points to consider might be as follows: You want to be in a position to match cash outflows with the useful life of the asset. In telecom and computing that is critical. In other cases it might be of primary importance to achieve a low lease rate inherent in the transaction - when benchmarked against your own firms cost of capital this alone is a solid reason to finance via lease.

If you are in a medium sized or larger firm the way your management is measured might make it a great idea to lease assets, as EBITDA and ROI calculations might factor into your managements or owners compensation criteria. That’s not our favorite, but it's a reality!

New accounting rules in place might make it more difficult these days to achieve true off balance sheet financing - but just the lower rates and monthly payments in an operating lease, plus the ability to return, upgrade or extend alone still make this option feasible and viable for your firm .

So we guess it's all about timing, knowing when and why your firm should utilize equipment financing from Canadian business leasing companies. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you to achieve maximum use of those ' when' and ' why ' criteria.




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_financing_business_leasing_companies.html

Best Practices On Getting Canada Government Loans. Let The SBL Loan For Small Business Work For You

Get On Board with The Gov’t SBL Loan !


Information on Canada government loans. What best practices can Canadian business owners use to successfully receive the SBL loan for small business.



Canada government loans for small business. Are there some ' best practices ' to follow to ensure they work for you, and that of course you get approved? We think there are.

If you have worked in a larger corporation at any time (trust us ... we have) they always talk about ' best practices. They are defined as practices or methods that will ‘consistently show results superior to those by other means’. We’re not the biggest fans of buzzwords and ' corporate speak ' but we will say that it does seem quite applicable to our subject, the SBL loan in Canada.

When Canadian business owners, from start up to SME consider applying for Canada government loans it’s all about the rules. And when it comes to those rules that's where it gets a little tricky, because if the truth were to be told ( and we're telling it ) there are two sets of rules . One is the rules set out by the Small business loan program (The CSBF) and the other rules seem to be set out by those that run the program on a daily basis, ie the Canadian chartered banks and other miscellaneous institutions.

That’s where solid ' best practices ‘tell you that you don't want to be really ' winging it’ when it comes to applying and getting approved.

In reality the short list is really just that, quite short when it comes down to program qualifications. You need a crisp business plan and cash flow projection. Your plan should cover some real basics, and we assure clients it doesn’t have to read like a book. That's not the intent.

You just want to be able to convey a concise description of who you are, what your business is, who you compete against, and how you will operate and sell. It's as simple as that. If you can talk to those key points we feel you should be able to convey them in writing also, don’t you think?

That business plan and cash flow is the key document in successfully obtaining Canada government loans for small business. Those loans range up to $ 350,000.00 in value, have great rates considering that you are a start up or SME enterprise, and additional enhancements to the program include limited personal guarantees (clients love that one) as well as the ability to prepay without penalty.

Supporting documents are key to your plan, and they include what we always have felt were the basics - tax returns showing you have no arrears (after all it’s a government loan!), copies of your incorporation data, a premises lease. and supporting invoices or quotes you want financed .

All of the above data we shared are in fact our recommended ' best practices ' when it comes to the small business loan program in Canada. You increase your chances via an organized and positive approach, and basic attention to detail.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you on the approval your firm or start up deserves.




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/canada_government_loans_loan_small_business_sbl.html

Don’t Gamble On Franchise Funding Success . Finance Your Franchising Opportunity Properly!

Canadian franchise financing success , without the risk!


Information on franchise funding in Canada . Your ability finance your franchising opportunity properly is key to your success as a franchisee


Franchise funding in Canada. At times does it seem like you have to take a real gamble on the franchising opportunity just to complete a transaction properly? And then finance it? Is there a better way? We think there is, and here's why, and how!

We're the first to admit making that franchise purchase decision is a huge leap of faith for many existing and would be entrepreneurs. Not only is it appropriate and important to align yourself with the proper franchisor, the challenge then becomes assembling what we could call a small ' team ' of advisors and mentors. So who is on that team - typically it’s a key contact at your franchisor, your accountant or franchise lawyer, and a financing advisor of some type - it might be your banker, it might not be.

So if you have a team in place is there still a gamble and risk here? To some degree yes, as the question still hangs over your opportunity, namely ‘How does franchise financing work and can I convince a lender of some sorts to approve my transaction?”

If there is any good news in the cloud of doubt we seem to be casting (we’re not trying to be negative!) here it’s simply that a franchising opportunity is viewed as a positive business model in today’s Canadian lending landscape.

Getting the right terms and conditions and utilizing the best finance program for franchises is key. So what then makes franchise funding and getting your acquisition in place a ' gamble ' sometimes? One thing is the quality of your team - the advice and direction you get from your franchisor, your finance partner, your specialized franchising lawyer etc are worth a million dollars... or close to it!

When it comes to financing you absolutely must be working with a lender of financing advisor who is both positive, and yes, experienced! in franchise finance. The reality is that there are always naysayers in any crowd, so if you get the old line ' we like you and your idea but we just think it's too risky ' you are absolutely going to have to replace some of our aforementioned team mates!

Who are the preferred lenders in franchise funding in Canada. You might be surprised to know it’s the federal government! Under the auspices of the CSBF program thousands of franchises are financed in Canada every year. Is it an automatic approval? Hardly - but you can eliminate a lot of the gamble we have been talking about by simply focusing on a crisp presentation.

That includes a solid business plan , cash flow, ( Cash repays loans by the way !) and the ability to position yourself as having an appropriate level of business or industry experience within the sector you are entering into with your franchisor .

While we identified your franchisor as part of your team we would quickly hasten to say that you’re really gambling on success if you are relying on the franchisor to help you with financing in a direct manner. 99.999% of the time they don't and won't.

That is why the CSBF program we mentioned is so popular. It’s a largely guaranteed government loan that still gives you tremendous financing flexibility. Other sources of financing include specialized franchise lenders and commercial finance and leasing firms who can assist in closing your transaction successfully.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in removing the ' gambling ' aspect of successful franchise funding in Canada.





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/franchise_funding_finance_franchise_opportunity.html

Let An ABL Revolver Facility Be Your New Canadian Asset Backed Lending Business Line Of Credit

Looking For A New Type Of Business Line Of Credit ?

Information on the ABL revolver facility business line of credit . This financing via asset backed lending is a strong alternative to traditional bank financing .




The ABL Revolver facility. Is it the business financing mechanism that can fill the gap your firm is experiencing in a business line of credit? Asset backed lending is working for thousands of firms who probably just several years ago had never heard of it! Here's why.

To understand the benefits, and the growing popularity of this type of business credit it's important to have a general sense of the landscape. The Canadian economy is of course way past the financial crisis it encountered in the 2008-2009 timeframe. But while that seems to be well behind us a lot of things changed in between. The bottom line is that post crisis lending for Canadian business owners and financial managers diminished and changed significantly.

How did things change? Simply put stricter lending criteria are in place and certain industries are out of favor. Canadian banks are renowned for their strength, stability, etc and they are always up for firms that have stellar credit and prospects in industries that are very much in favor. That’s great of course ... except ... what about the thousands of firms who have challenges and still have a demand for expansion of their business credit line?

That's where the ABL revolver business line of credit comes into play. Your firm might not be ' creditworthy' when it comes to a traditional Canadian chartered bank, but if it has assets, notwithstanding leverage or other issues it is still very much a candidate for asset backed lending.

ABL facilities focus solely on collateral - That's where 99% of the emphasis is, and the asset backed lender has the expertise, people and systems to lend against that collateral. The assets in question are the basics: inventory, receivables, equipment that is not encumbered and even real estate.

Your revolver facility, similar to a bank line of credit is monitored and managed, and yes, margined significantly against those same assets. They are in effect your ' borrowing base '.

It's ironic but many banks actually refer deals to an asset based lender because they are not really in position to ' count the boxes' in, for example, an inventory situation. The ABL lender is very happy to count the boxes (as long as they are full!). So just to reemphasize our point, the bank is interested in monitoring your performance via financial statements; the ABL lender is focused on monitoring those assets. You report on those assets probably much more than you would in a typical bank environment, but the advantage is pretty significant - you are getting typically 90% of A/R, anywhere from 30-70% on inventory, and market values in real estate and equip.

The asset backed lender is set up to for real ' heavy lifting' on your assets. By a combination of reporting and periodic visits they can feel comfortable in lending against all your business assets, notwithstanding financial performance. A company can still be losing money, having a bad year, in restructuring mode, etc and still have access to very significant business lines of credit.

If your company has a good mgmt team, proper asset controls you can experience significant upside in business credit via an ABL.

Speak to a trusted, credible and experienced Canadian business financing advisor who can help you ' fill the gap' in your business line of credit 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/abl_revolver_facility_asset_backed_lending.html

Buying And Financing A Business Acquisition . Loans To Finance Existing Businesses In Canada

Buying a business? Need Financing ?

Information on buying and financing a business acquisition in Canada . Loans and Finance availability for the SME sector of Canadian business .



Buying and financing a business acquisition is one of the major challenges of firms in the SME (Small and medium enterprise) sector in Canada.
Unlike the big boys who have access and funds available to hire expensive talent to complete the transaction the Canadian SME business owner and financial manager has the desire to complete a transaction , but needs help and information they traditionally don't have immediate access to .

Naturally acquisitions can be completed via an all cash purchase, the reality is that most businesses don' have the capital to complete a deal in that manner. And another thing, completing a transaction without acquisition loans and funding doesn't make perfect sense all the time because you are not taking advantage of leverage and return on investment.

So what information is in fact required as you are contemplating buying that firm? Is there in fact a ' short list ' of information? A great start would be some basics such as a business plan or executive summary which profiles the transaction.

Other critical data are the financial statements of the firm you are acquiring, some cash flow analysis, and most importantly, some financial modeling around the future profitability and cash flow generation of the combined business.

It’s those cash flows of course that will repay your business acquisition loans and financing!

A key concept around your deal is the equity component in the transaction. There has to be some reasonable equity in the combined firm, and that can come from your firm, the assets of the firm you are acquiring, or potentially some new equity and ownership participation.

So what can go wrong in a transaction like this? Well without the assistance or information we have spoken of, lots!

Timing is always a key component of your deal. The closing of your transaction can be driven by external deadlines, the deadlines imposed by the seller, or your own commitments to closing. Bottom line, leave enough time - it’s as simple as that.

A lot of transactions we look at have some huge ' gaps ' of missing information. To complete a proper purchase and financing a business acquisition properly with the right amount of loans, debt, etc requires all the missing pieces in the financial puzzle to be on the table.

So how can the acquisition be financed? There are some great and innovative strategies you can utilize to complete a deal successfully. They include and asset based lending scenario which monetizes the assets of the sellers firm. Smaller transactions under 350k can be efficiently handled via the Canadian CSBF loan program which has solid rates, terms and structures.

Business people need to remember also that you need to borrow enough to not only acquire the business, but to ensure you have the working capital and access to liquidity to grow the firm.

There are some great reasons to consider buying and financing a business. Some typical reasons include diversification, the ability to grow sales and reduce costs on a synergistic basis, and in some cases you just might have discovered a ' jewel in the barn ' - the type of firm that is undervalued or has a motivated seller.

Your key goals are to analyze the operating activities of the firm to be acquired, ensure you have a financing plan in place, and, as we said ensure you have the capital ready to ensure proper cash flow and replacement and upgrade of any needed assets.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business acquisition loans and financing needs.







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/buying_financing_business_acquisition_loans.html