Don’t Overlook These 5 ( Other ) Leasing Finance Issues On Lease Documents In Canada

Successful Equipment Leasing In Canada Depends On …


Information on leasing finance in Canada and why issues such as lease documents should not be overlooked re risk and advantages for lessees in Canada .


Leasing Financing in Canada. It could not be any more popular than it is. In fact a recent major study indicated the following:



Canadian business optimism is increasing

Canadian firms have challenges accessing certain types of finance (not leasing by the way!)

Access to asset financing was the 2nd largest concern expressed by the majority of business in Canada (No surprise that government bureaucracy was the largest concern)

Canadian Asset lenders are the largest provider of debt asset financing in Canada behind the Chartered banks in Canada

84 Billion dollars of assets are under finance in Canada by asset based lenders/lessors



Awhile ago, we wrote on 5 key documentation issues that Canadian business owners and finance managers have to ensure they address when it comes to lease documents . We pointed out that often it’s the terms, conditions and documentation around equipment financing in Canada that makes or breaks a successful vs. non successful lease transaction.

Those issues were master leases, warranties, ensuring you understand the different between capital leases and operating leases, asset registration issues, taxes, and return requirements. So that's it right?

But wait, as the fellow on TV says, ' there's more! Let’s examine some other key issues you probably need to consider to ensure that confidence that comes with knowing you have entered into a win/ win transaction with a lessor of assets.

One of those is maintenance, meaning that you need to ensure you understand your written obligations on maintaining the asset in good working order. This becomes even more important when you in fact have the intention or obligation of returning the asset in question.

Insurance becomes our 2nd issues to ensure you consider. You will often be required to produce a certificate of insurance which names your lessor partner as beneficiary in case of loss, theft, damage, etc. That’s just common sense of course, given they are financing the asset.

Thirdly, in certain cases you might want to ensure your lease specifies you have the right to assign the transaction to a third or related party. Naturally you want to ensure this right, if required, is not ‘unreasonably withheld ' as the lawyers say.

You may also wish to address the area of location to ensure you have the right to move the leased asset to another location, perhaps a branch plant or other office, etc.

Finally, in the case of say technology assets, i.e. computers, telecom assets, etc, make sure you clearly understand what can be added to or removed from the asset. In our tech example a good example might be software or additional disk drives, etc.


There you have it, 5 ' OTHER ' things to consider in the critical area of lease documents in Canada. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in structuring a transaction that makes sense.

7 PARK AVENUE FINANCIAL

CANADIAN EQUIPMENT FINANCING EXPERTISE





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_lease_documents_canada.html

Let Financing Receivables Stop That Feeling Of Borrowed Time . “ Lien “ on Canadian Invoice Finance And Factoring For The Solution.

A Canadian Financing Strategy .. that works!


Information on financing receivables in Canada . How the invoice finance and factoring solution helps Canadian business stay cash flow positive!





Financing receivables in Canada. It's no secret that invoice finance, aka ' factoring ' is part of the ' new normal ' when it comes to Canadian business financing.

There are probably thousands of Canadian businesses who constantly feel they are living on borrowed time. That is why invoice financing, collateralized by a ' lien ' on your receivables has become a solution of either choice or necessity for the business owner or financial manager.

Oh and by the way some of the biggest corporations in the world also utilize this method of financing their growth and largest asset, the A/R.

A lot of the activity around financing receivables is, unfortunately, being driven by... yes; you guessed it, your clients. Why is that? Simply because they either by policy, or practice, have chosen to slow down their payments to yourself. We're aware of one case wherein one of the largest companies in the world advised their printers they would pay all invoices on 120 day terms. Talk about a painful hit to cash flow!

While we certainly realize that the typical payments from your clients are probably closer to 60 days these days, (that kind of seems to be the new norm) it allows a financing receivables strategy to ensure you take much less of a hit on your cash flow and working capital.


The triple whammy. That's our own term for what else is happening out there in the Canadian business financing marketplace. Your suppliers slow down, bank financing becomes harder to achieve, and you still want and have the ability to grow your company. Talk about a perfect storm that comes together to challenge your firm in every manner!

One of the reasons that invoice finance is so popular these days is simple that is a ' stable ' source of funding for your firm. What business owner or manager doesnt want a reliable source of funding and working capital .in the current economic environment? That is a basic premise of invoice financing or factoring - the fact that your facility can be reviewed anytime, within pretty well a days time, to be increased based on your needs.

Cost is often a factor that turns off many clients who look at financing receivables. While the cost is higher than traditional bank finance that has to be balance off against access to capital. In trying to present a balanced outlook on invoice finance we also note that you typically have to report more regularly on your business progress - that typically includes monthly reporting on aged receivables, payables, and a balance sheet and income statement snapshot. We don’t think that necessarily is a bad thing though, as many clients tell us that process allows them to understand and run their companies better.

So, if you want to stop that feeling of ' borrowed time ' let a invoice finance firm ' lien ' on your receivables . That immediate uptick in cash flow and working capital should allow for better business performance... with less stress! Speak to a trusted, credible and experienced Canadian business financing advisor today on how invoice finance works, for you.

7 PARK AVENUE FINANCIAL

CANADIAN RECEIVABLES FINANCING EXPERTISE





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/financing_receivables_invoice_finance_factoring.html

Financing Sources For Alternative Finance Needs In Canada . Why Asset Based Lending Works

New Sources Of Finance for Challenged and Growth Businesses

Information on financing sources for alternative asset finance in Canada . When traditional doesn’t work!

New financing sources in Canada can be a challenge for firms that are in one of three categories when it comes to alternative finance. They might be a start up, or perhaps they are in hyper growth mode (traditionally banks and certain other institutions don't like hyper growth!), or, finally, the company might be recovering from major challenges. They are in fact in turnaround mode and the faster the better.

Even firms that might be coming off a bad year, with solutions in place do in fact find that new sources of finance are difficult to achieve.

Why is that? Well, forgive us for sounding like father time here, but the word ' credit ' as in ' business credit ' comes for the Latin word ' credo ' which is to ' trust and believe '. And, surprise, surprise, your vendors, or your current bank, or worse yet, your valued suppliers can probably be forgiven for mistrusting a bit after your firm has gone through a challenging period.

So the goal of the Canadian business owner and financial manager is, of course, to reinstate that relationship to its former glory!

That's where asset finance comes in, because your business asset, ie receivables, inventory, equipment, and perhaps real estate allow you to focus on mending that reputation, or loss thereof , you have with our three aforementioned parties .

If it was a perfect world, (apparently its not) the best route would be standard ' traditional' financing as we know it in the Canadian marketplace. That typically comes from a bank, is has great flexibility, rates are low (they are lower than ever these days!) and are easily achieve, if (here it comes ...!) you have solid business creditworthiness. That of course means profits, clean balance sheets, and cash flow and debt ratios that make sense... to the bank.

That is why asset based loans and financing, whether they be bridge loans or straight asset monetization of working capital accounts.

Asset based lending in North America goes back to the early 1900’s. In Canada it has gained significant traction in recent years, simply because specialized non bank asset lenders are comfortable with your business collateral .Although rates are typically ( not always, but typically ! ) higher than the Canadian chartered banks they provide great liquidity for receivables, inventory, fixed assets, and even a real estate component can be thrown into the mix .

If you are not the ' investment grade ‘ credit that is sought by banks and insurance companies then investigate asset based lending financing sources in Canada . Typical advances of A/R and inventory are 90% and 5-80% respectively.

Speak to a trusted, credible, and experienced Canadian business financing advisor for alternative asset finance solutions in Canada.

7 PARK AVENUE FINANCIAL
CANADIAN ALTERNATIVE ASSET BASED FINANCE EXPERTISE


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/financing_sources_alternative_finance_asset_canada.html

Secrets To Growth Finance in Canada . Get Rid Of Business Funding Challenges Once And For All!

Canadian Business Financing



Information on growth finance strategies and tools for successful business funding in Canada



Business funding in Canada. As a manager or business owner growth finance tends to be ' top of mind ' when it comes to your job of being able to identify both the type of funds you need as well as the timing around that challenge.

Growth and yes, even survival in Canada revolves around three key elements, profit, cash, and general cash flows. If you ultimately can't get positive closure on those three issues, simply speaking, your firm won't survive, and we read about those casualties in the Canadian business papers everyday. It's ironic, but even companies that are experiencing some serious challenges can quite often be in growth mode.

The fundamental concept around growth finance is simple - as you sell more you need to build up more inventories, receivables, and probably some measure of fixed assets.

In the case of inventory and A/R you simply need stock on hand and your customers of course want, and often demand credit terms. Some even want better credit terms!

It might not be obvious, but as you grow you automatically become eligible for growth finance - as you pay you obligations in the ordinary course of business and customers pay you , you are in effect getting some measure of business funding - generally though .. NOT ENOUGH!

As your payables increase you have the ability to manage them for greater cash flow - in effect you're stretching your payables or asking your valued suppliers for better / longer terms. However, if suppliers perceive you as unable to pay, or slow pay you might find they are unwilling to assist, and in fact taking the opposite tact of shortening payment terms.

Whether you think business is great ( cash flow, profits, sales ) , or if you're experiencing challenges in any of those areas you cannot lose the fact that you need some measure of supplier finance as well as external business funding .

Many firms that find themselves in a crisis look to a couple time tested tools to accelerate cash flow internally. They do that by monitoring and focusing on sales to inventory and sales to A/R relationships. Managing those two carefully typically can get any company back on track.

Business funding in Canada, for the majority, is done via or chartered banks. But many firms find they might no longer be in a position to either get any business credit, or, as common, the amount of credit they need.

So are there secrets and alternatives to other Canadian business financing alternatives? New capital and cash flow can come into your company from a variety of sources.

They include:

Receivable financing
Asset based lending
Sale leaseback / bridge loan strategies
Tax Credit Monetization
Unsecured cash flow loans

All of these are available from a variety of sources. The trick or challenge rather is determining which one you need, when, and from whom?


Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in determine solutions to growth finance.

7 PARK AVENUE FINANCIAL

CANADIAN GROWTH FINANCE EXPERTISE








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/growth_finance_business_funding_canada.html






Stan Prokop

Can You Buy Your Competitor Via An Asset Based Lender ? Unique Acquisition Strategies!

Here’s A Great Asset Based Lending Strategy To Finance An Acquisition !

Information on how you can use an asset based lender to buy a competitor via a acquisition finance strategy .. that works!



Ever had the idea to buy a competitor? Even more so have you wondered how this acquisition could possibly be done? One method is to use the service of an asset based lender to complete such a deal.

Even more interesting ... we couldn’t help but catch an article in one of the two leading business dailies in Canada... it said... (To us it screamed!) ‘BUY A COMPANY FOR NO MONEY DOWN! ‘... and this was from one of Canada's leading investment advisors!

The concept here was simply all about ' assets ' and a formula derived from Ben Graham, who is acknowledged as being one of the most prudent and smartest investors ever. (Buffett is a student of Graham... so something there must be working!

The actual formula Graham used to derive this strategy was to take all the current assets of a company, deduct all liabilities, and get a number he called ' net working capital '. If you know a bit about your competitors financial statements you will know this formula is not always going to work ... but if it did... well you have got the makings of a deal!

There is of course one key assumption here which is that all the assets are worth what they say they are worth on the balance sheet. Naturally there has to be some factoring of what they are really worth but that new number can be financed by your asset based lender, allowing you potentially to complete a transaction .

In essence what you have done here is used a finance strategy to finance the collateral in the company.

There are of course many reasons you might wish to acquire a competitor - they include revenue growth, economies of scale, market domination, etc. In many cases you might be aware of a motivated seller, perhaps a firm who is in financial difficulty or who wishes to execute some sort of exit strategy for the owners.

In most cases an asset based lender will have to consider paying out the current lender, which well might be a Canadian chartered bank. Other issues that need to be addressed are the potential profitability of the new firm going forward. Issues that can also help you move the transaction forward are your ability to normalize earnings and assess need for further assets. Also a vendor take back is a great strategy at this time.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you to by or acquire a competitor via an asset based lender acquisition strategy.

7 PARK AVENUE FINANCIAL

CANADIAN ASSET BASED LENDING AND ACQUISITION FINANCING EXPERTISE


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/asset_based_lender_buy_competitor_acquisition.html

Growth Financing Challenges ? Don’t Trade Off Growing Due To A Cash Flow Problem !

Canadian Growth Finance Problems .. and Solutions!


Information on growth financing challenges in Canada . Don’t let a cash flow problem prohibit your company growth!




Growth financing in Canada. It's a harsh reality for many business owners that with new found revenue growth comes a cash flow problem. Knowing why that problem exists and what to do about it is what we're talking about today.

Cash flow goes higher and lower with growth. Simple as that. But why those changes ? That is the key question. It's because your working capital accounts change all the time, every day in fact. Those working capital accounts are receivables, inventory, and your payables on the other side of that balance sheet.

So if there is any one point you can take away here its that as your assets and payables increase your business cash flow goes.... DOWN! It therefore goes without saying (almost) that if your sales go up and your working capital assets such as inventories and A/R stay the same or decrease your working capital cash flows get ... Better!

It’s your ability to either finance, or turnover those working capital accounts that will ultimately make you successful in growth financing and solving any cash flow problem you have.

The big take away here, again, is that you have to watch your receivable and inventory growth. Not all companies have an inventory challenge, such as service Type Company, but pretty well all of us have A/R. One internal way you can address a cash flow and working capital challenge is to slow down payables. As we have pointed out in the past that is a very double edged sword given that you value your supplier and vendor relationships which can often be key to long term success.

Don't forget also that when your sales go down for whatever reason that also has, somewhat ironically a positive effect on your working capital. The trick here is to also reduce some of your expenses as much as you can.

It's also a good tip, over time, to monitor your levels of inventory and A/R in conjunction with sales going up and down. That's because it’s simply a great tool for predicting better or worse cash flow in the coming months based on history.

So is a cash flow problem necessarily a bad thing. Ironically, definitely not. It's all about the reason for that issue, which typically in a good environment is growth.

We've talked a lot about internal issue and knowing when and why a problem might exist. But a better questions form clients is of course ' what solutions exist?! '.

Here the key rule of thumb is to match the right type of financing with the actual problem. To put it even more clearly, finance shorter term working capital with short term cash flow solutions. In this case we're talking about some traditional and not so traditional solutions.

In Canada they included bank lines of credit, receivables financing, working capital facilities, non bank in nature that finance both A/R and inventory, as well as purchase order or supply chain financing. If you have a SRED claim you can even finance that for short term cash flow, as these loans don’t even carry monthly payments!

Speak to a trusted, credible and experienced Canadian business financing advisor for solutions to growth financing.

7 PARK AVENUE FINANCIAL

CANADIAN GROWTH FINANCING SOLUTIONS




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/growth_financing_cash_flow_problem.html

Don’t Overlook These 5 Leasing Finance Issues Around Lease Documents In Canada

Don’t Forget These Issues When Leasing Assets In Canada !


Information on leasing finance in Canada and the importance of address key issues within lease documents when financing equipment and other assets.




Leasing finance in Canada. Just how important is the issue of ' lease documents ' when it comes to equipment financing in Canada. When you speak to companies who have encountered what we can diplomatically term as ' issues ' in the past with their lease transactions you just might find that a lot of those issues revolve around key terms and obligations in your transaction.

Let's examine 5 of those key points, with a focus on protecting your rights in the transaction with a fair lease transaction - because at the end of the day also those same issues have to be fair and make sense to your lessor.

We would also point out that many of these issues can be negotiated and that’s important for the Canadian business owner and financial manager to know.

First of all it makes great sense to consider signing one master lease with your leasing company of choice. Why ? If only for the issue of saving time and money , as this type of document addresses once and for all , the terms of all future lease transactions . Larger transactions will tend to always have a ' master lease ' scenario in place anyway given the complexity of a larger transaction. It's not all that complicated, but many firms might want to have their lawyer look the document over once, as it identifies the rights an obligations of both parties and describes the financial terms of the deal.

Second issue today ... warranty. Make sure you understand your warranty rights on any asset you purchase. Many Canadian business owners/ managers confuse, mistakenly, the finance firm as their ' vendor ‘. That is not the case... they are financing the transaction for you, not providing a warranty. It gets very complicated, and somewhat ugly, when businesses withhold payment to their lessor for product defect issues.

In Canada there are two types of leases essentially when you enter into a lease contract - a capital lease ( lease to own ) and an operating lease ( lease to use) . Capital leases typically have what is known as a ' hell or high water ' clause in them which basically means that you agree to make your payments, no matter what!

The third issue to watch out for is the issues of liens and registrations against any asset you purchase. This typically is not a problem is your are purchasing from a legitimate vendor , but leasing finance in Canada also means you can finance used equipment - so its critical that you ensure that you and the lease company have clean title to the asset .

Fourth issue today - taxes. Lease payments in Canada will include the provincial and federal portions of tax due on the monthly payment amount. Don't forget to budget these into your cash flows. This issue brings out a positive advantage of leasing finance in that your taxes are in effect financed, unlike a loan type transaction.

Our final issue today is the issue of use and return requirements. Examine carefully your obligations around the type of condition you must return the asset in when your transaction calls for an asset return to the lessor. And make sure the location and costs involved around that make sense to you the lessee. If you are entering into an operating lease and have the right therefore to extend the transaction or purchase the asset it just makes sense to maintain the asset properly.

Bottom line; don’t forget the ' terms ' part of any leasing finance transaction in Canada. Issues not addressed now will be costly and time consuming later.
Speak to a trusted, credible and experienced Canadian business financing advisor on assistance with lease documents and issues that protect your firm and enhance the true value of leasing in Canada.

7 PARK AVENUE FINANCIAL
CANADIAN EQUIPMENT FINANCING EXPERTISE






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_lease_documents.html