Can Leasing Companies Solve All Your Asset Finance Needs ? Making The Right Equipment Financing Choices In Canada

Canadian Equipment Financing


OVERVIEW – Information on leasing companies in Canada . How asset finance solutions for equipment assist Canadian businesses .



Absolutely not. That's the short answer to the question of leasing companies in Canada solving ' all ' your equipment asset finance challenges. But we're pretty sure that 90% of the time they can, and those aren't bad odds, right?

In Canada there are currently hundreds of providers of equipment financing for asset acquisition needs of Canadian business. In a way that’s one of the challenges for the business owner / financial manager - namely who exactly do you turn to? The industry is certainly robust these days with larger corporations, brokerages, and small niche firms providing lease finance solutions from items we could call ' micro ticket ' to multi million dollar acquisitions of technology, airplanes, heavy equipment ... well .. you get the picture!

Many manufactures and distributors have formal or informal relationships with firms that will help you get the financing you need. Major players in a number of industries actually have full blown captive finance firms that are strongly incented and chartered with providing you with flexible financial solutions.

One of the advantages of dealing with a captive finance firm ( i.e. one that is related to the manufacturer ) is that your flexibility typically increases substantially, with various lease schemes ( schemes ?) offering your firm lease to own, lease to use, rental, or short term financing . Typically the shortest lease term in Canada tends to be 24 months, and longest terms are in the 5-7year range. That's of course unless you require a lower monthly payment for your new corporate jet!

If there is one key advantage of equipment asset finance in Canada it’s simply that the emphasis on the ' collateral ' to your transaction is, more often than not, just the equipment you are financing.

One of the alternatives to using leasing companies for financing needs is of course Canadian chartered banks. However here is where credit criteria are somewhat higher when it comes to balance sheets, income statements, and cash flows that meet bank requirements. We don’t mean to infer that the Canadian leasing industry is populated by drunken cowboys!

But we are definitely saying that overall credit flexibility is significantly greater when you use a non bank commercial leasing entity.

Also, most leasing companies will entertain the refinancing of an asset you already own to generate additional cash flow for your firm. This is of course the ' sale leaseback'. After you have reconciled with the fact that you might have to pay the sales tax twice this option still makes a lot of sense.

We encourage business owners to understand the key differences between lease to own and lease to use. That’s the capital lease and operating lease respectively, and there are significant differences to each of those lease solutions.

When cash flow and financial flexibility are important to Canadian business working with the right leasing companies can solve, not all, but a lot of your problems! Speak to a trusted, credible and experienced Canadian business financing advisor for assistance in asset finance 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/leasing_companies_equipment_asset_finance.html

7 PARK AVENUE FINANCIAL
CANADIAN LEASE FINANCE EXPERTISE

Key Issues In Factoring And Receivable Financing . Bringing Clarity To Solutions For Funding Receivables In Canada.

Clearing The Air On Canada’s Most Misunderstood Business Financing Solution



Information on factoring in Canada . How receivable financing differs from a bank borrowing solution and why funding receivables is becoming more of a proven successful strategy for the Canadian business owner




Key differences in banking and receivable financing have the ability to get the Canadian business owner and financial manager confused. Let's try and UN - confuse some of that information to provide some clarity as to why thousands of firms are gravitating to receivable factoring in Canada.

The core differences are in fact quite clear... how they are interpreted and what sort of solution you ultimately choose is where things get exciting! And those key difference - they arent as complex as you might thing. Simply speaking they are that the ability to borrow in this method of Canadian business finance revolves solely around the size and quality and value of your sales. Point number two is that this is not, we repeat ' not debt ' financing - so you are in effect just monetizing assets for cash flow. And that’s a good thing.

And our third difference - simply that the type of facility that you undertake when choose the strategy of finance via funding receivables is critical. That’s because your firm is not a borrower per se, you are a party to a 3 way business transaction involving your firm, your factoring partner and your client.

Quite frankly though it’s our recommendation to leave your client out of it! Is that possible? It absolutely is if you choose a confidential receivable financing facility that allows you to bill and collect your own A/R without notice to any other party - i.e. your client! And this can be easily accomplished if you have the right assistance and guidance from receivables professional.

We always point out to clients that although our focus today is discussing the financing of a business A/R the reality is that this type of facility can be nicely combined into a comprehensive working capital solution that bundles up your receivables, inventory, and even unencumbered equipment into one borrowing facility. That's supercharging your borrowing ability, and often delivers additional financing anywhere from 50 -100%, or more of cash flow power.

The general consensus is that receivable financing is expensive. While some may argue strongly that it is it is important to understand that the way the industry delivers pricing is not in the form of an interest rate per se. It’s in actuality a discounted amount based on receivables covered under the financing arrangement.

What's more important than rate in actuality, we feel is your ability to now borrow as much as you need to based on sales revenue, new contracts, large orders, etc . And if you're on top of your receivables and inventory turns all we are saying is that you're turning over more assets... more often, and that equates to... you guessed it... more profits.

Speak to a trusted, credible and experienced Canadian business financing advisor on what makes sense for your firm when it comes to a receivable financing program that best suits your needs. Finally... clarity!

7 PARK AVENUE FINANCIAL
CANADIAN RECEIVABLE FUNDING 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/factoring_receivable_financing_funding_receivables.html

How To Increase The Odds Of Successful Business Financing In Canada. Funding Your Company With Credit And Loan Solutions

Solving Business Credit Challenges In Canada

Information on business financing in Canada. Funding solutions for loan and asset monetization via commercial credit .


We're sticking our necks out a bit by saying that in general gambling is not a good thing but when it comes to business financing there are a lot of ways the business owner / financial manager can increase the odds

of funding their business with proper business credit and loan solutions.

It's a question of maximizing relationships and knowing at what point in time you need to seek debt or equity options. Most business owners would agree that finding the right solution is hard enough then comes the challenge of ensuring in a step by step basis that you can successfully complete that financing. In Canada some forms of business funding can be completed in hours ( example - leases for assets under 50k) while at the other end of the spectrum larger more complex solutions can take days, weeks, and unfortunately even months . Being unprepared for such timelines as is needed often leads to serious problems.

Knowing what those sources of financing are in Canada is half the battle - there typically is more than you think, and when you are focused on the right solution you have probably already increased your odds.

If we had to summarize in a fairly concise form the major sources of business financing, from a debt and asset monetization point of view (not equity) they would be as follows:

Receivable finance
Inventory Financing
Equipment Financing
Asset based lending
Traditional bank lines
Term Loans
Unsecured cash flow loans / securitization
Supply chain / Purchase order funding
Tax Credit Monetization

How then do you decide what fits when? We won’t weigh into the debate f whether there is too little or too much capital around these days, but we can guarantee the business owner/manager there somewhere out there is a solution that works for them. The business owner often focuses on Canadian chartered banks for many of the solutions we have noted above. We've done that for hundreds of years, so why change things, right?

The reality though is that many non bank commercial entities - i.e. leasing companies, non bank asset based lenders, niche players in PO finance and Tax Credits etc provide billions of dollars of financing and funding solutions for business everyday . How to get those solutions to trickle down into exactly what your business needs is the challenge.

If you feel that your total knowledge of business funding solutions is limited and have a real desire to expand the range of solutions available for your challenges seek out and speak to a trusted , credible and experienced Canadian business financing advisor who can assist you with your commercial credit and loan needs. Doing that increases ... the odds!

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS 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/business_financing_funding_credit_loan.html

Government Business Loans . How The SBL Loan Program Can Help Your Company

What’s The Noise And Commotion Around Government Loans?


OVERVIEW – Information on who can use and apply for government business loans and why the SBL loan program helps thousands of Canadian businesses every year .



Canadian business owners / managers might just get some valuable financing assistance from the 800 lb. gorilla of government business loans - we're referring of course to the SBL loan program in Canada.

When it comes to accessing up to 350k of new capital for your business it pretty well is the only game in town when other forms of traditional financing just seem a bit of a stretch... for the lender. For a qualifying business these loans offer solid rates, terms and structures. The bottom line... affordable and great access to capital!

Most Canadian business arent really aware that the government department known as INDUSTRY CANADA has this loan program in place to help you success in business. And that can be from a start up right up to when you achieve your first 5 Million dollars in revenue. (The 5M is the revenue cap your company or business must be under to qualify for the loan).

Quite frankly the program is one of your best friends for financing items such as equipment, leasehold improvements, computers and application software, and even real estate if that’s applicable.

The first thing you need to understand is that INDUSTRY CANADA itself, the ' sponsor ' of the program does not make the actual loans. They charter our Canadian banks to make these loans, and the government underwrites or guarantees most of the loan. As we have said in the past - ‘Talk about a great co signer ‘! Since the banks are assured of payment they of course become much more flexible when it comes to amortizations of the loan, credit approval, and other ratios such as debt to equity.

Naturally this program is geared to supporting business development in Canada - it's no secret that the majority of growth and employment these days comes from the SME sector... That’s where start ups evolve, business grows into corporations and people get hired. That’s economics 101 we guess.

So what do you have to do to qualify for this the SBL loan program? That's the most often asked question from clients inquiring about government business loans. The basics are a decent personal credit history, a minimum equity down payment of 10 per cent, and the ability to demonstrate your business has the working capital to get out of the start up phase.

The problem arises when the business owner/applicant things the SBL loan program is ' easy ' to get. We're a bit biased - we don’t think it's hard, but you do in fact have to have some fundamentals in place. Oh and by the way, many bankers either aren't familiar with the program, or are incapable of putting together the application, only because of their lack of interest or experience. So, point taken, seek out a banker or, even better, an independent Canadian business financing advisor who can get you fast tracked to financing success.

To recap, over 8000 business every year are approved under the program. All you need is a business plan and some typical back up information that you would have to supply for any type of financing whatsoever. And don't forget, outside collateral is not required- and you'll be more successful if you demonstrate you have the character and experience to make your business successful.

So, what is all the noise about?

It's the fact that financing you need just might be around the corner.





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/government-business-loans-sbl-loan-program.html

Choice In Asset Financing . Know When Leasing Assets Via a Canadian Leasing Company Makes Sense

Canadian Equipment Financing – The Choice


OVERVIEW – Information on leasing assets in Canada. Asset Financing via a business leasing company is the perfect option for the Canadian business owner /manager .


The proverbial fork in the road

when it comes to asset financing is the choice between leasing those assets or a term loan. What then is the value to choosing the alternative of the leasing company in Canada as one of those choices?

One key advantage these days is simply the fact that actual interest rates are quite low, so the Canadian business owner / financial manager can spread the actual monthly payments over a term of 2- 7 years to achieve lower monthly cash outflows - while all the same time receiving the benefits of using those newly acquired assets to generate sales and profits.

While the leasing company in Canada always touts ' 100% financing ' we point out to clients though that typically a first and last month payment is often required, which may also simply be referred to as a down payment of the equivalent amount. Bottom line, with great rates and only a nominal ' down stroke ' it's still a pretty good deal.

Competition reigns supreme for the leasing company in Canada today. While that is not necessarily good for them it’s of course great for the Canadian corporation accessing this type of financing.

In Canada the market is segmented in a couple ways - thee are bank leasing firms, as well as commercial independent non bank firms, and coming up the road quickly are what is known as ' captive ' firms which are related to or owned by the manufacturer of your asset . As a general rule of thumb captive lease asset financing is always very attractive - the captives are incented to approve more product for their owners, and they have various scheme to incent you to acquire that product - financing being one of them!

Clients will often ask us if there is in fact anything wrong with leasing assets or the alternative, purchasing them. While we feel the advantages far outweigh the alternatives to lease finance we do point out some simply basics, one being that leasing is non cancellable so you are in fact committed to the full term of the lease you have signed up for .

Oh , and about that lease - here's where the industry gets very creative in offering a solution that makes sense - either from a lease to own, or a lease to use point of view . We're referring to capital leases and operating leases respectively, and the advantages of each are somewhat different. If we had to summarize the one difference between an operating lease and a capital lease it would be simply that you have more choice at the end of the term of the lease - your firm can purchase the asset, return it, extend the lease at a negotiated amount, or in many cases upgrade the asset and refinance. Technology financing, aka computers and telecom equipment is the best example of utilizing operating lease for the use of the asset, not their incredible ability to depreciate and become outdated! ‘What ... we're not buying computer desk tops anymore?’!


So how do you determine the best choices in dealing with a leasing company in Canada? Simple. Spend some time on the basics or alternatively seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you meet your asset acquisition needs.

7 PARK AVENUE FINANCIAL
CANADIAN ASSET FINANCING & LEASING 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_assets_leasing_company_asset_financing.html

Financing Loans For Your Franchise . ‘ Money Money Everywhere ‘ .. Kind Of . Funding Canadian Franchises

Canadian Franchise Funding Tips


Information on accessing capital for financing loans for the Canadian franchise . Funding franchises is specialized finance!



‘Money ... Money everywhere ...' we hear that all the time , but when it comes to financing loans for franchises all of a sudden why do things seem a bit .. Shall we say ' scarce '?!

Funding franchises becomes of prime importance once the franchisee has selected their business model and franchisor. While there are solid ' text book ' reasons as to why you need a business plan (some might call it a strong executive summary) one of the main ones is it's a key part of your business loan application for a franchise.



We'll focus on a bit more detail as to what’s in those business plans a bit later. Many franchisees (that’s you!) somewhat mistakenly believe that their franchisor, be it Canadian or U.S. has a special program of financing available. We can say this is partially true, because many of the larger more established chains have taken the time to profile their business and business model with various financial institutions, in some cases banks also.

While the franchisor ' program ' we're talking about in the above will help you understand some of the basics you should never assume they guarantee you a financing approval. But we can comfortably say they can reduce some of the ' hassle '.

We also caution clients to spend some time understanding what some of the actual franchisor requirements are when it comes to financing, minimum personal net worth, ownership equity contribution , etc . We've got several ' war stories ' around franchisees not even understanding what their franchisor required, let alone their financing entity!

The actual amount of capital required to purchase your business and ' open the door ' so to speak is where things either fall apart of come together. That’s because an astute and well prepared franchisee will take the proper amount of time to spend on the financials of the business, and that includes areas such as up front franchise fees, equipment, leaseholds, rolling stock, and in some cases even real estate if you have purchased a franchise that has a real estate component to it.

We alluded previously to the business plan as a key part of your journey on funding franchises in Canada. The finance part of that business plan should show an opening balance sheet and realistic cash flows that reflect the start up and growth of the business. Oh, and don't forget that the lender will want to see their loan payment in there also, reflecting their main interest in your business... how they will get paid! Oh and don’t forget there is lots of relatively inexpensive help to get your business plan completed if you’re not the type that dreams about balance sheets , income statements and projections!

If we had to summarize it we could easily say that the key elements of a successful plan for financing loans for a franchise are simply the following:

Your own financial contribution
Your combinations of loans

In Canada you can purchase a franchise and finance it properly with anywhere from a 10-50% equity contribution from yourself. Those funds tend to be permanently required in nature and vary based on the size of the franchise.

In Canada financing loans for franchisees come from either the Govt Small Business Loan program or specialized finance firms that might have a program arrangement with your franchisor / master franchisor. Thousands of entrepreneurs choose the SBL loan as their proven funding vehicle when their requirements are under $ 350,000.00, which is the cap on the program.

So yes, ' money money everywhere '.... if you're well prepared, have a solid loan package that reflects time and realism. For access to actual financing you might choose to seek out and speak to a trusted, credible and experienced business financing professional that has proven expertise in franchise funding.

7 PARK AVENUE FINANCIAL
CANADIAN FRANCHISE FUNDING 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_loans_for_franchise_funding_franchises.html

Business Financing Challenges At The Fiscal Cliff ? Navigating Loan Interest Rates And Finance Capital Solutions

Business Funding .. When You Need It

Information on business financing in Canada . How to assess interest rates on finance capital based on asset and cash flow financing strategies .



It's actually pretty easy today for Canadian busines owners and financial managers to feel that business financing is hardly easy anymore. To put it in the context of recent events in the U.S. the business owners in Canada actually often feel they are at the edge of the ' fiscal cliff '.

And boy does that cliff seem steep sometimes as we see competition in our businesses closing in on us every day. But if your new or emerging competitors are raising financing capital and accessing finance solutions and interest rates commensurate with their credit quality... why can't you?

The answer of course is... you can... if you know how, who to talk to, and are focused on a realistic solution that makes sense for your company.

One of the big mistakes that some business owners / managers make when it comes to financing is that they focus on only one solution ( unfortunately they also might be focusing on the wrong one !) when in fact there are a number of capital and finance solutions that are quite complimentary to each other . As an example we often get calls from existing or potential clients looking for ' inventory financing ‘. While this can in fact be achieved (it’s not easy by the way) the reality is that this type of solution is often best achieved in the context of a ' comprehensive ‘ asset based business line of credit by a non bank finance firm.

We're also assuming that your business is past the ' friends and family' stage which has business entrepreneurs accessing capital via family loans and gifts, credit cards, collapsing of savings, personal lines of credit, etc ... While interest rates on those might be great they typically can only get your business so far - so if you're in it for the long haul, or established already its time to move on - to real business financing!


So... getting ' fully funded ' to operate or grow. What can you as the owner /manager do to achieve that? A good start is understanding the difference between debt and equity. While most people understand that equity means new partners and dilution of ownership they often don't understand that their business is not ready for angel investors and VC’s. So debt financing is the option, but we're talking about debt financing... done right!

Having a solid business plan or executive summary is key to financial funding success. At its most basic it covers off a very simple concept - how you will use the funds and how will financing be paid.

Another key take away for your navigation of debt financing? Simply that a lot of financing solutions bring debt to your balance sheet ; when in many circumstances you can simply monetize assets without bring debt to your financials . Those solutions include:

Non bank lines of credit
Sale Leasebacks
Bridge Loans
Receivable Financing/ Factoring
Tax Credit Monetization
Securitization of A/R portfolios.
Unsecured cash flow loans

Etc! Bottom line - a lot of new capital commensurate with interest rates that makes sense for your firm, and no long term debt on the balance sheet. That's a good thing!

Flexibility is key to proper business financing. Many finance solutions come with higher rates, at least for an interim period. But if they are sustainable and can allow you to take the business to the next level then they just might make a lot of sense. And boy is that better than giving up equity or going down the road of searching for ' investors ' when that solution simply isn’t attainable or doesnt make sense.

Seek out and speak to a trusted credible and experienced Canadian business financing advisor on how you can access finance capital 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/business_financing_interest_rates_finance_capital.html