Guilty As Charged ! It’s OK To Be Accused Of Exploiting Commercial Equipment Lease Companies In Canadian Business Financing

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Information on Canadian Equipment Financing Solutions - Your optimal asset finance solution !

Guilty as charged? You should be. We’re recommending it! We're talking about exploiting commercial equipment lease companies in Canada for your financing needs.

We're told that exploitation is ' utilization, especially for profit'. That’s what we think you should be doing when it comes to considering lease financing in the Canadian marketplace. Let's explain why and how.

Naturally when we talk about ' exploiting ' we think it’s fair to say it has to be to a mutual advantage, i.e. the lessor and you the lessee should be in a win win scenario. It’s all about maximizing the benefits.

To put it simple lease companies solve financial challenges you may be facing in acquiring assets.

We constantly preach that to get into the ' exploitation' mode that we're talking about here you have to know the lay of the land.

Therefore it’s important to understand who the players are in the industry and how they differentiate themselves from each other. That could be a full time job in some cases, and apparently you've got one already! ... so it makes sense you want to attach yourself to a lease financing expert who can clearly differentiate the players with respect to their financial offering , their deal size, credit criteria, and types of equipment lease offered.

So in what ways can you exploit lease financing to your advantage. There are several, and if we had to summarize them they would come under the categories of economics, working capital preservation, balance sheet and income statement benefits, as well as just ease of acquisition.

When it comes to economics its all about cost of ownership, and the lease versus buy decision. You have to do some basic analysis around why you want to lease finance and that often boils down to the actual use of the equipment at the end of the lease, not at the beginning as most think!

We constantly see business owners and financial managers in Canada doing a not too bad job of finalizing a lease transaction at inception, but they often fail to consider mid term and end of term economic implications .

One of the great economics with commercial equipment lease companies in Canadian busines is the sale leaseback - it’s a strategy that replenishes your working capital and maximizes your owned, unencumbered assets.

Issues such as taxes and depreciation often fail to excite the business owner as lessee. And count us in that group also! But we do caution clients to discuss accounting, tax and deprecation benefits around business lease financing and how they might positively impact your financial statements.

If you’re an astute lessee you can save hundreds, and often thousands of dollars based on some simple understanding of lease rates, why they are important and why they might not be.

Clients don't always believe us but a low monthly payment or interest rate doesnt mean anything when it comes to other aspects of your transaction such as down payment, skip payments, end of term obligations, calculation of a buyout, etc.

There's an old joke among lessors who maintain they will give you any interest rate you want as long as you sign ' their ' lease contract!

Exploit commercial equipment lease companies to your advantage. Maximize benefits; minimize the downside by some careful analysis. Not feeling qualified? No problem. Speak to a trusted, credible and experienced Canadian business financing advisor. Let’s get exploiting!





7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.



Stan Prokop

Who’s The Boss? Are Cash Flow Financing Challenges Managing You? Business Working Capital Management

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Information on Solving Cash Flow Financing Challenges in Canadian Business

Valid question, right? When it comes to your business
working capital and cash flow financing who's running the show, you, or are those two culprits seemingly running your company?

We're remind of one of Yogi Berra's (many) great lines - ' when you come to a fork in the road, take it ‘! That's probably where you are now in many cases. Determining who will win the ongoing cash flow battle for supremacy.

The reality is that you can probably be forgiven for feeling ' Who's the boss ' as statistics show that 82% of business owner don't feel in control or comfortable about their cash flows. So how in fact do you regain that feeling of control that every business owner treasures.

A good start is to know what you're talking about. We've repeatedly said that cash flow is such an over used and misunderstood concept or term. We can get really technical (net income plus deprecation plus or minus changes in working capital components) but unless we're at an accounting trade show/convention that's not really what we're looking for here!

To make things more complex we can make a case that your ' cash flow ' has to do with historical, present, and future needs, making it even tougher to get a handle on.

There are some great tools and also solutions to manage your cash flow financing needs. And again, we're talking about real cash, not income statement profits. That frankly though is a good place to make a very important comment - if your cash flow statement ( it's component # 3 of every financial statement ) differs significantly from your income statement over time you probably will never really regain cash flow control/supremacy.

So lets examine some solid ways to make sure you feel good about that ' WHO'S THE BOSS' question we posed earlier.

First of all, keep your financials up to date and understand them. A small handful of key ratios or relationships you can easily, and we mean very easily monitor over time will allow you to feel ' in control ‘. Simple things like receivable days turnover, inventory turns, sales to fixed assets, etc.

It sure doesn’t hurt to do some methodical cash flow planning. Also, take a look at your overall capital structure from a viewpoint of debt and equity. This allows you to properly take advantage of market growth opportunities, even an acquisition perhaps.

We know we sound like a broken record sometimes, but understand your operating cycle; it’s the amount of time it takes for a dollar to flow thru your company. Match a financing solution to that selling cycle.

Hottest tip today on cash flow generation? It's dont pay anyone! But seriously, managing your payables and disbursements is critical, but we're the first to recognize the importance of supplier relationships. If you have a sales force you might consider paying them commissions when sales are paid, not made. Talk about incenting the collection focus!

If your assets aren’t turning over quickly focus on that. You can also monetize your current assets via

bank lines, asset based lines of credit, working capital lines, receivable financing, inventory financing, and supply chain finance .

Who's the Boss when it comes to cash flow? Hopefully you. Speak to a trusted, credible and experienced Canadian business financing advisor on cash flow financing and business working capital analytics and solutions.






7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.



Stan Prokop

8 Reasons To Consider Canadian Receivables Finance

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INFORMATION ON RECEIVABLES FINANCE IN CANADA

Receivables Finance! said the client. ‘Give me one good reason why .... ' We hear that one a lot , so we'll do one better and provide him, or her with 8 solid business reasons to consider an account receivable service for your
cash flow financing needs .

Reason # 1 is simply growth... one of the ultimate ironies we have found in business financing is that many clients are punished for growing. Generally of course that's growing too fast and traditional banking in Canada somewhat dislikes high growth.

But tell that to the entrepreneur who has been building his or her company, or working forever on that major contract or sale. We have said it before and we'll say it again, a surefire method to generate positive cash flow immediately is to slow down sales and accelerate collections. You'll be flush with cash, but guess what, you won’t be growing and that’s the dream of most entrepreneurs and business owners.

A/R finance likes, no, scratch that, loves! growth. In fact under most facilities you will enter into for this method of Canadian business financing you are automatically approved for whatever level of financing you need, as long as you have the sales and resultant receivables to back up your request.

Reason # 2- the ability to purchase smarter and harder. With the cash on hand from your instant a/r collections via receivables finance you are in a position to negotiate better pricing with key suppliers, giving them at the same time the assurance you will pay .

Reason # 3 - This is a powerful but often overlooked one. It's simply your new found ability to take prompt payment discounting, typically 2%, off major purchases. That reduces the cost of an accounts receivable service significantly.

Reason # 4- Timing and speed. A solid A/R facility financing can usually be put in place within a week or two. Compare that to the time it takes to set up a bank facility with all the requirements imposed by Chartered banks in Canada, which by the way also include profitability, personal guarantees, potential outside collateral, etc .

Reason # 5 - This one is a bit tricky. Under traditional A/R finance in Canada utilizing the popular U.S. model the finance firm takes over all your collections, after all they have purchased the receivable. That reduces collections costs and focus by the Canadian business owner.

That’s all good, but we'll point out that our favorite and in fact recommended facility is a confidential invoice financing, wherein you bill and collect your own receivables and sales. So in this case opting for our recommended solution would in fact not save you the burden of collections and customer interfacing.

Reason # 6 - You're in control. In Canadian A/R finance you are under no obligation to finance all your A/R, so you only pay for financing you use, when you need it. That’s flexibility. Many bank facilities have standby and usages fees that kick in when the facility is not used. That’s not the case with Canadian accounts receivable service finance.

Reason # 7 - Customers who have liabilities with Canada Revenue for source deductions, H.S.T. etc and in fact use their a/r advances to clear up these federal and onerous obligations . That's a good thing, as the tax man should be on your side, not at the door!

Finally, reason # 8. It's basically the concept of the bridge. View receivables finance as your temporary bridge to a more traditional financing. A properly constructed facility should have little or no contractual obligations, allowing you to move on to another method of financing that might come with a lower cost.

There are numerous other reasons to consider A/R finance as a business financing strategy for Canadian business owners and financial managers... We have touched on some of the key ones, but further investigation by you will no doubt lead to other potential benefits.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in implementing a facility that makes sense for your firm.


7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Golden Rules For Financing A Business In Canada . Working Capital and Debt Solutions .. That Make Sense !

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Information on financing a business in Canada

Financing a business in Canada. A challenge? Let's just say that's an understatement when it comes to working capital, debt, and ongoing management and recognition of finance problems and opportunities.

Are there some ' Golden Rules' we could follow. We think so.

One of the golden rules of business finance is to ensure that you properly match short term debt and long term debt appropriately. Each of these two has its own benefits and potential disadvantages. Is one better than the other? Not really, it’s just that it’s a case of making adjustments and staying ' in tune ' with what needs are appropriate or required at the right time.

It certainly hasn’t escaped us that not only is it difficult when it comes to financing a business in Canada to manage internally, you of course have to stay in tune with what’s happening in the economy, your industry, and dare we say, politics! Talk about a full time job.

A lot of your financing will probably come from external financial solutions. They might include bank debt, working capital term loans, receivable finance, inventory finance, equipment leasing, and monetization of tax credits. However, you also generate cash internally, and you need to know how to measure that.

When you assess working capital or debt needs you need to be in a position to focus on cost, risk, and what that financing does to your balance sheet? All of those must be taken into consideration.

Also consider your current capital and debt structure and how your balance sheet will look after financing is completed. As an example, something to think about is that working capital and cash flow can be generated through monetization of assets - this doesnt really bring debt to the balance sheet, so you've achieved your goal without increasing debt.

On occasion it’s important to discuss any taxation impact on your financials with your accountant, as there are both positive and negative aspects to debt and tax.

If your firm is mature and operating efficiently you’re in a position to access all sorts of traditional financing. The other side of that is alternative finance, which works just as well but might be more costly on occasion - not always, but sometimes.

It's hard enough to access financing but choosing the right partner is a struggle in itself sometimes, ensuring that the funding source will be with you in tight markets and good times. Apparently those two fluctuate over time. The 2008 worldwide debacle caused many finance firms to disappear or implode, causing havoc among thousands of businesses in Canada, whether you were a start up or large corporation!

One solid GOLDEN RULE of business finance is to be proactive when it comes to access debt solutions and working capital. You might even have to make the tough decision around diluting equity when there it too much debt on your balance sheet. That’s a costly one.

A great GOLDEN RULE is to have a solid sense or understanding of how outside forces can affect your company's financial viability. If market conditions are continually volatile you clearly need to focus on longer term stable financial solutions.

Constantly stay on top of your cash flow planning , and if you want to understand what solutions are available for financing a business in Canada speak to a trusted, credible and experienced Canadian business financing advisor .


7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.



Stan Prokop

The Key To Working Capital Financing - Asset Based Lenders

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Wondering how your competition seems to have all the working capital financing they need and you don't - the key to that answer might just be asset based lenders and the asset based lines of credit they offer to Canadian businesses such as yours.

Let's examine how this relatively new and unique method of business financing can totally alter your business financing success.

The acronym for this type of financing is A B L; simply speaking its daily cash flow provide against your current, and sometimes now so current assets. What do we mean by that? Simply that this facility allows you to margin your receivables, inventory, and in most cases, should you choose, fixed assets and real estate. You are probably saying to yourself that you could arrange financing on your own re those fixed assets and real estate - but we are talking about using those assets as collateral for your daily revolving line of credit. So you aren't borrowing, you are not bringing debt on to your balance sheet, you are just leveraging your ' assets ' (that's the 'A' in ABL!) for daily cash flow and working capital.

And why are we claiming that this type of working capital financing just might be your key to business success. Simply because you have probably found it has been challenging to get the full amount of business credit you need. In some cases you might have discovered its been a challenge to get business lines of credit of any manner.

So if your competitors are using this type of financing today, who exactly is eligible for it, and is your firm a candidate. The answer is simply that if your firm has a combination of 250k in working capital assets you are immediately eligible for asset based lines of credit. We would add that firms with smaller asset sizes can still monetize those receivables via invoice financing or discounting, but that's not our key focus for today's information exchange.

So now you now the offering are out there. But why should you consider it. Simply because your firm might be in one of a number of special situations - that includes issues such as your need for increased daily operating cash, you wish to merge with or finance an acquisition, you have been unable to obtain inventory financing elsewhere, you are growing to quickly for traditional Canadian chartered banking financing, etc! We are pretty sure you get the picture now!

The benefits to this type of business financing must by now be pretty obvious. It's all about access to working capital financing and cash flow that you couldn't access before. Assets that couldn't be financed are now financeable, and inventory financing, previously limited or unavailable now looms on your growth horizon.

Who are these asset based lenders, and what is the cost of this financing? We'll leave that one for another day, but if you want to investigate asset based lines of credit for your firm ( remember, your competitor probably already has ) then speak to a trusted, credible, and experienced Canadian business financing advisor who will assist you with identifying benefits and the best solution for your current strained needs in business finance.




7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.



Stan Prokop



Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698


Article Source: http://EzineArticles.com/5895090

ABL Asset Based Finance - Recognize These Early Warning Signs For Your Need for The New Paradigm In Revolving Lines Of Credit

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Information on Asset Based Lending In Canada - The Alternative Business Line Of Credit Solution

ABL asset based finance can be the solution for business revolving lines of credit when your current finance strategy isn't working. And what are those early warning signs? They include situations where your financing currently just isn’t working due to financial challenges you have experienced in the past. They also include acquisition scenarios, turnarounds, and the proverbial double edged sword, high growth.

The simple reality is that although the ABL credit lines have essentially the same goal they in fact get to that goal line in a very different manner. Both the chartered bank facility as well as the ABL line provide you with a bridge for financing from the time you receive customer payments while all the while generating expenses.

Receivables are often the primary component of an ABL strategy. The ABL facility is not capped, so as your sales grow so can the facility, it’s as simple as that. All of this might seem similar to a bank solution, so whets the real difference. One is in fact margining, in that asset based lines of credit, with respect to the a/r component, are usually margined at 90% - typically the bank is at 75%. Although the reporting is generally stricter with ABL the reality is that the tradeoff is significant, you can borrow more and are not focused on staying within any pre set credit limit.

Many clients we talk to don't understand the daily mechanics of how the asset based lender operates given they are not a bank. (The ABL is generally not a bank, but it actually can be sometimes). The typical way this is handled is via a separate blocked account where all the deposits you receive are handled separately from your operating account. Simply speaking you get money from the ABL via your operating account, and your receipts go into the other account. Naturally both accounts are fluctuating all the time.

While some of these terms and the actual ABL facility itself might seem ' new ' the reality is that this type of financing has been happening for decades in the U.S. and is enjoying more popularity everyday. In effect it has become ' mainstream'.

While we have focused on receivables as one component of the ABL strategy the other parts are inventory, equipment, and even real estate. All of these are neatly combined into one revolving facility, enhancing your overall borrowing power. The fact that they are margined at much higher rates than a chartered bank facility simply becomes a ' win ' for your firm.

While banks focus on profits and cash flow, which sometimes are difficult to achieve! the ABL asset based finance revolving lines of credit focus on Assets! Therefore typical bank requirements such as debt to equity, tangible net worth, cash flow coverage, etc simply don’t apply in ABL finance.

ABL can cost more (it can also cost less by the way), and as we noted it require more reporting to your ABL partner. However, if it can provide solutions to growth, turnaround, acquisition, and survival we think it certainly merits your investigation. Often times the higher price of the facility can easily be offset by proper usage of funds to generate profits and savings.

Speak to a trusted, credible and experienced Canadian business financing advisor if you with to look at the new paradigm in business lines of credit.






7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.



Stan Prokop

Is Your Company Properly Exploiting Equipment Lease Financing In Canada ?

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We previously wrote on some of the challenges that Canadian business owners and financial managers face in getting successful lease equipment financing in place for their assets and capital expenditures. The current difficult economic environment makes it more challenging than every for Canadian business owners to get the proper rate, terms, and structure that they deserve.
Success lease equipment financing requires a working knowledge of what the lessor is looking for in a transaction.


Owners can safely assume that the lender is doing significant work on financial statement analysis to satisfy them they are making a proper financing decision with you firm. Included in this analysis is strong emphasis on cash flow history and projections, operating efficiencies of your firm as measure by industry accepted ratios, and balance sheet analysis with respect to the amount of debt your firm is carrying, etc.


In our previous article we suggested that business owners should be aware of some key 'structuring options 'that lenders use when they are contemplating an approval that they are not 100% comfortable with. These options, previously discussed were:


- Utilizing higher rates to compensate for risk
- Use of Security Deposits
- Use of advance payments
- Structuring higher payments in the earlier years of the lease
- Shortening the lease term to offset long term risk


Business owners should be aware of some additional enhancements that can further a financing approval when your firm might not fully qualify for your desired amount of financing and overall structure.
Let's looks at some of those additional enhancements that compliment the 5 areas we have noted above.


Business owners who are not familiar with some of these financial nuances should employ the use of a trusted leasing advisor with credible experience, thereby significantly increasing their chances of getting a lease financing approved.
Business owners might not always be comfortable with providing a Personal Guarantee on the transaction; however personal guarantees are a clear fact of life in the Canadian business financing environment. The logic of the lender, in this case your equipment lessor, is that you are more motivated to make those payments if you are personally obligated in the matter also.

Naturally companies incorporate to avoid personal liability but business owners are often called upon by lenders, lessor, etc to provide a guarantee. It goes without saying that the lender will also want to validate the quality of your personal guarantee.
In many cases you as a borrower, or the lender might request, additional collateral on the transaction.

This would be collateral that is currently unencumbered, but in effect shores up the lessors overall position, allowing your transaction to be approved. In many cases you will be required to provide some form of documentation (usually an appraisal) of the additional asst.


In some circumstances an effective additional collateral might be credit life insurance on the transaction - in a smaller of mediums sized Canadian firm the lender / lessor may rely on that insurance in the event something happens to the owner, that something being ' death ' of course!


Not all Canadian business owners know that in some cases the manufacturer that you may be purchasing and financing the equipment through is in some cases agreeable to providing a limited or partial guarantee on your transaction. They are making a sale, generate profits from the sale to your firm, and may be able to remarket the asset if the lessor requests assistance in this area.


Finally, in some cases your lessor may request a letter of credit or Certificate of Cash deposit as additional collateral. In the authors experience this is rare, as your firm traditionally would note want to encumber cash in such a manner.
So what's our bottom line? It is simply that lease financing can be a challenge, but if you work with a lessor to offer up and co operate on some manner of structuring, as outlined above, then your chances of successfully getting a lease financing approval increase immensely!








7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.



Stan Prokop