Equipment Leasing In Canada : Here’s Why We Like This Business Asset Financing Strategy!

Information on the key benefits of equipment leasing in Canada. The ability to acquire or replace key assets for your business in a cost effective manner is key to long term business success

 Equipment Leasing in Canada has significant advantages over other methods of acquiring business assets. Additionally many of those advantages are real world benefits that position your firm in a very positive manner in many aspects. Let’s look at some of those benefits and advantages. We urge all our clients to speak to a trusted and credible lease financing advisor in order that you can best determine which benefits and advantages make most sense for your firm, as all businesses have different needs depending which industry of course they are in.

One of the main advantages of leasing is the rates and structures that you can obtain if you understand how lease financing works. Lease financing on balance is more expensive than bank financing. However, you rarely can achieve the same structures with a bank type loan. Leases tend to be longer than loan in terms of amortizations, so Canadian business owners and financial manages tend to obtain very favorable monthly payment scenarios which is of course a great working capital and overall cash flow benefit .

Naturally credit lines that you don’t use that the bank can be used for other purposes such as your regular operating facility. During the 2008-2009 worldwide financial debacle it seemed clear to everyone that having access to business credit was so critical, and utilizing lease financing as an alternative method of growing your business assets was a great strategy .

Many lease financings in Canada require a down payment, we would say usually in the 10% range more often than not. But remember of course that if you purchased the equipment out of cash your capital outlay would be very significant. In business it’s all about preservation of capital and access to capital.

Taxes tend to be a complicate subject for non financial business owners. Let’s just say that leasing does have many tax advantages, they can be reviewed in more detail with either your accountant or your leasing advisor. Lease payments are fully deductible.

In finance there is a term called ‘opportunity cost ‘. One great advantage of equipment leasing in Canada is that it can provide you with a number of opportunity cost scenarios. For example, if you utilize lease financing you conserve cash out of your cash on hand or business line of credit. That would allow you to, where applicable, take a prompt payment discount on suppliers who offer terms such as 2% net 10 days. Depending on how many times you utilized that benefit you could save up to 36% a year. That’s a clear advantage and benefit!

Many clients are always focused on keeping their balance sheets intact. Leasing provides several advantages in this area. As an example if you utilize an operating lease strategy (using the asset, but having no intention of owning it) you can actually improve your balance sheet. Also, a true lease to own structure, should you choose that route, balances out on your balance sheet. The equipment is listed equally as an asset and a liability.

In summary, leasing has a lot of clear benefits and advantages for Canadian business owners. Not all of them might be directly applicable to your firm and what you want to achieve through the asset financing, but we are quite sure many of those advantages are applicable to your Canadian business. Why would you buy and pay for a depreciating asset. Profit from a well executed lease financing strategy – talk to a credible experienced advisor today for your equipment financing needs.

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

Direct Line = 416 319 5769

= 905 829 2653

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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 ‘

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

7 Park Avenue Financial
Canadian Business Financing