Transportation And Rolling Stock Financing Explained Stock Financing  And Leasing

OVERVIEW – Information on rolling stock financing in Canada. Leasing new or used heavy trucks is specialized finance. Here’s truck lease principles 101

Rolling stock financing in Canada, in particular heavy trucks, transport, trailers, etc requires a specialized focus and knowledge. How can the business owner/ manager, or truck operator take advantage of the right methods to finance their asset? Let’s dig in.

Knowing the techniques involved in truck finance puts you well ahead of the game. Because of the high ‘ residual value ‘ of these types of vehicles the actual economic useful life as well as the wear and obsolescence issue is key in any truck / rolling stock financing.

While a typical lease term for many assets is 2-3 years most heavy trucks have significantly longer amortizations – in some cases up to 7 years for the right asset. Larger truck and transportation firms might also want to consider ‘ operating leases’ on their vehicles – this allows the business owner/ manager or owner/operator of the vehicle to address capacity issues in their company or business.

Knowledgeable maintenance is a key part of rolling stock/transport financing. Having the ability to provide key data on original purchase amount, mileage, key repairs etc is critical and will allow you to maximize full financing value – especially when it comes to used assets.

For acquisition and future financing of trucks maintenance is absolutely critical. In most cases a lessor or lender will often finance major repairs to the vehicle/ vehicles in question to maintain value. It goes without saying, (but we will say it!) that proper insurance documentation is always required, naming the lessor as a party to the insurance policy.

Licensing and registration must also of course properly be documented re ownership, bills of sale,

The key parts of a truck lease are not really fundamentally that different from any other asset you might wish to finance. Those factors include value of the asset, credit worthiness of the borrower/operator, and, as we stated, the estimated future value of the asset in question.

Market financing rates vary in this asset category. They will depend on the type of firm you are dealing with, their ‘ credit appetite ‘ and your ability to produce a basic loan package application that covers off the fundamentals.

Lessors and other lenders collateralize their financings via a PPSA registration (Personal Property Security Act) and that varies a bit by province. It is simply a central finance filing system used by lenders in Canada, and gives priority to the lender over the asset they are financing, in this case truck / rolling stock, trailers, etc.

Note that in some cases some lessors and lenders actually use GPS devices on their financed trucks to track location, usage, etc

If you’re looking for proper leasing of heavy trucks, trailers, etc seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in your truck lease requirements.

Author: Stan Prokop – 7 Park Avenue Financial :
Stock Financing  And Leasing

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 90 Million $ of financing for Canadian corporations . Info /Contact :



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