OVERVIEW – Information on business equipment leasing in Canada. The right type of lease financing is all about when.. and with whom
Business equipment leasing can help your business stay competitive. That shouldn’t be a mystery if your company either once in awhile, or constantly needs to replace assets or technology in your business.
As always, it’s a question of the right time and right place. Let’s dig in.
So exactly when should owners and business/financial mgrs consider the lease financing alternative? We’re glad you asked, as we’ve got some basic do’s and don’ts on what works and when, and as importantly, with whom!
Forgive us in advance if you think it’s been overdone or understated, but ensure you haven’t ignored the benefits of equipment finance. Those benefits are often benchmarked when you get into issues such as ‘ pride of ownership ‘, assets that in fact might appreciate, ( not depreciate ) or if your firm is lucky enough to have extra cash all the time.
It’s just that we think we can count on one hand the amount of assets that appreciate over time these days, and items such as computers and software certainly aren’t one of them. Many businesses use ongoing ‘operating lease’ strategies to constantly ‘ refresh ‘ their ‘ tech ‘ needs. Assets such as these are frequently subject to obsolescence, or in some cases are only temporarily required.
So when exactly should the business owner or financial management of a firm consider leasing? Capital intensive businesses rely heavily on lease finance – they don’t want all their cash or credit lines being used for long term asset acquisitions. In many case lease financing is very competitive to term loans when it comes to ‘ rates ‘ – but at the end of the day it’s almost always about capital conservation.
Don’t forget also to ensure you have the right knowledge and advice around accounting and tax benefits and issues as they relate to leasing. The proverbial ‘ lease versus buy ‘ decision can quickly help you identify cash flow and payment issues.
So now that you’ve determined when to lease the question becomes ‘ with whom ‘?! As you consider a lease firm you should, at the same time have a reasonable working knowledge of what type of lease you want. That translates into 3 basic choices in Canada, capital leases (i.e. owning the asset) operating leases, and the leasing back of your assets. Respectively these choices are known as capital leases, operating leases, and a sale leaseback.
Did you know you have 4 different choices when it comes to with whom you should be leasing from?
Your four choices are:
Commercial finance leasing companies that are most often private firms specializing in leased assets.
Choice # 2 bank leasing companies in Canada; these are closely tied to their parent companies, Canadian chartered banks.
Choice 3 is often a fabulous choice, these are the prisoners! Prisoners? Well actually we mean captives, they are finance firms related directly to the manufacturer of the business equipment you wish to lease.
Choice # 4 is often the safest bet. It’s a Canadian business financing advisor who has knowledge and relationships with all of the above firms .These players, with the right credentials and reputation can bring true value and save you thousands of dollars on any single transaction. Look for past experience, credentials, etc.
Knowing why, when and how to lease your asset needs will help put your firm firmly positioned with your competitors, and on the track to financing success.
Knowing when and with whom to finance your assets can put your firm on the track business financing success. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business equipment asset acquisition needs.
Stan Prokop – founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years – Completed in excess of 100 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 & Contact Details :
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Direct Line = 905 302 4171
Office = 905 829 2653
‘ 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.
7 Park Avenue Financial
Canadian Business Financing