YOUR COMPANY IS LOOKING FOR EQUIPMENT LEASING AND FINANCE SOLUTIONS!
WE'LL MAKE THE LEASING PROCESS EASIER THAN YOU THINK WHEN YOU NEED TO LEASE EQUIPMENT
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CONTACT:
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
Equipment leasing in Canada gives business owners/financial mgrs the ability to ' get strategic' around their asset financing needs. The ability to utilize lease financing strategically allows your business to manage growth related to acquiring the assets you need successfully run and grow your business. Let's dig in.
WHAT IS EQUIPMENT LEASING
Equipment leasing and financing is a method of acquiring assets for your business instead of financing via a loan or outright purchase of an asset. The structure allows the leasing company to purchase the asset and lease or rent it back to the company via lease payments or rental payments. At the end of a true finance lease, ownership of the assets transfers to the lessee.
WHY YOU SHOULD NOT FOCUS JUST ON THE ' INTEREST RATE ' WHEN IT COMES TO ACQUIRING ASSETS FOR YOUR BUSINESS
We're constantly amazed (and it never stops) around clients who only focus on equipment leasing ' interest rates ' as their sole concern when it comes to the equipment lease via an equipment finance solution. While that may be beneficial to lessors who market ' low leasing rates,' the reality is there is a lot more going on it even a very ' standard' lease transaction related to the cost of the equipment and the type of lease you choose.
TOP 10 BENEFITS OF BUSINESS EQUIPMENT LEASING
1. Longer term amortizations equals low monthly payments and cash outflows
2. Less costly than non-bank alternative finance solutions
3. Conserves existing credit facilities
4. No equity dilution in ownership of your firm
5. Conserves working capital for investment in receivables and inventories
6. Flexible payment structuring - example - quarterly payments, seasonal payments tailored to your business
7. Tax advantages around issues such as depreciation / expensing interest
8. Lease payments are not paid out of after-tax profits
9. Allows for upgrading assets
10. Can include other bundled services such as maintenance, servicing, etc
SHOULD YOU CONSIDER A SALE LEASEBACK?
Many businesses will want to consider the potential to enter into a sale-leaseback transaction in Canadian equipment finance - this transfers ownership of the asset to an equipment lessor while allowing your company to use the asset - The lease company maintains ownership for the agreed-upon period of the lease - At the end of the lease agreement term ownership comes back to the lessee.
Your company retains all the benefits of using the asset /equipment and carries no incremental debt on the balance sheet while at the same time replenishing cash on the balance sheet by virtue of the lease back. Cash from leasing back owner assets can be used for any general company purpose vis this type of leasing service.
PAY ATTENTION TO MISCELLANEOUS FEES WHICH CAN DRIVE YOUR LEASE COSTS UP
Even miscellaneous fees from a leasing company that are not part of the ' interest rate' can drive up your total cost. Many businesses miss the ' true cost ' when they don’t factor in down payments, advance payments (i.e. first and last) etc. Having said that, no one disputes the fact that today’s low rates are an attractive part of the asset finance decision.
HERE ARE SOME KEY ISSUES AROUND UNDERSTANDING LEASE FINANCING & YOUR EQUIPMENT LEASING AGREEMENT
Issues you need to look at and understand :
Timing of cash flows - an equipment leasing calculator easily found online can assist your calculations
What happens at the end of the lease (spoiler alert - it can be a surprise!)
Options and the ability to return assets, cancel the lease (you can’t)
Buying out the asset early
Key Point - There are also numerous tax benefits to lease financing that most business owners want to review with their accountant.
80% OF NORTH AMERICAN BUSINESSES UTILIZE LEASE FINANCE SOLUTIONS
Having warned you about some of the important technicalities of leasing in Canada, why do thousands of firms (almost 80% of the business according to lease industry experts ) gravitate to lease finance. As we said, they, in many cases, feel somewhat ' cash strapped when it comes to both running and growing their business. Experts agree that it is highly recommended to match your lease financing with the useful life of the asset - it is therefore never recommended to use a line of credit to purchase long term assets in your business - much fewer technologies that might need constant upgrading.
DO CANADIAN BANKS OFFER LEASING
While most of the major Canadian chartered banks participate in leasing finance in some manner, issues such as tying up your bank credit facilities or meeting stricter bank approval criteria always become daunting issues to consider commercial finance firms who offer or specialize in asset financing. In some cases, that might even mean a business loan via a ' term loan' when a lease might not make sense for a particular reason - for example, a concise term rental. Equipment leasing and rental differ in that rentals are concise term transactions wherein the company never intends to own the asset.
CAN USED ASSETS BE FINANCING UNDER LEASING AGREEMENTS?
Canadian firms should note that used equipment and new equipment can be leased - used assets must be part of a commercial transaction and not a private sale when it comes to financed equipment.
CONSIDER A LEASE VERSUS BUY ANALYSIS IN EQUIPMENT LEASING FINANCE CONSIDERATIONS
We also encourage business owners/mgrs to perform at least a rudimentary, if not full-blown ' lease vs. buy ' analysis to make sure they are, in fact, making the right asset acquisition choice. Quite often, leasing equipment companies ' win' simply because it's associated with ' ease of acquisition' given that your lease company pays the supplier and in many cases can include items such as delivery, install, warranty, add on’s, etc. That a key differentiator in equipment leasing options available to the business owner.
The lease versus a loan conundrum is always a challenge for some business owners. Both solutions obviously aid in cash flow conservation - most companies that acquire assets are often forced to consider upgrades for maintaining their competitive edge in their industry - that's when a lease finance solution tends to make the most sense. The issue of obsolescence in assets such as technology is a key part of a decision to lease - Business loans are structured around amortization and reduction of principal similar to a mortgage
When it comes to conserving cash borrowers should note that the majority of lease finance solutions are positioned as ' no down payment '. Companies with good credit are typically never asked to provide additional collateral on transactions - that might not be the case in a business loan.
LET THE 7 PARK AVENUE FINANCIAL TEAM BE YOUR LEASE EXPERT IN THE LEASING EQUIPMENT BUSINESS
Investing in and expanding your business is a win/win scenario when lease financing is used effectively. Seek out and speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business finance advisor who can ensure your asset finance option is the correct one.
Documentation is key when entering into a lease with leasing companies in Canada. Over the long term, it might make sense to work with on commercial lease company whose terms your firm is familiar and comfortable with.
THE CAPITAL LEASE VERSUS OPERATING LEASE DECISION / CAPITAL LEASES VS. OPERATING LEASES
Many firms, large and small, gravitated toward ' operating leases' versus the traditional ' lease to own’ capital lease in years past. While operating leases have lost some of their lustre due to worldwide accounting rule changes, they still offer a ton of flexibility around lower pricing, shorter terms, and the ability to return the asset or even upgrade it.
The necessity to spend some time thinking about how long your firm will use the asset is critical, affecting monthly payments, lease structure, and cash outflows. Technology leasing lends itself to acquiring tech assets such as computer hardware, software, services, etc.
CONCLUSION- EQUIPMENT LEASING COMPANIES IN CANADA
Equipment leases play a key role in allowing your company to stay competitive with new assets and technology. If your firm is laser-focused on asset finance success solutions for all types of equipment, speak to7 Park Avenue Financial, a trusted, credible, and experienced Canadian Business Financing advisor who can assist you with asset financing solutions and equipment leasing benefits make sense for your company.
Let asset financing solutions for small businesses be your ace in the pocket for business needs and long-term success via equipment leasing companies and leasing lenders. Whether it's leasing machinery/shop floor assets, renting tools, or the latest in technology and software leasing equipment is almost always your best solution.
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