YOUR COMPANY IS LOOKING FOR EQUIPMENT FINANCING!
Equipment Leasing & Equipment Loan Solutions In Canada
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing businesses today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs
EMAIL - sprokop@7parkavenuefinancial.com
IT IS NOT ALWAYS ABOUT THE INTEREST RATE!
What is my rate?' is a question I often ask customers when they work with us for equipment financing lease solutions. They are surprised when I tell them that they get to pick their rate! (All customers want the lowest rate!)
NEED HELP IN NAVIGATING EQUIPMENT LOANS AND LEASES? PROS AND CONS?
At 7 Park Avenue Financial, we are not trying to be facetious when making that statement about equipment leases. What we are saying is that the overall credit quality of a customer, as perceived by the lender ( that's important!) is set by the customer, thereby driving a final approval on rate, term and structure of the proposed financing request for a lease or an equipment finance business loan.
The role of the customer or their trusted advisor is to understand the basic credit information requirements and how the lender/leasing company will perceive the overall risk to the customer and their industry. The irony of a lot of business leasing is that the industry, for the most part, used historical analysis to project future ability to pay for assets that will be used for an extended period of time.
That is a difficult concept for the customer to handle more often than not - as an example, the customer may have lost some money last year, driving a negative cash flow figure. Prospects have improved, new orders are coming in, and yet the business has a problem getting new financing for purchasing equipment or technology to run your business.
In some cases, an operating lease rental agreement might facilitate your computer/tech needs, given the high purchase price of updating technology you need to run your business. The lease payment on an operating lease will always be lower, and you have the option to purchase assets at the end of the lease term for an agreed-upon fair market value or a predetermined amount.
Outdated equipment holds your company back and decreases competitiveness.
However, most equipment purchase finance transactions in Canada are done via a fixed term finance lease - aka capital lease to own. Maintaining equipment you own is therefore essential. Buying equipment under capital leases is utilized by over 80% of North American businesses to avoid upfront costs and maximize the leasing options available.
When you pay interest on a lease transaction, you enjoy the tax incentives that come with financing assets and tax-deductible strategies. Talk to your accountant or tax advisor on maximizing the flexible terms that come with the asset finance solution. It's always essential to understand the period of time you wish to keep and use an asset.
Leasing finance makes a strong case for the solution of expensive equipment needed to run a growing business and stay competitive in today's pretty well global economy! An overall acceptable monthly payment will allow you to budget how much money you can allocate to new assets.
The company, therefore, can significantly benefit from new assets and wants to purchase the equipment or finance it, i.e. the proverbial lease versus buy question that arises around lease payments in the capital budget process of any firm, formal or otherwise! Any piece of equipment that can help the company drive sales and profits is key to long-term success for your company.
The customer needs to ensure that the information and ' story ' make the transaction more ' approvable.'
INFORMATION REQUIRED FOR EQUIPMENT LEASE APPROVAL
Critical categories in the information submitted by the company are as follows:
Length of time in business
Personal credit report history of the owners
Relationships with other financial institutions
Quality of the financials (Some customers submit balance sheets that don't balance!)
Additional collateral available/down payment if necessary
Summary of critical financial info such as depreciation, cash flows
A business plan might be recommended for massive purchases with a positive focus on management and its background and experience.
If the customer is qualified to make such a submission, a solid package as per our list noted above should lend itself towards approval at current market rates and structures. Interest rates in lease financing are very competitive in today's borrowing environment.
Suppose the customer feels they are not adequately qualified to make such a submission. In that case, they are strongly encouraged to use a qualified intermediary who knows the industry and, more importantly, knows the specific weighting given by a lender to the above-noted submission requirements.
Issues such as lease term and end of the lease options are often not considered or even forgotten by some lessees. That type of planning also affects monthly payments as the asset's future value must be taken into consideration. A lease agreement monthly payment is a business expense as far as accounting treatment goes for your operating expenses. Also, new and used equipment can be financed, as long as the used equipment is part of an arms-length commercial transaction. More often than not, the 'more unique model ' makes a lot of sense.
THE DOLLAR VALUE OF THE LEASE DETERMINES LEASE APPLICATION APPROVAL TIMES
The amount of information required around each component is more often than not determined by the size of the transaction or the lender's total exposure to that customer. In many cases, small ticket equipment leasing transactions (those under $ 25,000.00) are adjudicated via a credit application and public reporting sources such as Equifax or Dun and Bradstreet. Typically 60-70% of all small-ticket transactions are approved.
CONCLUSION
In summary, as a business owner in the small business segment, as well as if you're a larger corporation that wants to get a prompt and, of course, positive equipment leasing approval, you should focus on providing a neat package of required information that will ensure a fast approval based on specific industry requirements around the transaction size and asset type. The cost to purchase and pay cash for equipment outright is an expensive proposition.
When considering leasing equipment, business owners should recognize that both new equipment and even used equipment, any equipment - even software, can be financed - Knowing that the lender will focus on the future potential of the firm, the management experience. The collateral asset is a valuable data point for any business seeking a business equipment financing lease.
The cost of the equipment or technology will usually dictate whether financing is the better option in most cases, for more information on whether financing makes the most sense talk to the 7 Park Avenue Financial team.
Call 7 Park Avenue Financial; a trusted, credible and experienced Canadian business financing advisor who can assist you with your asset financing needs.
FAQ: FREQUENTLY ASKED QUESTIONS
What is an equipment finance lease?
Equipment leasing is a smart way to finance your business needs. It can help you avoid the risk of owning expensive equipment while providing flexibility with payments - Often there's no down payment required!
Equipment Leasing may be just what you need for any size enterprise - from small mom & pop shops all the way up through multinational corporations who require specialized machinery or vehicles as part of their daily operations
Equipment leasing is a popular way to finance expensive equipment such as machinery and vehicles. Businesses also have access to more options when it comes time for their next capital expenditure because lease agreements typically offer lower rates than a long-term business loan.
Click here for the business finance track record of 7 Park Avenue Financial
