Leasing Equipment Finance Truck IT Technology 7 Park Avenue Financial

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Is There A Difference Between Truck Leasing And ‘IT’ Leasing?  An  Equipment And Technology Finance Surprise?
IT Technolog Leasing And Truck Leasing In Canada !! Is There A Difference ? You Decide


 

YOUR COMPANY IS LOOKING FOR EQUIPMENT FINANCE AND LEASING!

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Financing & Cash flow are the  biggest issues facing business today

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EMAIL - sprokop@7parkavenuefinancial.com

 

 

 

At first brush is the answer ' Are we crazy?'  How could there be any differences between financing a transportation asset or entering into an equipment finance leasing transaction?

 

We actually think you will be surprised at some of the similarities which clearly bring home the point that various asset categories whether it is a truck lease or for a sophisticated computer infrastructure lend themselves to a solid finance vehicle. And excuse the pun on a vehicle!

 

Whether your Canadian firm is a start-up or a ' mature ' firm   (are start-ups immature?) the need to access capital to either enhance the truck fleet or add hardware and software to your computing power remains the same.

 

Both assets using today’s example are depreciating assets -  many will make the case that truck and transport assets depreciate much more slowly than IT type assets, which seems to lose value very quickly if only for the reason that technology seems to change about every  2.5 minutes these days!

 

So does lease finance have an answer to both those asset classes? It does, and it's all about picking one of two leases that fit what the industry calls your ' end of term' strategy. So it might be a more sophisticated operating lease for your computer IT solution, and it might be a long term capital lease  ( a lease to own ) for your truck finance.

 

Naturally, you can buy depreciating assets, no one is forcing you to choose leasing in a ' lease vs. buy ' analysis... but the reality is that unless your cost of capital significantly exceeds a lease total cost that financing is more often than not the right choice. And don't get us started on the very high cost of equity capital which is a whole new kettle of fish.

 

Naturally, it makes sense in any business financing strategy that you feel the cash flow required to pay the lease can be met even when things are tough.

 

Companies use assets to generate value, so whether it's a transport truck asset to deliver your products or perhaps a new IT computer/software system to make your operations more efficient and competitive.... a  lease finance strategy, a proper one, by the way, simply accelerates your ability to fund new assets and the growth of your firm.

 

The proper lease strategy will allow you to both replenish and upgrade assets, or make key decisions around what will happen to the asset at the end of the term. In today’s example for instance we could replace a truck with a new one, keeping our monthly payment the same ... of we could return IT assets to our vendor for an upgrade of newer technology... with... you guessed it, the payment remaining the same.

 

An interesting side point is how valuation decisions are made on assets such as trucks or computers during and at the end of the lease. In the real world (that’s where we work) it comes down to the best inputs you can provide, along with value opinions that might come from an appraiser, your experienced equipment finance company, or research on the internet at best values.

 

Hopefully, we have made our point - whether it’s financing rolling stock type assets where key factors such as physical condition, safety and maintenance come into play... or the other end of the spectrum,  IT type assets that often require large capital outlays around changing technology.

 

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in determining the value of equipment finance, whether it’s your trucks... or computers!


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7 Park Avenue Financial/Copyright/2020/rights reserved
 

' Canadian Business Financing With The Intelligent Use Of Experience '

 STAN PROKOP
7 Park Avenue Financial/Copyright/2024

 

 

 

 

 

Stan Prokop is the founder of 7 Park Avenue Financial and a recognized expert on Canadian Business Financing. Since 2004 Stan has helped hundreds of small, medium and large organizations achieve the financing they need to survive and grow. He has decades of credit and lending experience working for firms such as Hewlett Packard / Cable & Wireless / Ashland Oil