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EQUIPMENT FINANCING
LEASING FINANCE LEASE FINANCE COMPANY
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Financing & Cash flow are the biggest issues facing business 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
A hole in your leasing finance sidewalk? It's an interesting play on words around a currently popular book making the rounds. We thought it was a neat analogy for Canadian business owners who want to make the most out of a lease finance company strategy...but instead, keep making the same mistakes when it comes to being successful in equipment financing and dealing with financial leasing companies.
So whether is searching for computer leasing companies, software finance firms, or capital assets such as leasing machinery for your business it's critical to understand your lease finance options and how they work! Leasing business equipment of any type if available in Canada in today's highly competitive lease marketplace.
In essence, their equipment lease strategy becomes a hole in their business, and managing what might seem like a complex process leads to that 'hole in the sidewalk'.
PUT A LEASE STRATEGY IN PLACE
So how does one fix that hole when it comes to business equipment leasing. It's simply by focusing on taking control of your lease strategies and maximizing all the benefits around the financing of the assets in your business. It's kind of about working smarter, not harder.
We of course can forgive the average Canadian business owner and financial manager for thinking that anything to do with a lease finance company might seem complex. Naturally, we all can't be experts in every field, and we met hundreds of firms over the years who utilize a lease finance company for asset acquisition but constantly either make the same mistakes or don’t consider issues they need to think about.
Probably the best advice we give to clients when it comes to the entire process of equipment finance is that they should try and view the whole process as a journey.
What does that journey involve? Well, it becomes a situation wherein you have to pick the right partner firm, evaluate the right type of lease financing for your needs, and then work through credit approval, documentation and final funding.
And just when you think it's over, guess what, it isn't. That's because one of the greatest 'holes in the sidewalk' for Canadian business owners utilizing equipment finance is the whole issue of end of term, i.e. the bank end of your lease transaction.
What then does the Canadian lessee need to consider in a financial leasing decision? He or she clearly wishes they could eliminate some of those financial ' holes '.
To do that you need to either understand yourself or bring in an expert on who are the real players in the Canadian asset leasing marketplace. Leasing assets in Canada is clearly firing on all cylinders these days, and knowing who does deal with is critical.
UNDERSTANDING HOW LESSORS MAKE MONEY - HOW DOES EQUIPMENT LEASING WORK?
You also want to understand how lessors make their money. Of course, there is the implied interest rate in your transaction but issues such as down payment, residual values, etc. play a key role in your overall financial success on the transaction. A financing lease, also called a capital lease, is a debt transaction -
Over time the accountants will depreciate the asset in question and record the interest expenses on the lease. If your firm obtains an operating it will generally stay off the balance sheet, although astute lenders and investors finance will understand that it is still debt!
At 7 Park Avenue Financial, we advise clients to think of operating leases as ' using ' assets while capital lease transactions reflect your desire to own assets at the end of the lease term. The ' end of the lease ' decision is an important one in equipment financing. Careful consideration should be given to the useful economic life of the asset as it relates to growing your business and financing fixed assets.
Is an equipment lease always the best choice? It might not be, especially in certain key areas such as a sale-leaseback transaction, where a term loan might make more sense for a variety of reasons. Certain lease financing companies have the ability to undertake the leaseback of owned assets.
Wasn't there a Beatles song on SGT PEPPER called 'FIXING A HOLE'? Consider doing that, financially speaking, and seek and speak to a trusted, credible and experienced Canadian business financing advisor who can help you meet leasing finance needs with lease companies in Canada.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop 7 Park Avenue Financial/Copyright/2020
