YOUR COMPANY IS LOOKING FOR USED EQUIPMENT ASSET FINANCING !
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New And Used Equipment Financing
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
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EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Yes you can. Simple as that. Unknown to many business owners and financial managers is the fact that many assets they choose to purchase can in fact be financed if they are ' used’. Used equipment leasing works. Equipment Financing and loans for assets don't pertain to just ' new ' assets.
Safe to say there are some issues in financing and leasing, which we will cover off, but the reality is, whether its bridge loans solutions, or financing under the general category of equipment lease this method of funding assets works for Canadian business.
Part of the challenge of the finance of a used asset is simply that some firms actually thrive on and understand the functions of this type of deal, and some, by policy or otherwise (inexperience, etc) do not.
YOUR BUSINESS CREDIT PROFILE WILL DETERMINE LEASE APPROVAL AND THE FINAL STRUCTURE AND RATE
Part of the issue revolves around whether the financing is approved on the basis of your overall financial condition, or if in fact, that plays a secondary role to the actual value of the asset. We suppose if you are a lender the best of each world would apply, but it doesn’t always work out like that!
RATES AND STRUCTURE MAY BE ALTERED WHEN USED EQUIPMENT IS FINANCED
In some cases, the actual rate and structure of your transaction might look a little different if you are financing a used asset. That might mean, for example, a shorter lease term, a down payment, or a higher interest rate, all of which might reflect your lessor or lenders' overall view of the transaction. The end of the lease decision is also an important one.
Using technology as an example it is very achievable to do a sale-leaseback on your tech and computer assets. However, safe to say that market values will no doubt reflect a shorter term in your lease or loan.
USED EQUIPMENT ASSETS AND THEIR VALUE ARE ON THE INTERNET
In recent years an interesting phenomenon has taken place in Canada, as various traditional auction and appraisal firms got into the finance business. Why? Simply because they are very able to recognize the true value of a marketable asset, including finding the right end-user if things go wrong. Also, the emergence of the internet allows many finance firms to continually test the value of certain assets they finance in their portfolios. That’s a good thing. At least for them.
THE APPRAISAL ISSUE
In financing used equipment under leases or loans, you should well expect to have an asset appraised in some manner. It might be a simple ' desk appraisal ' - that being done by your finance or lease company at their premises via research. In certain other instances fully expect to bear the cost of a third party independent appraisal to validate the condition and market value of the asset.
OUT OF COUNTRY ASSETS CAN BE FINANCED WITH THE RIGHT LEASING COMPANY
One challenge that sometimes arises in used equipment financing is that you have either sourced the asset in a different country (certainly quite common in the Canada / U.S. scenario), and perhaps further complicated by the fact that it’s a private sale. By that is meant that you are buying it from another firm or actual user, not a dealer, distributor, retailer, etc. If clear title can be proven you should be in a good position to still obtain the financing you need for the asset, but a caution that it’s certainly not a guarantee.
Clearly you can protect yourself in a number of ways, including actually visiting and inspecting the asset, insuring it, providing only a down payment, or insisting on some sort of final acceptance criteria.
WHAT TYPE OF LEASE WILL YOU COMPANY USE - CAPITAL OR OPERATING LEASES ARE DIFFERENT
You also will want to enter into either a capital lease or an operating lease that adequately reflects the remaining useful life of the asset when you consider such financial services such as lease finance.
CONCLUSION
Our bottom line? Simply that financing equipment assets of any type of equipment, new or used, can be financed under the right circumstances. That can be medical equipment, construction equipment, even technological assets. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your used asset finance needs.
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Stan Prokop
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