YOUR COMPANY IS LOOKING FOR EQUIPMENT FINANCE SOLUTIONS!
EQUIPMENT LEASING FOR ALL TYPES OF EQUIPMENT IN CANADA
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Financing & Cash flow are the biggest issues facing business today
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The equipment finance leasing company solution in Canada. It's probably just us but there is no real ' dark side ' when it comes to using this method of financing assets. So what do you need to know about the ' right ' leasing company, along with other key aspects of lease finance? Let's dig in.
THERE ARE NUMEROUS WAYS TO FINANCE BUSINESS ASSETS
There are of course a couple of methods to utilize when financing business assets. They might include a bank term loan, a bridge loan of a temporary nature, and even a spin on currently owned assets, i.e. the ‘sale leaseback '.
MOST NORTH AMERICAN COMPANIES UTILIZE LEASE FINANCING
Every method works, but there are a number of reasons that top experts tell us that 80% of all North American firms (hey isn’t that Canada also?!) utilize equipment leasing finance.
HOW TO FAST TRACK YOUR LEASE SOLUTION
Can the business owner and financial manager fast track leasing equipment success. We think so, and it comes down to understanding who the players are, what the offering is, and what the upside and downside benefits and risks are.
ARE THERE RISKS TO LEASING ASSETS? ONLY IF YOU ARE MISINFORMED!
Risks? While we can say that the downside risk of lease financing is small, it becomes only apparent due to a lack of misinformation by your firm, the lessee. If you enter into the wrong type of lease (there are only two choices - capital and operating) you run the risk of losing money on the final residual value of the asset. Also, if you weren't ' tending your store ‘properly and didn’t attend to the maintenance and insurance issues that come with any lease obligation that could also pose a problem.
Other risks? Well, they might include improper tax and accounting treatment on your financials, or worse, losing out on the benefits that do in fact come with accounting and taxation issues as they relate to leasing finance. One final point - non-payment results in asset repossession - surely that one was obvious!
So, while some of those above referenced issues could be deemed 'the dark side' the reality is that it should be obvious to Canadian business that a leasing company can provide a strong springboard to business success - i.e. it’s our ‘up and away'!
The bottom line is that business owners can't overlook the many advantages and benefits of equipment finance - whether you are a small startup or a large corporation. The ability to often get 100% financing with small or no down payments has always been an attractive feature, as well as at the same time conserving existing lines of credit. Businesses are always going to need to replenish assets in today's competitive global economy, so whether it's tech finance considerations or upgrading your truck fleet asset financing makes sense.
Remember also that there is an inflationary issue also, as you are able to pay for the cost of the asset over the useful life of the assets in question, either at fixed or variable rates. Your company is literally transferring inflationary risk to the leasing company. Many companies are at the mercy of capital budgets and cash outflow challenges all of which are addressed by the lease solution.
Choosing between a capital lease or operating lease options allows you to manage residual value and end of lease obligations. Don't forget also that many miscellaneous services can be added to the monthly lease, examples being service or maintenance contracts.
KEY ASPECTS TO FINANCING NEW ASSETS VIA A LEASE FINANCE SOLUTION
You need to know how leasing works and that essentially comes down to understanding common lease structures and ensuring they make economical sense to you, in terms of both cash flow and the life and usefulness of the asset. To us, it’s a bit unfortunate that owners/managers continually focus on interest rates only when they are searching for lease solutions, focusing almost always on the ' monthly payments ', which is of course one key factor in the business capital/budget decision. While that is an important part of the equation they forget that the documentation, their obligations, who they are dealing with, and end of term flexibility are key to asset finance success. The interest rate environment is currently very low in Canada and anticipated to stay that way - lease pricing is competitive for companies of all credit quality.
At 7 Park Avenue Financial we encourage companies to utilize their line of credit for day to day funding, not the purchase of long term assets! Firms can choose to utilize a business loan/term loan so it's always good to conduct a proper lease versus buy decision process around acquiring new or used assets for your company.
CONCLUSION 
Leasing companies provide the right financial services for your asset acquisition needs.
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in meeting equipment finance needs via expertise that makes this method of financing a winning solution.
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Stan Prokop
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