YOUR COMPANY IS LOOKING TO LEASE EQUIPMENT – MAKE SURE YOU
USE THE RIGHT LEASING COMPANY!
Equipment Financing In Canada
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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?
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EMAIL - sprokop@7parkavenuefinancial.com
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
The ' lease equipment ' decision can be a complex and/or confusing one when the Canadian business owner or financial manager is ready to choose the right leasing company for the firm's asset financing needs. Who should you deal with? What are the differences between lessors? What mistakes can be made... and how can you take advantage of the right benefits of an equipment lease when financing assets ? Whew... a lot of questions! Let's provide some solid answers to the lease finance conundrum!
Equipment Leasing Companies In Canada
There are numerous financiers of equipment assets in Canada. While some might be ' pure-play ' equipment lessors others might be a hybrid, offering loans, bridge loans, etc. Choosing who to use, as we have pointed out carries rewards... and some risk.
The 3 MAIN TYPES OF EQUIPMENT LEASING COMPANIES IN CANADA
At the end of the day, there are 3 real, as we call them ' pure-play ' lease type firms in Canada. They are :
1. Independent commercial financing companies,
2. Captive finance firms (more about those later),
3. Bank subsidiaries and divisions of our Canadian chartered banks.
THE HYBRID PROVIDER?
There is also what we can call a ' hybrid ' provider that might just possibly be your best solution, an independent Canadian business financing advisor who has strong relations with all of the above. At the end of the day, a little help from an expert in equipment financing never hurts.
When you at least know the different categories of lessors out there it certainly helps to level the playing field!
We would venture to say that independent commercial equipment leasing companies in Canada provide the bulk of asset financing to the industry. It's their only job, and they do it well. They aggressively market asset financing to Canadian business and are in a position to use credit and asset expertise to deliver solid fixed asset financing solutions to your firm. The industry, as we have noted in the past is diverse even on its own - there are micro, small, mid and large ticket lessors, and all of them have different ranges of pricing and credit criteria. Typically commercial independent lease firms offer two types of leases, lease to own ' capital ' leases, and lease to use ' operating’, or ' rental ' leases.
Whether it is a business loan or a lease the interest rate will always be a consideration in acquiring assets - Top industry experts tell us that over 80% of all North American companies utilize lease finance at some point .
Knowing which type of lease you need helps you narrow who to deal with. Issues such as the end of the lease term are critical and often not considered by the business owner , much to their later chagrin .Independent lease firms pay your vendor on your behalf and enter into a lease contract with your company. Title remains with the equipment leasing firm until you typically have paid all the monthly rentals. These firms make their profit from the finance charge, and on occasion from the residual value of the equipment if you are obligated to return it.
Captive lease firms are typically associated with a specific manufacturer. They are the ' in house ' arms of large computer and auto and construction equipment firms as an example. They are usually great to deal with because, no surprise here, they are incented to finance the product their parent company sells your firm. Credit is sometimes more flexible and in many cases return and upgrade options are plentiful.
Many of Canada's chartered banks have re-entered the equipment leasing market. While credit criteria and standards are very high it’s no surprise that rates and terms are great. Typically banks will only do lease to own type transactions. Don't expect your bank to offer a computer upgrade option on your technology financing needs when it comes to their offering on equipment leases!
CONCLUSION
Using an experienced Canadian business financing advisor for your small business equipment leasing needs might often be the perfect solution to size up the entire market at once - with no financial or time investment by yourself. It's a great way to grow your business and conserve cash flow. The cost of the equipment you are financing is always a key consideration for business owners and financial managers. And by the way, any type of equipment can be financed, new equipment or used! Used assets must be purchased fron non private sellers - i.e. it must be a commercial B2B transaction.
Talk about a win / win! Working with a trusted, credible and experienced Canadian leasing advisor can add value, reduce pricing, and enhance terms and benefits to your lease equipment needs when you need a leasing company in Canada.
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Stan Prokop
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