YOUR COMPANY IS LOOKING FOR EQUIPMENT FINANCING!
Simple, Easy & Basic Equipment Finance Strategies For Business Needs
You've arrived at the right address! Welcome to 7 Park Avenue Financial
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
7 Park AvenueFinancial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Dealing with leasing companies in Canada for your key asset finance needs. Want to maximize your return on this popular method of asset finance in the Canadian marketplace. Or perhaps you simply want to find a leasing company you can comfortably work with on a long term basis for your commercial equipment needs - and that even includes technology, software, etc.
Both new equipment and used assets can be financed through lease finance companies. ( Used assets must be part of a standard commercial B2B transaction). Industry leaders in every sector of the Canadian economy, companies small and large, utilize this method of acquiring assets.
Previously here at 7 Park Avenue Financial we offered up 5 points on maximizing lease financing for your company. Those points/tips revolved around:
5 WAYS TO MAXIMIZE ASSET FINANCING NEEDS
1.What can be financed?
2.Lease interest rates
3.Payments to your vendor/mfr for the asset
4.Delivery and Acceptance
5. Asset location
As the announcer on TV says ' But wait ... there's more! And if you act now we'll throw in ...'
7 ASPECTS YOU NEED TO KNOW WHEN DEALING WITH A LEASING COMPANY
Anyway, here are 7 other aspects to consider when utilizing an equipment leasing company for your financing needs.
WHAT TYPE OF EQUIPMENT LEASES ARE YOU LOOKING FOR - CAPITAL OR OPERATING LEASE
First of all, focus on, or brush up on what type of lease you actually are looking for. Capital leases, i.e. lease to own, and Operating leases, i.e. lease to use are in fact that two main choices offered up to Canadian business owners. Each has its nuances relative to purchase price when it comes to monthly payment calculations, implied interest rate, and how they affect your balance sheet and tax situation. Interest rates on a finance lease are very straightforward as to your monthly payment calculation - operating leases require some interpretation of the residual value of the asset at lease term. Tax incentives and accounting issues should always be discussed with your accountant.
LEASE TERM IS IMPORTANT
Secondly - determine what the term of the lease is that you require. The term or amortization affects pricing of course, but other factors such as useful economic life and options at the end of your lease available to you are also critical.
PAYMENTS AND LEASE STRUCTURES
Thirdly, believe it or not, you have more flexibility around the timing of your monthly payments. Aside from monthly you also have the option of requesting quarter or even semi-annual type payment structures. In certain cases, if the asset isn’t going to be fully functional you might want to ask for a short ' interest only ' payment scenario as the asset gets up to full production speed.
END OF TERM IS IMPORTANT
Fourth - this one is important to the business owner - It's your end of term options. They might include negotiating to buy the asset at the end of term, upgrading it, returning it, or simply extending the lease for a few more months based on the particular use of the asset.
DONT FORGET THOSE ADMINISTRATIVE ISSUES - THEY CAN MAKE A DIFFERENCE
Our fifth point? Well, it might seem a little bit mundane, but it's about knowing how to address basics, lets call them documentation or paperwork issues around maintenance of the asset, servicing it, ensuring the asset is properly insured in your name and the name of your lessor, etc. And can it get any more boring than taxes? In general, you will pay the taxes as a combined amount on your monthly payment, i.e. it will be included. By the way, when you create a loan transaction, as opposed to a lease those taxes can't be financed, so that’s one of the flexibilities of leasing equipment.
SMALL MISCELLANEOUS FEES CAN ADD UP
Point # 6 today? It's ensuring that any smaller transaction expenses, which can add up, by the way, are identified in your lease offer. They might include admin fees, legal fees for collateralization, certification expenses, maintenance costs, registration fees, etc. which are added on to your lease payment. Service agreements on the asset your are purchasing can also be added to monthly payments.
CREDIT APPROVAL FOR YOUR TRANSACTION IS KEY
Finally, point # 7. It’s simply that you should strive to ensure you are fully credit approved for equipment asset finance transactions, as final credit approval drives both your rate plus some other issues that we have spoken of. You might also want to ensure the actual rate of the lease and verify that with a proper financial calculator. There are only 5 drivers to a monthly payment - term, rate, monthly payment, the value of the deal, and the end of term obligation. If you know 4 of those you can figure out the last one easily.
A business plan and cash flow projections are certainly not required for the vast majority of transactions, but those 2 items will often help in any financing for your company.
The equipment lease application process on new leases is very basic and straightforward, with many smaller transactions approved within a few days. Your business credit profile of course determines final rates/terms. A down payment may sometimes be required in the lease finance industry, although the lease finance industry as a whole touts ' no money down' often.
Some business owners might opt for a business loan structure as a financing option as opposed to a lease structure - it's useful to do a lease versus buy analysis when your transaction warrants it.
CONCLUSION
Don't let financing terms confuse your mastery of lease finance. The bottom line for small business owners is that successfully dealing with leasing companies and equipment financing in Canada can save you both time and dollars. Lease payments/tax credits are a business expense as far as lease accounting goes.
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor, who can assist you with your key fixed asset financing needs. At 7 Park Avenue Financial our goal is to be a financing partner and the lease specialists you can trust.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
7 Park Avenue Financial/Copyright/2020/Rights Reserved
