YOUR COMPANY IS LOOKING FOR A BUSINESS EQUIPMENT LEASE!
COMMERCIAL EQUIPMENT LEASING IN CANADA FOR BUSINESS EQUIPMENT 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 Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8
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What is my rate?' is a question we’re often asked by customers when they work with us with respect to business equipment financing lease solutions. They are surprised when I tell them that they get to pick their own rate! (All customers want the lowest rate!)
CREDIT QUALITY DRIVES A GOOD INTEREST RATES
We’re not trying to be facetious when we make that statement. What we are saying is that the overall credit quality of a customer, as perceived by the lender ( that's important!) is in fact set by the customer, thereby driving a final approval on the interest rate, term and structure of the proposed financing request to the leasing company.
The role of the customer or their trusted advisor is to understand the basic credit information requirements and how the overall risk to the customer and their industry will be perceived by the lender. The irony of a lot of business leasing is that the industry for the most part used historical analysis to project future ability to pay. That is a difficult concept for the customer to handle more often than not - as an example the customer may have lost some money last year, driving a negative cash flow figure. Prospects have improved, new orders are coming in, and yet the business has a problem in getting new financing.
7 KEY ISSUES IN LEASE FINANCING APPROVAL IN YOUR APPLICATION
The customer needs to ensure that the information and ' story ' make the transaction become more ' approvable'.
Critical categories in the information submitted by the company are as follows:
Length of time in business
Personal credit history of the owners/credit score
Relationships with other financial institutions
Quality of the financials (Some customers submit balance sheets that don't balance!)
Additional collateral available if necessary
Summary of key financial info such as depreciation, cash flows - Business plans are optional, and certainly not required, but they certainly could help on larger transactions. 7 Park Avenue Financial prepares business plans for clients that meet and exceed any lenders requiements
Positive focus on management and its background and experience
NEED HELP IN GETTING YOUR LEASE APPROVED? CALL 7 PARK AVENUE FINANCIAL
If the customer is qualified to make such a submission a solid package as per our list noted above should lend itself towards approval at current market rates and structures when it comes to equipment leases and financing options around the cost of the equipment.
If the customer feels they are not properly qualified to make such a submission they are strongly encouraged to use a qualified intermediary who knows the industry and, more importantly, knows the specific weighting given by a lender to the above-noted submission requirements. Owning the equipment outright is typically solved by a capital lease, versus an operating lease solution when it comes to the purchase of the equipment and final disposition at lease term.
The amount of information required around each component is more often than not determined by the size of the transaction or the lender's total exposure to that customer. In many cases, small ticket transactions (those under $ 25,000.00) are adjudicated via a credit application and public reporting sources such as Equifax or Dun and Bradstreet. Typically 60-70% of all small-ticket transactions are approved. Knowing your intentions on the use of equipment at the end of the lease is also important to consider in your transaction. Monthly payments on the equipment you need are affected by the type of leasebu and term. Your firm can of course use your line of credit but most businesses want to conserve capital lines and existing credit facilities they have with the bank or other lenders. A business loan or equipment loan is also feasible of course, which brings up the issues of performing a lease versus buy analysis for larger transactions.
CONCLUSION
In summary, customers who want to get a prompt and of course positive lease approval when leasing equipment should focus on providing a clean package of required information that will ensure a prompt approval based on specific industry requirements around the transaction size and asset type.
Knowing that the lender will focus on the future potential of the firm, the management experience, and the collateral asset are valuable data points for any business seeking a business equipment financing leases. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your lease finance needs.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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