YOUR COMPANY IS LOOKING FOR FINANCING FOR EQUIPMENT!
LEASING COMPANY STRATEGIES FOR ACQUIRING ASSETS
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
Suite 301
Oakville, Ontario
L6J 7J8
Equipment finance in Canada. Is it possible, clients ask, to achieve asset financing ' nirvana' when it comes to running and growing your business and acquiring new equipment? Lease financing companies just might be the solution to that eternal conundrum of acquiring the equipment you need for your company. Why? Let's dig in.
WHO USES EQUIPMENT LEASING STRATEGIES TO ACQUIRE ASSETS? SPOILER ALERT - ALMOST EVERYBODY!
Leading experts tell us that 80% of North American companies use lease companies when acquiring assets. So when the Canadian business owner / financial manager understands how the leasing marketplace runs across Canada they are immediately ahead of the game in obtaining lease financing approval. Just investing some time in the basics we have always maintained can save you thousands of dollars.
Lease financing solutions become more effective when simple things like knowing how a lease finance firm generates a ( fair ) profit, how they evaluate your firm and asset finance request, and even simply saving tons of management and ownership time by knowing who the players are. Any asset, new or used, can be financed properly.
Companies with business credit challenges can utilize leasing equipment as these transactions are restructured to allow for financing- for example, a down payment requirement, shorter lease term, etc. That allows every credit profile to be in a position to apply for leasing. The application process in equipment finance is streamlined and small and medium-sized transactions are adjudicated and approved very quickly. While of course, the interest rate in the transaction is important, it's equally of value to focus on what profits and revenues the asset can generate in your business.
Miscellaneous or additional services such as maintenance, service, etc can easily be bundled into the lease amount.
While some firms may wish to acquire assets via a business loan/bank financing, or other credit facilities they have in place they will often perform some sort of lease versus buy analysis to ensure they are making the right financing decision. Business owners and financial managers should note that in general, they should not use short-term credit facilities that are available to acquire assets for the long term. It's a simple matching principle in corporate finance, while at the same time conserving working capital and not just focusing on the equipment loan interest rate.
ANY BUSINESS EQUIPMENT ASSET CAN BE FINANCED - INCLUDING USED EQUIPMENT, TECHNOLOGY, SOFTWARE, ETC!
In Canada today you can pretty well lease any asset, many intangibles included, such as computer software, or service and maintenance contracts related to your acquisitions. Lease financing companies thrive on serving all aspects of asset size, from the small ' micro ticket ' transactions right up to and including that personal jet aircraft you've placed an order for via that equipment leases. By the way, lease payments and interest on that jet are tax-deductible!
HOW IMPORTANT IS CREDIT QUALITY IN EQUIPMENT LEASE FINANCING APPROVALS
If your firm has solid credit, typically exhibited by growing revenues, cash flows, and profits that are reflected in the balance sheet you're even in a strong position to negotiate rates that are extremely aggressive these days. Even the banks have fairly strong ventured back into offering equipment finance via separate divisions within the banks. Although credit criteria are high interest rates and structure flexibility are extremely attractive via leasing companies.
Medium-sized and larger corporations and governments commonly even find themselves in the enviable position of tendering out their lease finance business to leasing companies - thereby acquiring finance rates and lease terms that are the best within the industry. Safe to say the small business in Canada does not have that luxury!
GET EXPERT ADVICE ON LEASE FINANCE TRANSACTIONS
It always helps to have some expertise backing you when you venture into the lease finance world as a ' NEWBIE ' for your business needs! That might include advice from a seasoned business advisor, accountant, or lawyer on financial statement issues related to your lease request, the type of lease you are choosing, how to protect yourself in the documentation process, etc.
FOCUS ON END OF TERM OPTIONS
If you know your business you should clearly know your firm's assets and their values. A large part of the ' profit strategy ' of lease financing companies in Canada revolves around the bet that you'll return the equipment. So low monthly payments sometimes come at the risk of having to return the asset at the end of term, allowing the lessor to capture that ' reasonable ' profit we alluded to earlier. Most business owners focus on just ' lease payments' and their ability to fit the financing into their cash flow needs; at 7 Park Avenue Financial we work with clients and strive to get a holistic approach to the transaction - some industry players call that a ' cradle to grave ' approach!
IS AN OPERATING LEASE A GOOD CHOICE FOR YOUR BUSINESS
We find many of our clients don't fully understand operating leases offered by equipment leasing companies, as such they are seduced by low payments, and even what can seem like negative interest rates, not fully understanding their obligations at the end of the lease term.
HAVE YOU CONSIDERED OFFERING CUSTOMER FINANCING SOLUTIONS TO YOUR CUSTOMERS VIA A PARTNER FIRM SUCH AS 7 PARK AVENUE FINANCIAL
Don't forget also that you can often increase your own firm's sales by lowering the sales cycle time by implementing a customer finance program for your own customers if your product allows you to do that. You can easily align yourself with a finance partner that will work with you and clients to maximize revenues, eliminate client budget challenges, and simply make the adoption of your products ' hassle-free '.
CONCLUSION
The bottom line? Business owners and managers never want to lull themselves into complacency when it comes to staying competitive and ensuring they have control over financing equipment. However, as we have shown a strong grasp of asset financing via Canadian equipment finance companies saves you money, time, and prolongs your competitive edge, allowing you to grow your business. While business plans and cash flow projections aren't always required it might be a good idea for more complex transactions.
Seek out and speak to a lease lending trusted, credible and experienced Canadian business financing advisor who can assist you with your asset finance needs in Canadian equipment financing.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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