The Search For The Best Rates In Equipment Leasing Starts Here!

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Equipment Leasing – Canada: As a Canadian business owner or financial manager you want options for financing new and used equipment. (Yes, used equipment can be lease financed also!)

Clients always ask if a certain type of equipment can be financed – the reality is that pretty well every business asset can be financed, even if the transaction requires special structure or pricing.

Although we don’t necessarily agree with our clients view that rates and pricing are the most important aspect of equipment leasing the reality is of course that ultimately your overall combination of rate, structure, monthly payment, and type of lease, etc. must be competitive. ‘What’s my rate?’ is not our favourite question, but we usually respond that as a business financing client in Canada you actually get to pick your own rate!

Customers naturally think we are joking, but as we explain, the reality of equipment financing in Canada is that your overall credit quality and the asset you are financing determines your rate. For most transactions in Canada whether you like it or not your lease pricing is determined by something called historical cash flow. That has its advantages and, certainly, disadvantages. The leasing company looks at your historical cash flow and then makes a determination around your ability to make future payments.

Naturally if you had a challenging year (who didn’t have a challenging year in Canada in the 2008-2009) timeframe that presents a potential problem. However that issue can be relatively easily handled by something we call ‘structuring‘, or simply the ability to put together a lease with particular emphasis on flexibility in actual percentage interest rate, the term of the lease, the options you have at the end of the lease, and any special situations involving payment alternatives – for example, seasonality in your business, etc.

If we had to make on key point on obtaining the best structure in a lease its simply asking customers to remember that the overall structure of the lease has to make sense to you as the borrower and of course the lender from a viewpoint of overall credit quality and risk.

Many businesses are not aware that a significant number of soft costs can be financed in your equipment lease. These could include training; install fees, maintenance contracts, and consulting on some occasions. That’s a true working capital and cash flow saving.

Many firms tout ‘100% financing‘ as one of the main benefits of lease financing – the reality is that in most situations today there is some sort of down payment or security deposit. The alternative to a lease is of course a loan, and in that case you are more likely to get 100% financing, but you certainly won’t have the advantages of a true lease financing option.

Lease financing in Canada is available to all sizes of firms, including start-ups. The quick summary of major benefits is simply as follows:

So what’s our bottom line summary on equipment leasing – Canada. It is simply that you should view it as a major option in acquiring any business asset. Speak to a trusted, credible and experienced advisor who can show you how a solid pricing and structuring can assist you in acquiring any asset you require to generate sales and profit growth.

' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop is the founder of 7 Park Avenue Financial and a recognized expert on Canadian Business Financing. Since 2004 Stan has helped hundreds of small, medium and large organizations achieve the financing they need to survive and grow. He has decades of credit and lending experience working for firms such as Hewlett Packard / Cable & Wireless / Ashland Oil

Equipment Leasing Canada Best Rates 7 Park Avenue Financial