YOUR COMPANY IS LOOKING FOR LEASE FINANCING!
EQUIPMENT LEASING IN CANADA
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
Lease Financing in Canada . Financial Managers and business owners in Canada continuously find they are competing in a difficult and challenging economic environment. Equipment Financing and Capital expenditure issues are top of mind when Canadian firms are looking to grow and prosper. Revenue generating assets are important to any business.
ADDRESSING CAPITAL BUDGET NEEDS
When large corporations report their financial the analysts out there focus on Free Cash Flow. This is the cash flow that is left after a company totals their net income and depreciation and subtracts what they have spent on ‘Capex’, or capital expenditures.
BUYING ASSETS WITH CASH IS A CHALLENGE - AND MAY NOT BE THE RIGHT ACQUISITION STRATEGY
That free cash flow is of course what’s left to pay shareholders and run the business. But small and medium-sized firms have a huge challenge in generating free cash flow per our formula above. They more often than not don’t have the luxury of paying cash for much need new and revenue-producing assets.
That is why Canadian firms should be looking at Lease financing as an essential asset acquisition and cash flow tool. Let’s do a quick recap on the major benefits of lease financing:
4 KEY BENEFITS OF LEASE FINANCING
• CASH FLOW - Canadian businesses can conserve working capital and invest those funds instead in receivables and inventory for additional growth – Also firms want to achieve the benefits of these newly acquired assets over time without having to pay for them all at once on day one - the ability to budget for monthly payments over the life of the lease is a key benefit in equipment financing
• TAX BENEFITS – Lease payments of course can be expensed and are generally more advantageous from an accounting viewpoint than a loan
• BETTER ASSET MANAGEMENT - Every firm wants to stay ‘leading-edge ‘on asset acquisition, with respect to items such as computers or plant assets. At the end of the term of the lease, the Canadian business owner or financial manager has a number of options available with respect to asset disposition
• OFF-BALANCE SHEET FINANCING - Depending on the final structure of the lease a transaction can be recorded off your balance sheet – you are in effect using the equipment, gaining the benefits, but not owning the equipment.
EQUIPMENT FINANCING IS AN EASY PROCESS
Those are some of the more ‘technical ‘reasons for lease financing in Canada. Do the overall benefits of this financing alternative end there? They don’t! On balance the lease financing process is one of the simpler and easy ways to acquire assets – it also requires not large cash outlay, and your bank lines stay intact.
CONSERVE YOUR CREDIT FACILITIES
Canadian business owners have huge challenges in maintaining bank lines that are adequate for their business – leasing alleviates part of that challenge. The application process from a leasing company is simple and leases for firms with good credit are approved very quickly these days - note that on smaller transactions even financial statements might not be required - business owners should be able to demonstrate a good credit score - For firms that have ' bad credit ' lease transactions can easily be restructured for approval - as an example a down payment or shorter lease term
WHAT ASSETS CAN BE FINANCED? SPOILER ALERT - EVERY ASSET YOUR BUSINESS NEEDS!
What can be financed – the better questions are of course a shorter answer – what can’t be financed. Almost any asset can be financing in Canada if its core to your business needs – That includes of course technology, vehicles, machinery, production equipment, tooling, telecom assets, agricultural assets, and construction assets. Again, to be clear, if it’s a hard asset it can be considered for lease financing! The resale value of assets should also be considered as many assets hold their value to a certain degree - although technology assets typically don't !.. given fast-changing tech environments
CAREFULLY CONSIDER YOUR END OF LEASE OPTIONS
At 7 Park Avenue Financial we encourage our clients to consider the end of the lease options which play a key role in the overall pricing of your transaction - many clients ' over-focus ' on the monthly payment - Note that lease financing is very competitive and good rates for creditworthy
firms are always available. A lower monthly payment is important but there are other issues to also address in your transaction
CONCLUSION
As business owners in Canada, we want the right equipment at the right time in order to stay competitive and profitable.
So, longer-lasting a business concept than BITCOIN – The world's newest internet currency? Time will be the judge, but we sure think so. And is leasing the only financing alternative available to the Canadian business owner or financial manager – definitely not. Should it be understood and considered? Definitely so! Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a successful track record of asset finance solutions.
Click here for the business finance track record of 7 Park Avenue Financial
Stan Prokop
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