How To Get the Best Finance Deal When You Lease Equipment from Commercial Leasing Companies
Financing Equipment – Tips, strategies and Info!
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Isn't it true that everyone knows ' a guy ‘ in business? Today we'd like to be 'your guy' when it comes to best deal / best pricing when you lease equipment via commercial financing leasing companies. Let’s get some major benefits around equipment financing, pricing, and structures.
As a Canadian business owner and financial manager, you just might be overlooking one of the best forms of long term 'asset finance' capital in Canada. And getting a solid deal on rates, terms, structure and prompt approval is why commercial leasing companies are often massively underutilized when it comes to providing your company with an alternate form of financing.
As we said, we promised to be 'your guy' ... so here it goes. You can immediately go to the head of the class by showing that you are aware of a major choice you need to make when you start the lease vs. buy equipment decision. There are two types of leases, capital and operating. Think of them as basically owning or using, in that respective order.
Have you been read your rights? No, we're not arresting you... just letting you know that as 'your guy' you have all sorts of rights when you enter into an operating lease. Payments are cancelable at end of term and you have no ownership or acquisition rights. However, the good news is that if you choose to, you have the right to purchase the equipment, upgrade it and refinance, or return or extend the transaction. How is that for flexibility? And you make those choices, not the lessor.
Naturally, when you opt to own equipment, as many assets to maintain their value (don't think computing in this case!) you now have a non-cancelable commitment but payments are fixed and if you're smart you will match the term of the lease to the expected useful life of the equipment.
Don't forget also that we can divide the area of capital leasing into two subsets - a direct acquisition of an asset, or a sale leaseback on assets you already own. Sale leasebacks were somewhat out of vogue during the 2008 -2009 global recession, but they seem to be coming back, and as an alternative, many of our clients have benefited from a simple short term bridge loan (i.e. not a lease) on certain unencumbered assets. At the end of the day, it’s purely a financial move on your part - generate working capital from assets you already own.
Again, we're 'your guy', right? So we have an obligation to remind you of 6 other key benefits of lease equipment strategies in Canada. Working with commercial leasing companies on these strategies will save you thousands of dollars.
The strategies are the freeing up of working capital in your operating lines. In business, you want to match the right debt with the right assets, and lease finance perfectly handles long term asset financing. The other 5 benefits are 100% financing, no additional outside collateral requirements, tax write off of assets that normally might not be expensed, simplified record keeping and approval processes.
Have we done an 'ok' job as 'your guy' in equipment leasing? We hope so. Are there potential disadvantages or other solutions to lease equipment or acquire assets? Yes, there are. So speak to a trusted, credible, and experienced Canadian business financing advisor on commercial leasing strategies that will work for you, not against you. That’s business 101!
lease equipment leasing companies commercial
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' Canadian Business Financing With The Intelligent Use Of Experience '
STAN PROKOP
7 Park Avenue Financial/Copyright/2024
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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
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