Canadian Do It Yourself Equipment Lease And Loan Advice – Commercial Business Financing

What caught our eye the other day in a U.S. based article was a title that screamed ' What's hot in Equipment Lease and commercial business financing '. The article went on to say that a large number of industries were totally back to using lease loan type financing for their asset needs.

But hey, this is Canada, so let’s try and make some sense of whats happening in equipment finance ' up here ' and how Canadian business owners and financial mangers can reap those same benefits.

Have you ever wondered what the most popular types of equipment are when equipment lease financing is utilized? In general the categories or industries that use this type of financing most are the following: Medical equipment, oil and gas assets, machinery tools, trucks and trailers, construction, and yes airplanes - clearly most aircrafts are financed!

It’s safe to say that if your company is in any of the above industries it might be advisable to jump on board, but the hard core reality is that lease financing and commercial business financing leases and loans can be utilized for any type of business asset. And when that asset creates revenues and profits for your firm a lease finance firm wants to be your financing partner.

Two key areas of equipment financing mentioned in the U.S. article were operating leases and used equipment valuation. It's been a tough couple years for all industries, and during the 2008-2009 but it is much easier these days to get used equipment financing, an appraisal or some type of valuation might be required.

As a Canadian business owner your perspective on asset acquisition probably constantly changes - you are wresting with general economic conditions, tax and accounting issues, and competitive pressures.

Can you actually be a ' do it yourselfer' in equpment lease business financing? We're the first to suggest expert assistance often helps but the bottom line is that many Canadian business owners are more sophisticated than ever when it comes to understanding the benefits of lease finance.

As a lessee you should be prepared to make a strong case for rates, terms and structures you think you deserve - this involves being informed about the general Canadian commercial equipment business financing market and then making smart choices when it comes to managing your working capital via this type of financing. Conserving your capital and cash flow , leaving your other borrowing power intact, and focusing on 100% financing of the asset will make you a do it yourself expert in asset finance .

Not 100% comfortable in working your way through types of leases offered, who are the players in the Canadian market, and structuring transaction that work from a cash flow perspective ? No problem? Seek out the services of a credible, experience and trusted Canadian business financing advisor who will assist you in your goals.


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Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/equipment_lease_loan_commercial_business_financing.html

How Can My Canadian Company Sell Or Remarket Equipment That Was on an Equipment Lease and is Not Required

Lease financing continues to be one of the major methods of equipment acquisition in the Canadian business environment. Business owners and financial managers of Canadian firms often with to replace older equipment with newer technology, and that can be of course anything from shop floor equipment to computers.

So what does the business owner do with equipment that he currently owns that was on a lease that has come to end of term? That equipment needs to be disposed of in an efficient and economic matter.

As a business owner you want to dispose of the equipment in a method that gives you the highest price while at the same time minimizing your expenses around that entire process. Back at the leasing company this entire process has an industry term, generally known as 'remarketing '.

In order to begin the process you need to look at a couple ' big picture ' scenarios - namely what do you currently believe the equipment is worth, and is there any sort of demand out in the market place for the equipment. If there is some solid sense that the situation can be advantageous in value to your firm ( we wouldn't recommend remarketing 1990 DOS based PC's..!) you need to asses what sort of costs will be involved and who in your firm will be primarily responsible for the divestiture.

So what's one of those 'bottom lines'? It is of course, what is the asset worth, and how do I determine that. Many industry publications for the asset type might provide you with a 'black book 'residual value on the equipment - that is similar to the 'black book 'we hear about at a car dealer's lot. Clearly this sort of number is only a guideline, as a lot of factors now come into play, like technology obsolescence (think computers!) as well as maintenance if in fact maintenance was applicable.

When you are looking at a disposition number that is reasonable you are in fact looking at three different numbers. Let's clarify that comment. You are looking for a number that matches the three industry terms -

FMV

OLV

FLV

Confused?? It's not that bad really. FMV stands for fair market value, and is a broad term which simply says that is it the price that a reasonable buyer will pay with no time constraints and some good market activity. It's quite comparable to selling your house and determining with the realtor what the current market will bear.

OLV is Orderly Liquidation value, and is essentially the auction process that might be held by you, an appraiser, or an auctioneer. The asset is put up for sale, and given current market conditions, is sold at highest bid.

FLV is forced liquidation value, and that is, from your perspective, kind of the ugly number - the asset has to be sold, it has to be sold tomorrow, who will give me what for it immediately, etc!

So the bottom line is we like FMV, we don't like FLV as the current asset owners.

Again, using our house analogy as an example you need to do some research into recent sales, that is of course because it gives you a ' comparable '. Your market research should come from both vendors and manufacturers and resellers of that type of asset.

In summary, disposing of a major off lease asset is a defined process. Care needs to be given to current market conditions and several industry terms revolving around the potential type of sale you will ultimately agree to. Successful completion of this whole process will allow you hopefully to enter into a new Equipment Lease financing transaction for assets to help your firm's growth and profits!

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www.7parkavenuefinancial.com

We finance the little guy - P.S. We finance the big guys also!