Put An End To Canadian Asset Finance Problems! Use Smart Lease Financing & Capital Leasing Strategies

Bank Finance Challenges For New Assets ? – Here’s A Solution

Information on lease financing in Canada. Use smart asset finance strategies and these tips to win with capital leasing solutions that make your firm a winner in asset financing .




Safe to say that Canadian business owners and financial managers have enough to worry about these days, so asset finance via lease financing for capital acquisition of equipment, hardware, software, etc shouldn’t be one of them!

The benefits of lease finance have been pretty clear to Canadian businesses for many years. And when we say ' Canadian business' that means in the case of capital leasing strategies every size of business in Canada, from start up to major corporation.


The industry in Canada has tended to segment itself into 3 size categories, simply speaking small, medium and large ticket transactions. In Canada billions of dollars of capital has been invested into the industry and those funds are used to finance your equipment needs- everything from hard assets and the soft costs that are associated with them, up to and including software, cloud computing, well, you name it!

There is always an ongoing debate as to the cost of lease financing versus buying an asset outright with your own funds, versus leasing it. It's the proverbial ' lease vs. buy' that many of us are faced with even in our personal finances when we decide to buy a new car, etc. Depending on the variables in the lease vs. buy template we suppose that in certain occasions leasing might be more expensive. But whets the alternative when you think about it, because that involves using a large amount of your business cash or operating line of credit, or applying at the bank for a term loan and not getting approved.

When we speak to clients about capital leasing its loud and clear that they utilize this time worn asset finance strategy simply because it’s easily obtained. It’s as simple as that. In reality a large part of the industry, certainly in the small ticket area - i.e. 1-50k operates only on an application only basis, no financial stats required. Naturally in larger transactions you do need a solid application that includes historical and interim financials, info on the owners, etc.

When you are looking to achieve a solid rate, term and structure around your asset finance transaction it’s important to receive a quote that is clear. We are not impressed by some in the industry that tend to use a smoke and mirrors strategy around getting your business, as the industry in Canada is quite ' hot' and ultra competitive these days. In reality there’s only 5 key elements to your transaction - term of the lease, rate, payment, end of lease obligation and value of your transaction. So understand them and make sure it’s an ‘apples to apples ' comparison. Utilizing the services of an experienced lease financier in Canada can often save you thousands of dollars and speed approval.

So if for any reason bank financing is ' elusive’, and you wish to preserve valuable cash flow speak to a trusted and credible and experienced Canadian business financing advisor who can assist you in maximizing asset acquisition needs in Canada. 80% of all businesses lease finance, so welcome aboard!



ABOUT THE AUTHOR - STAN PROKOP

7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS FINANCING

'We Finance The Little Guy'

P.S. We finance the big guys also@


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

How to Successfully Avoid 6 Risks in Business Equipment Leasing in Canada – Make Lease Financing Work!

Managing Risk in Equipment Financing For Canadian Business Owners and Managers


Information on how to successfully work through and manage 6 potentially overlooked risks in business equipment leasing and lease financing in Canada .




It's not always just about the benefits of adopting a business strategy such as business equipment leasing and lease financing... sometimes it is about ensuring no undue risks are also taken.

So let’s examine 6 risks that Canadian business owners and financial managers can manage if properly understood at the outset of any lease transaction.

First of all it’s always great to understand that leasing equpment is all about two things, your rights and your obligations. Your ability to assess those at the start of your transaction is critical.

Our first risk management issue is the concept of addressing the end value of your asset at the end of the term. While most business equipment leasing in Canada is done on 3 -5 years terms shorter terms are possible (generally 2 years is the shortest) and assets that have long economic lives are often lease for in excess of the 5 year norm. If you are entering into an operating lease you must clearly understand that you have the obligation to return, buy, or re - lease the asset at the end of term.

That’s when knowing the potential value of the asset is important. If in fact you feel it has value why pass that value on to your finance partner without some sort of participation or negotiated benefit to your firm. In fact many leasing companies make a tremendous amount of profit by placing bets on the value to you, of the asset, at the end of the lease term. So make sure it’s an equal fight, so to speak. Discuss things such as early buyout or fixing a price at the end of the lease term that is mutually acceptable to both parties.

Our second issue on risk avoidance is the concept of maintaining your asset. While some assets, perhaps such as computers for example require little maintenance many other assets (think plant machinery or rolling stock) require some level of care. Lessors recognize this and often, if not always, write this into the lease. So understand your maintenance obligations.

It’s a ' taxing ' matter. Taxes! That’s our third risk element. Ensure that you and your management or financial team understands all the correct depreciation and tax issues surrounding your lease transaction. This is clearly a time, especially on larger transactions to invest a bit of time in speaking to your accountant or tax expert .The many benefits of equipment financing can sometimes be swept away by your inability to properly address tax, deprecation, how you account for the lease, etc.

Our fourth issue is the concept of upgrading during or at the end of term. Understand here that lessors are incented to keep leasing you assets in Canadian lease financing. Understand your upgrade options at the start of your transaction, and ensure they are properly document in your lease, whether it’s a capital or an operating lease transaction.

Our 5th risk avoidance tip is to properly reflect on indemnification. If any sort of indemnification is required in your lease ensure it is within reasonable risk and control. Issues such as title, transfer, operation of the asset should all be properly documented to your satisfaction

Our final item is in fact the insurance issues revolving around your lease. Ensure you insure am I guessing what we are trying to say, allowing for your insurance firm to cover the risk of any loss, damage or theft to your assets. In fact most lessors, who are in effect purchasing the asset for you and ‘renting’ it back to you, actually require you to provide a certificate of insurance on your transaction.

So, is there a bottom line? As always there is in business, and in this case it’s simply to view each business equipment leasing and lease financing transaction you undertake not only from a benefits point of view but from a risk avoidance perspective. Speak to a trusted, credible and experienced Canadian business financing advisor for additional assistance.



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 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :

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

10 Considerations For Equipment Leasing and Lease Financing In Canada – From Start to Buyout !

Use This Savvy Expertise To Master Equipment Lease Success For Your Company


Contrary to what Canadian business owners and financial managers might think it’s not always about the approval and the rate in lease financing in Canada. Let’s look at ten (yes ten!) other things you need to consider, from the start of an equipment leasing transaction to the end or buyout!

There a number of terms and issues that play a key role in the overalls structure and proper documentation of an equipt. lease in Canada. In some cases they should be viewed as your rights, in some it’s critical you understand your obligations.

Let’s dig in. In Canada the customary point of a starting to an equipment lease is essentially when you the lessee have signed off on an acceptance certificate. Your signature on that document should mean that you are prepared to start payments on the lease, which in Canada typically range from 36- 60 months, with some exceptions based on asset type and your overall firms credit quality. By signing the acceptance it’s critical you understand that you have deemed the asset in good working order, as often times the lease company is not the vendor you have worked with, they are just the financier.

Lease terms as we said are typically 3-5 years in Canada. Many clients fail to recognize they sometimes have flexibility in adjusting payments to a quarterly or semi annual basis - dont always think in terms of monthly payments when you are adjusting your cash flow budgets.


In many instances, certainly for larger transactions you may be asked to provide a certificate of incumbency on the transaction - simply speaking that’s just your firms statement that the signing officer on the lease can obligate the company for this particular transaction.

Warranties on an equipment leasing transaction in Canada. As we stated in the majority of cases, unless you are dealing with a captive finance co owned by your vendor the lease company is just financing the transaction - so they are concerned solely with payment, not functionality of your asset. So ensure you have a solid understanding with the vendor on maintenance, warranties, etc., because; ask we said, these often should not involve the lease financing firm.

Although your asset is leased you should consider that it be properly maintained. In certain asset categories you might be asked to adhere to a specific level of maintenance, also relating to the fact that on return of the asset the lessor might in fact re lease or sell the equipment.

We aren’t big fans of leasing companies in Canada placing ' stickers' or other asset ownership references on the assets you lease. In some cases lessors might insist, but in general we feel clients can negotiate strongly on this point, especially if your firms overall credit quality is strong.

A certificate of insurance is generally required for any equipment leasing transaction, or even a term loan, in Canada. Your insurance broker will typically be very familiar with a standard form that lists the lease financing firm as ' loss payee' in the even of any unfortunate incident, i.e. fire, theft, etc.

End of term. Only a three word phrase but boy is it important in Canadian equipment leasing financing. These three words can make or break you when it comes to ensuring the lease transaction you entered into brought benefits to your firm. The basics around this issue are as follows - ensure you know how to terminate the lease from a legal obligation point of view. If you have entered into an operating lease understand clearly your ability to terminate, return, extend, or upgrade. In technology financing this is all important, but equally important to other asset categories also.

In Canada some lease companies will want a right of first refusal on all your business. We'll be very clear on our feeling on this issue - simply they should have to earn this right, not demand it! Enough said!

In certain instances you might want to be in a position to assign your lease, prior to the end of the term. Typically this is negotiated up front, and requires simply that a credit worthy other entity be prepared to pick up your rights and obligations. Because of how lease financing companies are funded in Canada you might often find your own firm as the recipient of a notice of assignment by your lessor - the bottom line - nothing should really change as your rights still remain under and assignment unless you have agreed otherwise .

Well, that’s it. A lot of issues, some important to your firm, others less so. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with rates, approvals, plus the number of other issues we have detailed than can make or break equipment leasing success in Canada.


Stan Prokop is founder 7 Park Avenue Financial ; see

http://www.7parkavenuefinancial.com

Originating financing for Canadian companies,specializing: working capital, cash flow, and asset based financing , the 7 year old firm has completed in excess of 80 Million $ of financing for companies . For info / free consultation on Canadian business financing / contact details see:

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

Capture 3 Benefits Of Lease Financing – With Canadian Finance And Leasing Companies

If we gave you 3 , among many, solid reasons to consider lease financing with finance and leasing companies in Canada , don't you think that just a couple of them would work for you, for sure? Maybe all 3 would?

If your company would like to become part of the successful majority of Canadian business in Canada it’s about time you understood and considered lease finance.

What then are some key reasons why business in Canada utilizes lease finance? There are other options of course, and it's up to you the business owner to determine which one works best for you, carefully analyzing whether debt or equity makes the most sense for your firm. It all comes down to whats important to your company and where you are heading with asset acquisition.

Reason #1 - Yes, there may be a down payment sometimes or a nominal security deposit but in general lease financing provides you with the ability to finance the entire asset. The asset is of course the ' hard cost ' of your acquisition, but many Canadian business owners and financial managers are pleased to know that there are numerous add ons let us call them, that can be , yes, ' added on' to the lease. They are items such as delivery, installation, warranty, training, service, etc.

Reason # 2- We hate to sound like economists here but the reality is that lease financing is a solid hedge against inflation. You in effect slow down the use of your funds, and at the same time can use cash flow and working capital you otherwise might have spent on the asset. That’s just common sense right?


Reason # 3- Term. One of the smartest things you can do when working with finance and leasing companies is to match the term of the lease with your best business estimate on the useful life the of asset . You're matching cash outflows to the benefits you receive from the asset, bringing those two together as much as you possible can.

Naturally we all realize that some assets depreciate quickly, some less so, and in a few cases (aircraft as an example ... or very heavy production equipment) the deprecation and obsolescence aspect is less of a concern.

In Canada lease terms can theoretically go to ten years in some cases, however the real world out there tends to favor 3-5 year lease terms. Many clients often are looking for a shorter term for specific project or asset type reasons - The shortest term we tend to recommend is 24 months - anything less than that doesn’t make real sense for the lessor, or yourself.


This then is your firms moment. Consider the 3 tips and benefits we have provided .You of course have everything to gain and nothing to lose. Want more info, or even help ?Speak to a trusted, credible and experienced Canadian business financing advisor who can maximize , for your company , these and other benefits of lease financing in Canada .





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 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

The New Truth About Business Equipment Loans and Lease Financing In Canada

Talk about the winds of change. Wow. And we mean ' really Wow! '. Was it only a year or two when lease financing in Canada seemed like it was almost on its back. Many lessors themselves were financially challenged, borrowing rates had risen dramatically (by the way - those are passed on to you!) and, most important, it was simply difficult to get approved - even with lessors with whom you had a relationship for years .

New Weather report! Sunny for business equipment loan! The new bottom line is that lease financing is back in a big way, the industry seems to have corrected itself, and with respect to you the borrower rates, structures, and oh yes , approvals ! are all over the place .

So let's ensure you don't miss the bus and let’s focus and recap on some major new trends (and old benefits) for this valuable part of business financing in Canada.

Appropriateness. Well here’s another shot of even more good news, in that lease financing continues to be right for every type of firm in Canada -. And that’s of course whether your firm is a start up, small to medium sized company, or a major Canadian corporation in the Financial Post 100. We think that pretty well covers everyone!

Abundance. We're talking about capital, and its availability. In case you didn’t notice abundance of capital, let alone getting approved for financing kind of disappeared in the 2008-2009 global financial implosion and recession. However banks, insurance companies, hedge funds etc are back to capitalizing the lease industry in a big way.
You probably know that abundance of capital means more often than not competitive rates and lease finance rates have slowly improved - with competitive pricing getting better everyday in the Canadian marketplace.

Creativity was always a second name for business equipment loans and leasing finance. So ensure you use this form of capital to finance anything that makes sense. And in the new economy that means anything from software, computing power, telecom equipment, and even a corporate jet... should you be that lucky.

Over time industries changes - and in the lease finance industry the overall Canadian market segmented itself into 3 sectors, small, mid and large ticket. It's very important from a time waiting perspective that you understand what niche you need to exploit via a Vis your capital acquisition needs. A 2k photocopier can be approved within minutes in the current environment, and if you are financing large asset acquisitions consider choices you have such as off balance sheet financing via operating leases, IFRS ( some new accounting rules) not withstanding .

So that’s the new truth in Canadian equpment financing. Lease financing for business equipment loans is viable, available, and creativity knows no bounds when it comes to asset financing for your firm.

Want to get plugged back in? Really quickly? Speak to a trusted, credible and experienced Canadian business financing advisor who will bring the world of leasing finance to your door very quickly.



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 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/lease_financing_business_equipment_loans.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!

--

www.7parkavenuefinancial.com

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

The Advantage of Lease Financing When You Have the Right Equipment financing Company As A Partner

In your lease financing needs wouldn’t you like to have what they call the ' home team' advantage? Advantages in business are great, especially when your competitor is on the other side of that advantage! That's why we feel the right equpment financing company in effect becomes your home team advantage, as it becomes a partner and solution provider for your lease financing needs.

You probably have already decided why you are going to lease, rather than buy and purchase outright. We start telling clients about things like the tax advantages of equipment financing in Canada, depreciation strategies that follow tax benefits, their ability to manage obsolescence, adding in install and warranty and maintenance into the lease , etc,etc,etc ..... but do you know what ? All those benefits are great, but firms such as yours more often than not are mostly concerned about cash flow and the concern of drawing down on bank credit lines, etc for equipment that ultimately depreciates or has to be replaced.

So yes, you do need to know all those advantages, and focus on the ones that make the most sense for your company, so you can maximize them - but the bottom line is that lease financing is mostly regarded as a cash flow tool. The textbooks call it the most efficient use of your resources when you have limited capital - we simply call it a great way to conserve cash flow.

One of the advantages of lease financing is simply clearly that it covers you from low tech to hi tech. What do we mean by that, simply that all assets can be properly financed if you partner with the right equipment financing company. That goes from computers and technology that seems to depreciate one second after you purchase it, to your shop floor and office equpment that might give you useful economic benefits for years.

And hey, what about that other advantage - leasing to own, or leasing to use? Many clients aren’t aware they can structure whats known as an operating lease whereby they use the asset, minimize their cash flow outflows, and have maximum flexibility at the end of the lease financing transaction. What is that flexibility? They can utilize one of three options at the end of the term - they can buy the unit, return it, or upgrade/extend the transaction. Tell us that’s not flexibility?!

So we've laid out all those great advantages, but it is easy to find the right lease financing company. Clients are surprised to hear that there are hundreds of lease finance firms in Canada - some are huge, some are small, some are geographic, some don’t want your type of business, some are dying to find you and get your business and provide you with great rates, terms, and structures.

If you don’t have the time to approach a few hundred firms, meet them discuss your needs, and give them your financial statements is there a solution. There is. Speak to a Canadian business financing advisor who is trusted, credible and experienced in lease financing. Flexible Terms, documents and credit approval come quickly when you have the right equipment finance company as a partner.

--


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_financing_company_lease_financing.html

Save Thousands When Utilizing Lease Financing Via Equipment Lease Companies In Canada

Your lease financing strategies in Canada are a balancing act, but do you know how to manage, or even locate the best lease companies in Canada? It's pretty clear to us that our clients are keenly aware of the tight balancing act you face whenever you contemplate an equipment financing acquisition .

We're reminded of the definition of ' Saving ‘... which is simply the act of managing a resource such as your capital and putting it to work in the best manner . But do you have to give up something to get a solid equipment financing approval with a structure that makes sense to your company. We don’t think so, and we will show you how to navigate, successfully! The maze of what is known as equipment financing in Canada.

We are reminded that the best way to be successful in achieving the benefits that lease financing bring to the table is to simply ' visualize ' them. More often than not in lease financing you are focusing on getting a return on investment on your acquisition, and structuring it financially in a way that makes sense.

Can you, as we maintain, save thousands of dollars on an equipment lease when you ' do it right’? We believe you can. But first you have to focus on why you financing the equipment, and why certain lease companies in Canada may or may not be your best bet when you finance.

You finance equipment for some very basic reasons - lets cover them off... and we get rid of the most boring one first, accounting. The accounting treatment of a lease is very important and often mis understood or not properly address when we discuss the issue with clients. For instance, if you can keep the lease off balance sheet you have just delivered a greater return on asset value to the owners or shareholders of your firm. That’s a key measurement used by owners, lenders and investors when they look at your firm. If you firm is capital driven, meaning you need lots of capital to run your business then structuring the right type of lease will have immeasurable positive effect on your performance and operating ratios.

Many operating lenders structure your credit agreements around your rations, and properly handled and accounted for leases can be a real positive in this regard.

Financial and cash flow reasons also drive owner behavior when lease financing in Canada. It's all about working capital preservation. Even negotiating a lower down payment or a higher balloon payment at the end of your lease can save you many thousands of dollars, depending on the size of your transaction. Those savings can be re invested into the company to generate further sales and profits.

Have you made the mistake of acquiring technology on a lease and then having to write down the book value of the lease half way through the transaction when you have just discovered, surprise, surprise! That your technology is now obsolete! Matching the tem of the lease with the useful economic life of the lease can save you thousands in potential equipment write downs in the technology area - think computer investments, telecom systems, etc.

We hate it, but most of our clients are focused on only one thing, which is the proverbial lease rate. Unfortunately equipment lease companies in Canada know this and can do a real number on your firm when it comes to camouflaging the true rate in a lease - this is done by quoting you payments calculated in arrears, getting first and last payments in advance, increasing the size of a security deposit, or charging you per diem rates for project type financing when leasing is required.

If you have all the time in the world and know every nuance of Canadian lease finance then by all means attend and address all of those issues and strategies. Alternatively, speak to a trusted, credible and experienced Canadian business financing advisor who will structure the right lease that focuses on benefits that are real to your firm, saving you thousands in the process. That’s a solid plan to save money !
--


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 6 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_companies_lease_financing.html