|
Lease Financing - Canada continues to be challenged, as is the rest of the world, for financing options and alternatives for asset financing and acquisition. Every Canadian firm has probably examined all their financing options over the last year or so., which have been particularly difficult re obtaining proper business credit and financing. Prudent business owners will examine all their financing options in the Canadian market place. Naturally they are looking for solid rates, terms, and structures for every aspect of their business financing needs. For equipment acquisition that often is a lease financing scenario. The very positive aspect of equipment lease financing in Canada is that is can serve the financing needs of Canadian business at every stage of the business cycle, start up, growth and expansion, and special project needs . Most leases for business financing of assets in Canada tend to have three to five year terms. The quick questions for asset financing in Canada is ' so what can't be financed ' because currently almost every type of asst is financeable based on proper credit and structuring of a transaction. That of course means vehicles, machinery, plant equipment, computer technology and software, etc! The smartest thing a business owner can do if they are not ' lease savvy ' is to work with a trusted financing advisor or intermediary who has credibility and experience in this area of finance. Leasing works best and is most applicable to Canadian business financing when your company has high capital requirements in excess of your ongoing cash and credit lines. In many cases leases represent 100% financing, sometimes it is 100%+ financing as leases can cover delivery, installation, maintenance, etc. Preservation of working capital is top of mind for most business owners, and leasing fits that challenge nicely. The general rule of thumb in leasing is the old adage, ' if it appreciates buy it - if it depreciates lease it!' When your asset and capital expenditure items will need replacement or will have depreciated significantly in a three to five year period - well... thats the time to consider lease financing . We believe strongly that leasing is best provided in Canada by independent third party firms who specialize in this type of financing. What the leasing industry likes is that equipment financed via lease earns profit and generates revenues for Canadian firms. As you contemplate a business financing lease you should ensure that you are addressing and thinking about some key issues - They are basic but important - 1. Your lease term should generally match the estimated life of the asset - bottom line? Don't enter into a 5 year lease for a personal computer upgrade... they might not last that long. 2. Ensure your monthly payments reflect your repayment and cash flow budget and request seasonal or quarterly payments if applicable 3. Determine what type of lease you need - capital lease to own, operating lease to use and return, it's that simple Properly structured leases (we recommend using a lease advisor) can impact in a positive way your financial statements and tax issues. These should be discussed with your accountant, or as noted, lease advisor. Some equipment leases can float, most quite frankly are fixed rate - Rates currently in Canada are very low and competitive in the 2010 business environment. In general lease approval in Canada is solely based on your ability to pay, so a proper package should be put together demonstrating you're historical and future cash flows, etc. Naturally that type of info is required in almost any business financing. Leasing in Canada - examine the possibilities! Stan Prokop is founder of 7 Park Avenue Financial - www.7parkavenuefinancial.com Originating financing for Canadian companies,specializing in working capital, cash flow, and asset based financing , the 6 year old firm has completed in excess of 45 Million $ of financing for companies of all size . For info and free consultation on Canadian business financing and contact details see : http://www.7parkavenuefinancial.com/lease_financing_Canada.html
Related Articles -
lease financing canada, equipment financing Canada,
| 
