Why The Equipment Lease Bravely Steps Up : Leasing Company

Solutions Help Acquire Assets

Getting t Wrong s !ot An "ption When t Comes To Asset Lease #inance
"$E%$EW & n'ormation on (hat )ey concepts *usiness o(ners an+ 'inancial
managers must a++ress (hen constructing the right equipment lease (ith their
chosen leasing company solution provi+er
Equipment lease solutions aid in acquiring assets. Simple as that. It's a solution that's
used by a majority of businesses in Canada and the U.S. alike. But can you ' get it wrong '
when it comes to a leasing company choice. In some cases any mistake in financing an
asset properly costs your firm time and money. et's dig in.
!hether you're a public company" a go#ernment entity" or e#en a start up it's still
important to gi#e serious attention to how you're leasing and asset" who you are dealing
with" and the rights and obligations you ha#e in leasing equipt, in Cana+a,
easing is all about cash flow conser#ation" so some solid cash flow planning around
projected monthly payments relati#e to the useful life of the asset.
$aturally no form of Canadian business financing is ' all inclusi#e ' and works all the
time % so yes" alternati#e options do e&ist. 'hey include loans or rentals" although rentals
are in effect a form of the - operating lease - solution,
(icking the right term is critical as it relates to our cash flow mention" as well as being
able to accurately determine the life of the asset. !hile longer term)amorti*ations are
a#ailable typical lease terms are +%, years in Canada. Certain hea#y
equipment)aircraft)production equipment etc lends itself to much longer terms potentially.
It seems our clients always only want to talk about ' rate' ' interest rate' considerations on
any transaction. 'hat's all well and fine but the actual terms of the lease as well as type
and structure are considered much more important by e&perienced lessors. -t the end of
the day your o#erall business credit quality .or lack thereof/ will take care of the interest
rate question" if only for the reason that the industry itself is #ery competiti#e these days0
It's that competiti#eness that will allow you potentially negotiate critical customer
concerns such as down payments that might be required" the dreaded - personal
guarantee-. or end of term options such as upgrading" returning" e&tending the lease .
1any of our clients we initially talk to don't fully understand that - capital lease- .i.e.
lease to own/ solutions are known as ' hell or high water ' contract" requiring you to make
all the payments under the lease % i.e. no early terminations" etc.
!ho in fact offers lease finance solutions in Canada. 2ou'd be surprised at the number of
players3 they include some of our Canadian chartered banks" independent commercial
lease firms" capti#e organi*ations within certain large manufacturers" and niche players.
In some cases your lessor might be 4556 Canadian" in other time it might well be a
subsidiary or di#ision of a U.S. organi*ation. .$ot that there's anything wrong with that0/
So is there any one way to guarantee you are aware of and selected the right lease
structure and lessor7 8ne possible solution is to seek out and speak to a trusted" credible
and e&perienced Canadian business financing ad#isor who can ensure ' getting it wrong '
is not the option.
Stan /ro)op % 0 /ar) Avenue #inancial :
http:11(((,0par)avenue'inancial,com
Business financing for Canadian 9irms " speciali*ing in working capital" cash flow" asset
based financing " :quipment easing " franchise finance and Cdn. 'a& Credit 9inance .
9ounded +55; % Completed in e&cess of <5 1illion = of financing for Canadian
corporations . n'o 1Contact :
0 /A%2 A$E!UE #!A!CAL 3 CA!A4A! E5U/6E!T LEASE
#!A!C!G E7/E%TSE
Have A 5uestion 1Comment "n "ur Blog "r Cana+ian Business #inancing
Alternatives 8
C"!TACT:
0 /ar) Avenue #inancial
South Sheridan :&ecuti#e Centre
+<45 South Sheridan !ay
Suite >54
8ak#ille" 8ntario
?@ A@B
4irect Line C ;4? >4< ,A?<
"''ice C <5, B+< +?,>
Email C sprokopDAparka#enuefinancial.com
- Cana+ian Business #inancing With The ntelligent Use "' E9perience -
Stan /ro)op