Tweet

5 Tips For Selecting The Right Leasing Company For Your Equipment Finance Needs

Guest post by: Stan Prokop

Article Overview: Make equipment leasing work for your firm;Information on Canadian Equipment finance – What are 5 critical factors in selecting the right leasing company to work with and mistakes to avoid around equipment financing decisions.

5 Tips For Selecting The Right Leasing Company For Your Equipment Finance Needs

Partnering is more often than not the right thing. Bad partnerships don't work and can adversely of course affect your business. That's why it is so important to select the right firm to originate your equipment finance needs.

The right leasing company on a long term basis will ensure that you are investing properly in the assets you need to run your business for your customer base.

Let's look at 5 key tips we can provide you to ensure you are putting the right financial strategy in place around asset acquisition. Successfully working and negotiating through these tips with the right leasing partner guarantees you business equipment lease financing success.

Its all about getting approved of course , and getting an approval quite frankly is the biggest decision your lessor has to make around the transaction - that approval can be significantly influenced by yourself - it is important to present both the positives around your firms financials, as well as the challenge you may have, or may be facing,

Chance of getting approved is significantly reduced if negative information about your firm or its financials arises after your submission. Factors that affect your approval are your time in business, your ability to have sourced financing in the past - i.e. other lessors, banks, etc. Other key areas of focus are trade references and the ability of the owners to demonstrate they run their personal lives in a fiscally responsible manner also. This is usually accomplished by the lessor drawing a credit bureau report. On transactions over 50,000.00$, as a general rule financial statements are required, and areas of focus will be your overall balance sheet health and the ability to generate positive cash flow to repay the lease .

Lets move on to rate, we are never under surprised with how much our clients focus solely on rate and their ability to drive down the lessors yield . In Canada leasing equipment is very competitive, and all we can say is that if you have presented your financials properly the market will ensure you have a competitive rate. Naturally you can spend all the time in the world securing a ' better deal ', but consider management time and total savings. A quick example: If you leased a 75k piece of production equipment and were quoted a rate of 10.25% and you spent a lot of time in sourcing another quote, re submitting your financials to a new firm, etc , and got a rate of 10.00% you would be saving twenty dollars a month. We'll let you decide the value of your time.

We have covered off credit approval and rates, Documentation are important also. You should be prepared to provide a proper invoice or quote to the lessor, as well as a certificate of insurance. The equipment lease and your acceptance of delivery are key to the lease commencement. Smaller transaction in Canada has been greatly simplified, so you should typically be provided with a one or two page lease agreement. Larger transactions are of course more complex.

The type of lease you choose and your analysis of the lease versus buy decision is also a key area of focus. Look at your cash flow Vis Vis payments you will make on a lease versus a loan basis. As a general rule leasing tends to be more expensive, but is easier to obtain and is less of a drain on your cash flow.

Two is the magic number. There are two types of leases you should inquire about, a full payout capital lease, as well as an operating lease where use of the asset is more important than owning the asset.

Your overall lease financing decision should be focused on a very simple question - namely:

- is the asset acquisition important to your business profitability and productivity. If new assets and proper financing position your business for competitiveness you have made the right financing decision.

We have covered off 5 key areas in the selection of a leasing company in the equipment finance area. If you find the information and the challenge overwhelming speak to a trusted, credible and experienced business financing advisor who will help you achieve lease financing that meets your goals.

Related Articles
  Essential Information For Equipment Leasing And Finance
  Equipment Leasing- Types and Advantages
  What You Should Look For In An Equipment Finance Company
  Lease Equipment
  Advice on Canadian leasing company Equipment And Finance Loan Transactions
  Choose Medical Equipment Finance To Remain With Technology Advancement
  Why Canadian Lease Finance Is ‘ Business Appropriate ‘ – Use Equipment Leasing Companies To Acquire Your Business Assets
  How To Work With The Best Canadian Leasing Companies In Business Financing and Financial Services ?
  Give An Edge To Your Business With Equipment Leasing
  Guess What Canadian Business Financing Equipment Company Has The Best Finance Lease For You ?
  Is a Leasing Company Your Best Choice For Business Equipment Financing – Choose Business Leasing That Makes Sense !
  Equipment Financing in Canada and Debt Capacity
  UK Business Finance - Do I Need To Insure My Equipment?
  Reasons to Finance (Not Purchase) Equipment
  Why Canadian Business is More Greatful than Ever For Equipment Leasing and Financing and asset finance Solutions!
  Does Your Canadian Company Have A Serious Asset Finance Loan Or Leasing Strategy ? You Need One!
  Making Sound Choices With Your Leasing Finance Company? Canadian Operating And Capital Lease Solutions
  Lot’s To Gain & Nothing To Lose . 4 Tips On Best Leasing Companies For Asset Business Financing
  A Shortcut To Leasing Equipment And Business Finance Lease Solutions & Services In Canada
  How to Acquire Equipment Finance Leasing and the Best Leasing Services and Rates

Article Tags: equipment finance, equipment leasing, leasing company



Related Forum Posts
Business Tips - How about: Tips for managers to handle employees more effectively? Tips on how to deal with difficult customers? Tips on how to deal more effectively with suppliers? The only three I have in mind right now, but will try to come up with something else. Chris
Re: Finance is the primary requirement of business - [quote="rauljoseph":36x8dadn]Finance is very important in a business. It is all about managing the business' money and other assets. Finance includes the study and analysis of processes, financial institutions, markets and instruments that are involved in the transfer of money or anything that has a monetary value among consumers, businesses and government.[/quote:36x8dadn] Good point. I'll just add that if I was going into business for myself and could only have one skill it would be Sales & Marketing. You need to be able to create customers first and foremost. Finance is more of a support function for entrepreneurs.
Finance is the primary requirement of business - Finance is very important in a business. It is all about managing the business' money and other assets. Finance includes the study and analysis of processes, financial institutions, markets and instruments that are involved in the transfer of money or anything that has a monetary value among consumers, businesses and government.
The 11-7-06 NEFA Meeting went very well! - The NEFA meeting held Tuesday November 7th went very well. The meeting was very well attended and Mary Tomzack of FranchiseHelp, Inc. presented her unique perspective in regards to franchising. Mary also distributed a copy of her book, "Tips & Traps of buying a franchise". The next NEFA meeting is January 23rd, when the IFA Chairman "Doc" Cohen, an American Cookie Company multi unit franchisee with make a presentation. I'll post more information when the date gets closer. Thank you!
How to valuate a business - Hi Garth - here is how we did it at Northern Crown Capital when I was helping them raise venture capital for Toronto-based entrepreneurs. Assume the start date is 2003 so 2008 projections are 5 years out: How Northern Crown Capital Valuates a Business 2008 Financial Projections Earnings Before Tax $5,865,000 Tax Rate 42% Taxes $2,463,300 Net Earnings $3,401,700 Amount Seeking to Raise Today $3,500,000 Discounted Value of Future Opportunity, 5 Years Out 2008 P/E Ratio 15 Value of Company in 2008 $51,025,500 Discount Rate Applied 30% Year 2008 $51,025,500 Year 2007 $35,717,850 Year 2006 $25,002,495 Year 2005 $17,501,747 Year 2004 $12,251,223 Value of Company at Investment in 2003 $12,251,223 Less: Investment Amount $3,500,000 Present Value $8,751,223 Discount for Risk & Private Company 40% Less: Discount for Risk & Private Company $3,500,489 Private Company Value $5,250,734 Present Value (What the Owner Keeps) $5,250,734 60.00% Financing (What the Investor Gets) $3,500,000 40.00% Total $8,750,734 100.00% I hope this helps!


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

How To Calculate A Minimum Fee For Your Services

Common Sense Stress Management

Word of Mouth Marketing Tips Fuel Success

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.