Tweet

Canadian Lease Financing – Equipment Leasing Options Canada

Guest post by: Stan Prokop

Article Overview: Information on how Canadian business can access lease financing options. What assets can be financed and how can business owners save time and money on lease selection.

Canadian Lease Financing – Equipment Leasing Options Canada

Canadian Lease equipment financing continues to be one of the most successful means for a company to acquire assets of all types.

Unfortunately most clients we talk to are always focused on rate, which in many cases is only one small piece of the Canadian asset, based lending puzzle, and solution.

In Canada equipment of all types can be leased - that includes capital expenditure items from 5k to 50M dollars.

What should Canadian business owners focus on and seek guidance on when acquiring assets via the leasing option. We think three things are important -

- Who to lease from

- What are the key elements of a successful lease structure?

- What is required for an approval that meets your firms needs Vis a Vis rate, term, and structure.

In Canada the leasing industry is very fragmented. Like all other parts of the financial services industry the business has gone through major tumult in the last couple years, particularly the 2008-2009 global financial meltdowns.

So who are the players and why is it important to know who you are leasing with, as long as you are approved? Good question?! Let's explore the answer.

In Canada the leasing industry is self regulated via a national association called the CFLA. The companies that make up the industry are:

- Major international conglomerates and their Canadian subsidiaries

- Canadian owned private independent finance firms

-Captive finance Companies

- Independent lease originators, also known as intermediaries

So why is it important to understand who you are dealing with? Time is money, and a significant amount of time can be spent with a lessor who you think might be able to do the transaction for you, but ultimately your firm might not fit the asset and credit criteria required .

We referenced the major international conglomerates; a well known example might be GE. The reality is that these firms predominately focus on very high ticket value transactions with commensurately high credit quality criteria. We have spoken to many customers who have invested time, commitment fees, etc only to find they were in effect dealing with a firm that was unable to satisfy the size of their transaction.

Private independent lease firms in Canada tend to have niches - in the industry the term is ' credit box '. That simply means they only solicit a certain type of asset and credit quality - any transaction falling outside the box becomes not doable. Again, you may have totally wasted your time.

We are the first to advise clients that if they can get lease financing via a captive finance company or a vendor program via the manufacturer there is only one recommendation - ' Take the Deal!" Vendor and Captive programs are highly incented to finance assets at competitive rates and sometimes overlook the rational credit quality that is required to get a deal approved.

Recall that our final lessor category is independent finance originators, aka intermediaries - we hate the term broker by the way. The key benefit of working with a trusted, credible, and experienced advisor in lease financing in Canada is simply a time/ money scenario. You can spend hours, days, and weeks negotiating with firms who ultimately can't do your transaction. Along the way you may have laid out commitment fees as well as having your firms financials viewed by a number of different parties with whom you may never do business .

Our experience is that people prefer to deal with experts. Why wouldn't you want to work with an expert that can assist you in achieving the optimal rate, term, structure, etc? Simply things such as a recommendation on the type of lease you choose (capital or operating) can save you firms either thousands in interest, or have a significant effect on monthly payments. That is a solid acquisition financing strategy!

Related Articles
  Equipment Financing Specialist – Canadian Leasing Solutions
  Lease Financing - Canada business financing
  Equipment Financing in Canada – 2010 – Optimism for your Business Financing Prospects !
  Equipment Leasing
  Canadian Leasing - Your best equipment financing option!
  Lease Financing Canada – Canadian Asset Financing Solutions
  How To Work With The Best Canadian Leasing Companies In Business Financing and Financial Services ?
  Is a Leasing Company Your Best Choice For Business Equipment Financing – Choose Business Leasing That Makes Sense !
  Financing Equipment For Your Business? Canadian Leasing Options Demystified !
  Asset Leasing – What You Need to Know for Leasing Financing In Canada
  How Financing Options In The Canadian Equipment Leasing Industry Can Benefit or Harm Your Overall Profitability When You Lease Equipment !
  Instant Financing Access To Canadian Equipment Leasing Company Solutions !
  Equipment Capital – Financing Options you didn’t know you had
  Equipment Financing - Capital Leasing Options That Make Sense
  A Perfect Cure? Why Canadian Business Equipment Finance And Asset Finance Via Leasing Create A Tipping Point For Success
  Lease Equipment Financing – Canadian Solutions
  Equipment Leasing Canada – Critical Deal Factors
  Equipment Leasing Canada - Your best rates, Your best Terms!
  Innovative Financing From Canadian Leasing Companies . Mastering The Lease Versus Buy Decision
  Best Tips On Good Lease Rates , Pricing and Leasing Options in Canada

Article Tags: Canadian lease financing, equipment leasing options Canada



Related Forum Posts
Re: I need a mailing address for office space in Toronto - Jamie, I hope someone replies that has an idea or even experience with this question. I am in need of the same concept. I need a mailing address in Canada and then register our business with the Canadian Government to begin selling products in Canada utilizing Canadian monies. Someone must have already accomplished this goal - share your success with others. Dennis
Re: Introducing a US franshise to a Canadian market - When franchisors begin to expand outside of the United States, Canada is one of the first areas they consider because: 1. Similar culture 2. Same language in most of country 3. Some provinces require registration, but it is not considered too difficult. 4. An economy that generally mirrors that of the United States (may be different currently) The main cost for a franchisor would be contracting a Canadian franchise attorney to convert their legal documents to meet Canadian law, then reprinting their marketing material. If a person sees a franchise they like, that is not currently in Canada, they might approach the franchisor and ask about becoming an area developer for the franchisor. I don't think that most franchisors would not sell a master franchise in Canada, in which the franchisee takes over the entire country, because Canada is such an opportune areaa, but by becoming an area developer the new franchisee could have the right to develop/sell several franchises in a given area.
Canadian Entrepreneurs - Hi Evan, I think you should profile Anita from the Body Shop. Is she Canadian? It would be nice to get a Canadian perspective for all of us who are starting businesses in Canada. Do you find th stories of the entrepreneurs vary depending on country? Thanks for all these great stories - it helps inspire us! Jessica
re: restaurant start-up - I'm not sure about government grants for restaurants, but my recommendation would be to approach a lender that offers loans under the Canadian Small Business Financing Loan program where the government will guarantee 85% of the loan. You can borrow up to $250,000 to finance equipment and renovations under this program. Restaurants are very risky business, however some of the Chartered Banks will look at restaurants if there is enough of an initial equity investment and you have a solid business plan (experienced management team, good concept and strategic location).
Re: How many nationalities are on the forum? - While my parents were both from Asia, I was born and raised in Toronto, Ontario, Canada. As such, I'd always consider myself 100% Canadian I don't know if I could even call myself "Chinese" when I've never even been to China.


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

Listen to Your Inner Melody

Resistance to Change and How to Deal With It

Reverse Mentoring

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.