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Canadian Leasing - Financing Solutions that work

Guest post by: Stan Prokop

Article Overview: The article highlights basic financial fundamental reasons why Canadian business owners and financial managers choose lease financing as a great financial strategy for new equipment, technology, etc .

Canadian Leasing - Financing Solutions that work

Canadian Leasing - Whether you are a small to medium enterprise in Canada or one of Canada's largest corporations leasing continues to be a financing alternative of choice for Canadian business.

When we meet with business owners and financial managers to discuss their leasing options a key focus is the companies desire to both acquire new assets or technology, and at the same time reduce the drain on cash flow, working capital, bank lines, etc . Leasing provides that alternative.

Naturally every company has a bit different need relative to what they want to achieve financially via leasing. The current Canadian competitive landscape is simply one in which Canadian business can't afford to stay behind in equipment upgrades or technology.

The current ' cleantech' environment and all the buzz around the environment and energy savings often adds additional focus to acquiring new equipment that is more planet friendly ! A great example is in the IT ( Information technology ) area, whereby newer computers use much less energy, translating directly into bottom line savings We point out to customers if they can match the cash outlays to their savings in these areas that is a win win strategy !.

Putting ' cleantech' aside quite frankly it always comes back to cash flow and cash outlays for new equipment, Will you as the Canadian business owner or financial manager purchase new equipment out of cash on hand on our balance sheet, will you draw down on your line of credit to purchase an asset (we don't advise that), or will you enter in negotiations with your bank to finance equipment via a loan rather than a lease.

As noted, purchasing long term assets from you line of credit or working capital on hand is not recommended. You need to manage long term assets with long term financing. Remember also that if you engage our bank in a term loan for the equipment, as attractive as some of those bank rates might be, you are simply adding further concentration to your indebtedness to the bank, with additional pressures on loan covenants, debt to equity, cash flow coverage ratio, etc!

Savvy business owners and financial managers know that they can reduce the cash outlays even further by entering into operating leases, which have the effect of reducing your payments even further, and generally eliminating any balance sheet issues. For financial managers that are measure and compensated on return on equity if you can purchase new assets, finance them thru an operating lease, and grow your business - well, that's a solid home run!

Our customers often ask us what type of leasing is best. There are numerous aspects to those questions, but if we can arrange vendor or manufacturer financing that is more often than not the absolute best financing available - whether it be for computers, trucks, or sophisticated plant equipment, etc. That is because manufacturers and vendors are incented to sell you more, and they can use financing features to do that.

We advise our customers that in Canada lease financing is available on almost any asset from 5000.00 to 50,000,000.00!

In summary :

Investigate your leasing options

Work with a trusted leasing advisor who has credibility and experience and focus on your financing and cash flow priorities

Evaluate your options

Pick you're best leasing solution and you are on your way to increased profits through use of assets and hopefully greater sales growth!

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Article Tags: canadian leasing, equipment technology, financial strategy



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