Tweet

Equipment Finance – Sale and Leaseback Solutions Canada

Guest post by: Stan Prokop

Article Overview: Information on sale and leaseback financing for Canadian business owners. Benefits of a Sales lease back financing and process overview

Equipment Finance – Sale and Leaseback Solutions Canada

Equipment Finance is one of the most popular and widely used financing strategies used by Canadian business owners and financial managers. It is a unique financing opportunity because it is kind of the opposite of a normal lease financing strategy. Why is that? Normally your firm has the need for equipment, and has cash flow and working capital to make the payment.

In a sale and leaseback financing the opposite is true. You have equipment, it's paid for, and the capital is of course tied up in the fixed asset account of your balance sheet. How can you unlock that capital and put it to work to generate sales and profits? The answer is the sale leaseback strategy.

You should consider a sale leaseback strategy when you have a need to improve your liquidity. What is the sale leaseback - very simply speaking it's the re financing of equipment you own under a lease strategy, so it is not a loan per se. There is one key accounting issue that we should point out though, and it's simply that if you refinance that equipment and the financing is more than you are carrying the asset for on your balance sheet (you have depreciated the asset over time) then the excess you receive over book value might be taxed as a profit. Bottom line, talk to you accountant on that point.

Implementing a sale leaseback strategy for your Canadian firm is easy - along with the normal business lease application you will need to generate a bill of sale to the lease company that transfers title back to them and title will once again revert back to your firm when the lease is repaid.

Depending on the size of your transaction, or the number of assets involved it might be advisable to get an appraisal , in fact one might ever be a requirement, as opposed to a ' nice to have '. We point out to clients that often work in your favor as it gives you a sense of what the true value is of the equipment and it might increase the amount you receive under the sale and leaseback strategy.

Another benefit of a sale leaseback strategy is that it potentially will make your balance sheet look better. In many cases your current ratio improves because you use the funds to reduce payables. You are more liquid and can use funds for such things as buying more inventories and taking discounts for prompt payment

In summary, a sale leaseback strategy is a great way to improve working capital and your balance sheet. Speak to a trusted and credible leasing advisor and determine if you can take advantage of those benefits.

Related Articles
  Delve Into Canadian Sale and Lease Back Financing – Benefits Of This Type Of Leasing Of Equipment
  What is a Sale-Leaseback and What Are the Qualifications?
  Canadian Sale Leaseback Financing – The Basics
  Sale Leaseback Financing Canada
  Which Of The 3 Asset Financing Structures Works For Your Firm ? Right Choices With Equipment Leasing Companies in Canada
  Canadian Sale Leaseback Financing – Part 2
  Is a Sale Leaseback of my Business Assets a Good Thing?
  The Evolution Of The Sale Leaseback Transaction In Canada . Get The Most From Your Lease Finance Company
  How To Get The Best Finance Deal When You Lease Equipment from Commercial Leasing Companies
  Is it Advisable to Consider Sale-Leaseback Financing?
  Business Equipment Leasing And Financing In Canada . When And With Whom To Lease
  12 Types of Business Financing in Canada - Which Do You Need? Commercial Loans & Cash Flow Finance
  Preparing For Financing Accounts Receivables in Canada - AR & Contract Finance Must Knows!
  Here’s 5 Immediate Solutions for working capital financing for your cash flow business needs!
  What Are The Advantages of Sale Leaseback Equipment Financing In Canada? Are There Alternatives?
  Scientifically Proven ? An Asset Lease Whether Operating Or Capital Works For Financial Bridging of Canadian Business Financing
  Leasing Financing and Equipment Financing Canada
  Are There Disadvantages To Lease Financing Assets In Canada ? Equipment Finance Pro’s And Con’s
  Is There A Hole In Your Leasing Finance Sidewalk ? Get A Canadian Lease Finance Company
  Stuck In Business Financing Traffic? Raising Sources of Funding For Loans In Canada

Article Tags: equipment finance, Equipment finance, sale and leaseback, sale leaseback financing



Related Forum Posts
Re: Website Name Help - Its good that you have come up with the idea of setting up a website for your business. Now As it is into Business Solutions, I would recommend that you also include this into the name of the website. This will help you getting better results as far as SEO is concerned. You can start building a brand with this name. As you have already got the name booked, you can try changing it to something on the lines of Business Solutions as in azimabusiness or azimabusinesssolutions. Its a long name but still is good from the SEO point.
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.
Help me name my moms business - I think Infinity Cleaning Services sounds better than Elite Cleaning Solutions... Why the Solutions? What is there to be solved? You simply get a rag with some Windex on it and wipe away.... plug the vacuum and Vac Away, get a mop and mop away. Stick to Infinity Cleaning Services... ICS sounds cool...
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.
Re: What's in a Name? - Sale or promotion relies a lot in name chosen for product/business.


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

SEO and the Entrepreneur

The Pure FUN of Learning & Using NLP

Are You My Mentor

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.