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Equipment Financing – Expert Advice for Canadian Lease Financing

Guest post by: Stan Prokop

Article Overview: Information on how to improve your success in Equipment Financing /Lease financing for Asset based acquisitions in Canada

Equipment Financing – Expert Advice for Canadian Lease Financing

Canadian business owners who are armed with some basic equipment financing knowledge can significantly increases their chances of approval, and, equally as important, ensuring the Canadian lease financing they are looking for comes with rates, terms, and general structures that are commensurate with their overall credit quality and business financing needs .

A lease and equipment financing provider has some basic needs around your initial application for financing. Some of the key areas you should focus on are detailed below.

Leasing is available for firms with all durations of 'time in business '. Although a start up firm can be financing via a lease financing solution your overall time in business can be a great factor to increase your chances of a proper approval. Equally important is the overall industry and business model you are in - as on occasion some industries are out of favor. In 2008-2009 the auto industry was clearly 'out of favor '.

Lease financing is a segment of 'asset based lending '- therefore the asset you are financing has a considerable role in determining your overall approval and pricing. Equipment that is financed generally tends to depreciate, so your lease firm will focus on the value of the equipment during the term of your lease. As an example a lessor could only reasonably expect to recover 5 or 10% of a computers value three years from now, simply because a computer and telecom equipment in general as asset classes depreciate quickly .

Equipment that is not purchase for bona fide vendors and manufacturers also on occasion can present financing challenges. Therefore if you have a choice work with repeatable dealers, wholesalers, manufacturers, etc.

Any lease firm will draw commercial credit reports on your firm and look for payment trends to suppliers - if personal guarantees are required on private small and medium sized firms quite often a net worth statement and credit bureau check will be asked form . Quite frankly these types of information and credit diligence are associated with any borrowing, whether that is a corporate credit card, a business loan application, etc. In reality lease firms in Canada probably provide the quickest overall approval times than any other type of business financing. Many lessors use automated credit scoring systems and smaller transactions fewer than 50k for example can actually be sometimes approved in a matter of minutes or hours.

Lease transactions in Canada can run into the many millions of dollars, lease financing is one of most vibrant financing initiatives in the country - so expect on larger deals that a higher level of due diligence will be performed on your firm for larger lease facilities .

Finally , leasing is all about 'structure ' so you should feel free to be creative in your lease structure request in order to maximize the particular benefits of lease financing that you are trying to achieve - they might include lower rates re your credit quality, seasonal payments, flexible end to term options etc .

In summary, business owners should learn some key leasing basics around what is required to make a lease approval successful. Being armed in this manner will ensure a more prompt approval and the overall approval you are seeking re asset type, term of lease, and flexibility at end of term. That is sensible, proactive financing. Seek the advice of a trusted and credible lease financing advisor who can assist you in maximizing benefits!

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Article Tags: acquisitions, canada, equipment financing, expert advice Canadian lease financing



Related Forum Posts
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).
grants for restaurants - Well friend I don’t have any idea about government grants for restaurants, but I will recommend that you may try on some banks who offer loans for small business where the government will have some guarantee. Beside that Restaurants business is very risky so some of banks who gave some Financing Loans they will look at on it if there is enough solid business plans.
Re: How to finance your independent movie - Hi, The video doesn't come up with its own URL... But it's the very bottom video on the page. Here's the description of it: Financing, Production and Social Impact of Feature Films Host- Carol Atwood - Founder, Spartacus Media Enterprises Panelists: Bill Johnson - Co-Founder and Partner, Inferno Distribution Steven Haft - Producer, Media Consultant Michael Goorjian - Actor, Producer, Writer
Re: What Franchisors Want From Franchisees - Thanks for the follow up Russell. I found the following tip to be especially helpful: [quote="RussellWebb":2vqd3szf]Financing arrangements will vary - if you can show that you have 20% above all of your start-up costs, this would help. The more assets you own the better.[/quote:2vqd3szf] By the way, is there a way for someone to achieve a close to "1000" credit score? I've always paid off my Visa bill and car payments on time... but I bet my credit score is not even between 800-1000. I wonder what the secret is to 1000?
Re: Kevin's Case Study #8 - How do you attract a finance expert? - I think the best way to find any reputable accountant would be by recommendation. If you cannot get one by recommendation then you should put those you narrow down your search to through an in depth prescreening process. Check the out their firm with BBB and make sure they are licensed & registered. Always check credentials and make sure they graduated from the schools they claim to have attended. Financing should be found in accordance to the type of financing you need and the type of business you are financing. You should always get prequalified before commiting to an application. You should seek out those financial institutions that specialize in the type of financing you are seeking and then check to enure they can finance your type of business.


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