Tweet

Equipment Financing Canada – One Big Mistake Not to Make

Guest post by: Stan Prokop

Article Overview: Information You need to know when looking for Financing for Used and refurbished Equipment ;

Equipment Financing Canada – One Big Mistake Not to Make

Equipment Financing - Canada has embraced this type of business financing for decades. Most Canadian business owners and financial managers know they can obtain financing for equipment, but they are often unaware of some of the hidden benefits, and, yes, pitfalls, of equipment financing. Let's explore a couple of those key issues that you need to know about.

Myth ! - Only 'new' equipment can be financed.

Nothing can be more farther from the truth. Lease financing is readily available for all types of equipment in Canada, including used and refurbished equipment. This equipment typically is bought at auctions, as well as via the internet, or in many cases from dealerships that have taken a trade in or have a machine that has come in off- lease.

The main benefit of used equipment financing typically is the price. Lets look at an example - lets say you are buying some production equipment and the price for new equipment is 300,000.00$ - Typically this type of equipment if lease financed over 4-5 years. If you were to acquire the asset as used, and lets say you got it for $ 225,000.00 (certainly not unrealistic), then you are saving that 75,000.00 - that's obvious to anyone of course. But remember that 75,000.00$, if purchased new, is a part of a 4-5 year financing so the ability to cut 75k in long term financing out of your cash flow is a very large benefit .

We would point out that in some cases, because the equipment is used, it might need to have an appraisal or a valuation attached to the financing - this would typically be obtained from a qualified third party appraiser. Typically, as in all financing costs, the borrower, or in our case, the lessee, (that's you) pays for the appraisal. So the common sense question simply becomes - if your equipment was warrantyed, guaranteed, and you felt it had long term value, would you in fact invest 1k in an appraisal to save 75k++ in financing costs . We think our clients would!

Does the type of equipment alter the pricing and structure of your equipment lease - in some cases it might, but typically not drastically. The lessor might in some cases ask for a down payment, or a larger down payment, and also might, on occasion, lower the term of the lease ( for example - 3 years , not 4 years , etc ) but overall lease financing for used equipment is still a great value . In many cases even computers are often re financed after they are returned to the vendor or reseller.

Clients often ask if there are certain types of used equipment that can't be financed. The reality is that pretty well everything can be considered for financing. Normal credit underwriting is done, focused mostly on your ability to repay the lease from cash flows generated from your company and the asset. All types of equipment should be considered, especially when you and your team have confidence in your ability to acquire, price, install and maintain the asset.

Related Articles
  Equipment Financing Specialist – Canadian Leasing Solutions
  Canadian Lease Financing - Maximizing the Benefits!
  Equipment Financing in Canada – 2010 – Optimism for your Business Financing Prospects !
  Lease Financing Canada – Canadian Asset Financing Solutions
  Equipment Leasing Canada - Your best rates, Your best Terms!
  Equipment Leasing – Canadian Financing Solutions
  Equipment Leasing Canada – Critical Deal Factors
  Equipment Capital – Financing Options you didn’t know you had
  What’s So Little About the Small Business Government Loan In Canada ! SBL Guaranteed Financing
  Save Thousands When Utilizing Lease Financing Via Equipment Lease Companies In Canada
  Business Leasing and Equipment Financing in Canada
  Lease Financing - Canada business financing
  How To Work With The Best Canadian Leasing Companies In Business Financing and Financial Services ?
  Instant Financing Access To Canadian Equipment Leasing Company Solutions !
  Equipment Financing - Capital Leasing Options That Make Sense
  Guess What Canadian Business Financing Equipment Company Has The Best Finance Lease For You ?
  3 Obvious And 1 Not So Obvious Reasons To Consider Canadian Lease Equipment Financing For A Capital Asset Loan
  Don't Let ' Good Enough' Be Acceptable In Canadian Equipment Leasing When Structuring A Business Equipment Loan or Lease
  Guaranteed Powerful Equipment Leasing Tips For Canadian Companies Financing Large and Small Assets
  Financing for Equipment – Canadian Equipment Capital Options

Article Tags: equipment financing Canada, financing for equipment



Related Forum Posts
Accessing the Canadian Market - Leo, an idea that came to mind is try to align yourself with Hispanic Organizations in Canada. This will build your credibility within communities and get more referrals. Not sure if you plan on being based in Canada or operate your business from Columbia but either way being in the web development arena allows you to work from anywhere. You can also search for opportunities originating from Canada thru elance.com, getafreelancer.com, freelance.com or rentacoder.com
Re: Quote of the Day - "The only people witho - Thanks for sharing this Evan, there are some very powerful quotes in there, I particularly like this one:- You are now at a crossroads. This is your opportunity to make the most important decision you will ever make. Forget your past. Who are you now? Who have you decided you really are now? Don't think about who you have been. Who are you now? Who have you decided to become? Make this decision consciously. Make it carefully. Make it powerfully. regards, Mal.
Re: Introducing a US franshise to a Canadian market - [quote="BuzzAroundBooks":1l00q6iy]Hi Everyone, If there was a franchise you liked and located exclusively in the U.S., how likely would you be able to introduce the first one in a new market like Canada? How open are franchisors to this sort of idea? Has anyone heard how this was done in the past?[/quote:1l00q6iy] US franchisors are really open to "export" their concept to Canada for 2 main reasons: the proximity and the culture: Canada is just a few hours away from any US city and both cultures are very similar. I am actually reading stats on this subject as I write and about 80% of american franchises tat go international go to Canada first.
Retired Executives - Hello everyone. Does anyone know where I could be in contact with retired executive? Reason I ask is because I am in seek of a mentor to assist me with my business and I am having a hard time finding a mentor in Canada. It seems like executives in the US and Europe are lot more helpful than in Canada, as I have contacted a few individuals in Canada and they have either been rude or simply did not reply back to my e-mail. Does anyone know where I can find some retired executives, as I might have a better luck with them? Thanks!
Import Hairdryer to Canada - Hi I want to import hairdryer from Italy to Canada. I am looking for information about it because I don’t know what exactly I have to do to import this product to Canada. What do I need to do to import this product to Canada?


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

Coaching Tip: Identify Your Core Values

Are You Listening?

What is Give Back Marketing?

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.