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How can my Canadian Company Sell or Remarket Equipment that was on an Equipment Lease and is no longer needed? – PART 2

Guest post by: Stan Prokop

Article Overview: The article focuses on issues and suggestions for Canadian business owners and financial managers in disposing of assets coming off lease after a typcial three to five year lease term

How can my Canadian Company Sell or Remarket Equipment that was on an Equipment Lease and is no longer needed? – PART 2

In a previous article we talked about the challenge that Canadian business owners and financial managers face in disposing of assets when they have come off lease after a term of typically three to five years. In that article we talked about pricing and the general guidelines the industry uses for obtaining the different types of appraisals, with a focus on maximizing value of the asset.

There are other strategies that you can employ to maximize the sale and disposition of assets that you no longer require, or that you will be replacing with upgraded equipment or technology.

For instance, in many industries there are sales publications listing the actual price of previous sales of this equipment both in the commercial and private marketplace. In general this data comes from North American auction sites, so Canadian business owners should also try and determine any currency issues and general market conditions that might be different in Canada.

Naturally if your company has time on its side you can list the asset for sale in a variety of publications, including of course the number one publication in the world, THE INTERNET!!

Naturally, whether it is technology or plant equipment or the many other types of assets you want to focus any advertisement in the right area, publication, website, etc.

It certainly would not hurt to talk to reputable dealers and wholesalers about the current state of the market in your asset type. Legitimate dealers who are trying to forge long term relationships with potential customers will usually glad share current market conditions about the ' aftermarket ' in their products . (Naturally they prefer to make a new sale also!). We should point out that in a huge number of scenarios your firm should potentially be able to negotiate a 'trade in 'for a new replacement asset - This could nicely offset the requirement for a down payment also when considering a new purchase or additional financing of that new asset.

We would further add that when looking at pricing on used leased assets it is important to understand the terms wholesale and retail! We all know the difference there! We would further add as a point of caution that we re emphasize the fact the manufacturers and dealers in general are motivated to sell new product, not take back old, so it's a fine negotiation line on assets that are being reviewed for price, value, ultimate disposition, etc.

Your off lease asset is of course ' used ' - as such there is in general, in a large number of industries a used dealer marketplace . This is clearly one of the best sources of remarketing and information for you is off lease asset.

Your off lease asset of course has an official value; we had spoken previously in our other article about types of appraisals. You should engage the services of a well known and respected appraiser for your asset type.

Other final factors for you to consider are of course overall market demand, and refurbish costs, and perhaps just a final decision, if necessary, to scrap the asset. Potentially some of the parts could be sold to use dealers - think construction equipment, trucks, etc.

We hope we have supplied a broad overview of some strategies and issue for consideration in the disposition of your leased asset. Maximizing value will assist your firm in future growth and also help you in consideration of your next equipment lease asset financing in Canada

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Article Tags: canadian business, Canadian equipment lease financing, lease term, remarket



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