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Sasquatch ? UFO’s ? Great Asset finance and Equipment leasing Companies in Ontario ? – Myth or Reality ?

Guest post by: Stan Prokop

Article Overview: Take Advantage of equipment lease financing Stratgies today! Information on why asset finance and equipment leasing companies in Ontario offer a great alternative to purchasing business assets. Key advantages of business equipment finance for Canadian business owners and financial managers in Ontario and rest of Canada.

Sasquatch ? UFO’s ? Great Asset finance and Equipment leasing Companies in Ontario ? – Myth or Reality ?

We'll go with reality with respect to great asset finance and equipment leasing options in Ontario. With the economy generally improving leasing continues to be a popular and successful method of acquiring the use of assets for your business. And the reality is that this method of asset financing has been in place for hundreds, some say thousands of years, so there is a lot to be said for a proven formula.

There are several key factors that drive the reality success of equipment financing in Canada - they revolve around tax benefits, conservation of capital, and quite simply a solid alternative to ownership. As a Canadian business owner or financial manager you want alternatives to ownership of assets that more often than not depreciate in value. That clearly is the chief advantage of the great asset finance and equipment leasing availability in Ontario.

At the end of the day it’s simply an alternative to ownership, while at the same time you are able to reap all the benefits of the assets without having had the need to put significant capital outlay at the outset. That’s a great option and business financing strategy. There is an age old saying in the lease financing industry which is that you benefit through use, not ownership.

And that additional cash flow allows you to invest in other resources and assets to make your business more profitable and competitive.

Obsolescence is always a concern for business owners who with to acquire new assets, whether they be for production in the plant or technology and computers in the back office. Leasing allows you to battle head on with the obscelescence factor given that you don’t want to outlay significant amounts of capital into assets that might have limited long term use. We continually advise clients to think of their computer needs and purchases in the past, and the constant need to upgrade technology while addressing your current and future needs. Can you even imagine in today’s times owning a computer for 3 to 5 years, it’s very doubtful!

Cash flow and buying power are often quoted in connection with great asset finance and equipment leasing strategies. The reality is that you can buy more if you have a financial strategy in place. Let's look at a simple example - and we will use our old friend computing technology as our poster boy for the example.

Lets say you need a new computer system for 250,000$ and the reality is that an alternate vendor has a better solution for 350,000$. If you were purchasing you have to wrestle down two key issues, laying out 250k , or alternatively coming up with an additional 100k of real cash to complete the second alternative purchase . The monthly lease payment on a 250k 3 year lease would be approx 7700 dollars, and on a 350k deal it would be approx 10 600 dollars . So as a business owner which solution do you want to wrestle with - paying either 250k or 350k out of working capital, or working an additional 3k into your operating budget?

Want to see some real magic? You could actually acquire the 350k system under an operating lease and bring that payment very close to the 250k system, but that’s a technical subject for discussion on another day.

So whats out bottom line, you are welcome to hop on the leasing industry train and take advantage of some great rates, terms, and structures via one of the most comprehensive and flexible asset finance strategies available to business.

So, Sasquatch, Ufo's? We're not sure, but Speak to a trusted, credible and experienced equipment leasing advisor who will help you maximize the benefits of this Canadian business financing proven strategy.

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Article Tags: asset finance, equipment finance, equipment leasing companies, equipment leasing Ontario



Related Forum Posts
Equipment leasing - Equipment leasing has many benefits, such as tax benefits, conserving money and always having up to date equipment to stay competative to name a few. Obviously, it's partially dependent upon what type of business you have as to whether you will benefit more than someone else but... Do you think it's worth leasing your equipment rather than purchasing it? Can you think of any other reasons you can benefit from it or any reasons this is not a good idea?
Collateral security required - You will have to use your home and anything else you own for collateral on a business loan. The SBA will require you have at least 2 years in the same industry as the business you want to open. Banks will want more money down (30%) and real property as collateral, and will probably charge higher rates and require a 5 year baloon. More and more credit unions are getting into commercial lending and tend to be a little more friendly than banks. Non-bank lenders can offer a nice alternative. They typically require less money down (10% in many cases), rates are usually variable (tied to prime like 2 to 3% above), are more willing to accept equipment as collateral, but expect a shorter term as a trade off for the risk (ie. 5 to 7 year term). This can make it difficult for some to afford the loan payment. Yet another option is a leasing company. There are many leasing companies that will finance franchise purchases and expansions by writing the whole thing up as an equipment lease. (200K) is not out of the question. They might require 10% down, but as long as they have a first position on all the business assets they are quite willing to set you up with a lease. The downside is that your cost of financing (the leasing co. won't call it interest) will be higher than any type of loan. When figuring you cost remember that many states require you to pay sales tax on the amount of your monthly lease payment. Also consider the buy out terms at the end of the lease period. You'll want to stay away from market value buy outs. Go for the $1 buy out. If you have enough equity in your home, you might be better off taking out a home equity loan and using that to finance your business.
Who's best for first time commercial loan? - You will have to use your home and anything else you own for collateral on a business loan. The SBA will require you have at least 2 years in the same industry as the business you want to open. Banks will want more money down (30%) and real property as collateral, and will probably charge higher rates and require a 5 year balloon. More and more credit unions are getting into commercial lending and tend to be a little more friendly than banks. Non-bank lenders can offer a nice alternative. They typically require less money down (10% in many cases), rates are usually variable (tied to prime like 2 to 3% above), are more willing to accept equipment as collateral, but expect a shorter term as a trade off for the risk (i.e. 5 to 7 year term). This can make it difficult for some to afford the loan payment. Yet another option is a leasing company. There are many leasing companies that will finance franchise purchases and expansions by writing the whole thing up as an equipment lease. (200K) Is not out of the question. They might require 10% down, but as long as they have a first position on all the business assets they are quite willing to set you up with a lease. The downside is that your cost of financing (the leasing co. won't call it interest) will be higher than any type of loan. When figuring you cost remember that many states require you to pay sales tax on the amount of your monthly lease payment. Also consider the buy out terms at the end of the lease period. You'll want to stay away from market value buyouts. Go for the $1 buy out. If you have enough equity in your home, you might be better off taking out a home equity loan and using that to finance your business. I hope this helps.
Profiling Famous Women Entrepreneurs - Great suggestion Leanne! The PROFIT Companies are always great sources!
Re: Will North America make carbon taxes anytime soon? - Well I recently started to work at a solar company in Ontario, and business is booming. The Ontario government is doing a great deal since passing the Green Energy Act. This is where the government is buy the energy you produce. 80 cents for kwh. A lot of people in Ontario are putting up solar panels on their roofs, and feeding back the grid green energy.


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