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The Magnificent 7 Reasons For Equipment Lease Finance- Make Canadian Asset Finance & Leasing Work !

Guest post by: Stan Prokop

Article Overview: Information on equipment lease finance in Canada . 7 compelling reasons to consider the leasing and financing of assets for Canadian asset finance and acquisition .

The Magnificent 7 Reasons For Equipment Lease Finance- Make Canadian Asset Finance & Leasing Work !

Recently we wrote on the subject of providing 3 great reasons for Canadian companies to strongly consider equipment lease finance as their financing strategy in the acquisition of new equipment. Financing assets has never been more easy.



The essence of those three reasons we discussed were the concept of 100% financing of assets, utilizing leasing and financing as an inflation hedge, and finally the ability to get a better handle on the useful economic life of any asset you acquire. How? By matching the term of your lease with cash outflows of lease finance.



But... guess what. There's more. Let's discuss 7 other solid real world considerations for Canadian business owners and financial managers considering equipment lease finance.



Timing. Many lessees (that’s you) have important deadlines, vendor issues, competitive issues, etc. Unlike banks or other finance firms leasing companies in Canada are only focused on one thing - funding your transaction. So whether it’s a 900 $ micro ticket deal, or a 9 Million dollar piece of mining equipment you will always get it done faster (we believe) by working with an independent specialized lessor. This impacts time you may waste on legals, documentation, and credit approval, all of which are important to clients.



Additional add ons - that’s reason number 2 today. It makes sense in business to bundle (don’t our tacos and cable companies do a good job of that. In a leasing and financing transaction you can add in a lot of extras, for financial and convenience issues and benefits. I.E. maintenance, insurance, delivery, training, etc.



Reason # 3- The accountant in the corner... you know who we're talking about, the guy with the proverbial ' budget '. Leasing eliminates capital budget issues, operating versus capital issues, and cash flow challenges. Could leasing have made that guy any happier? We don’t think so!



Reason # 4- lender restrictions and covenants. Utilize creative financing providing by such vehicles as operating leasing and financing to eliminate covenant, off balance sheet, and ratio issues. It's a complex world in commercial lending, but a solid lease financing partner can help you work through a lot of issues that otherwise could restrict your ability to properly acquire the financial assets you need.



A lot of accounting rules are changing out there... some people predict the death of operating leases. We're not sure, but we are sure that lease accounting is one more thing in your finance toolkit that gives you something to work with.



Reason # 5- the proverbial monthly payment. Want it fixed, or perhaps variable. Want some cash flow seasonality in your lease structure..? No problem. Step up? Step Down? Step leases are payment structures that alternative according to seasonality, budgets, etc. If you need them, they are there!



Reason # 6- Working capital considerations. Your ability to achieve significant financing via leasing allows you to preserve credit lines and cash flow. You can spend all the time you want on lease versus buy analysis - but at the end of the day cash is king as Canadian business owners and financial mangers well know.



And finally, reason # 7 of our magnificent 7! Flexibility and asset obsolescence management. The right type of lease financing allows you all sorts of flexibility re rights of return, termination, upgrade, purchase of the asset, etc. Investigate them, use them.

Speak to a trusted, credible and experienced Canadian business financing advisor on how the reasons to utilize lease finance for asset finance can work for your firm .

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Article Tags: equipment lease finance, financing, leasing



Related Forum Posts
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.
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.
Which kind of industries are you interested in? - Ecological or E-business or Investment or Finance or Management or Non-Profit or Retailer or others.
Re: Finance is the primary requirement of business - Finance is important, but I feel there are so many other factors that are just as important if not more. You can have all the money in the world to run a business, but if you can't produce results your business is better off closing the doors.
$1,000,000 - Hi Evan, Are you talking about US Dollars? If so, that would be approx £500,000 in the UK. The Canadian Dollars differs also from the Australian Dollar. In any case, one needs to solve problems to help people to get money. The more solutions are given to people's needs to solve their problems, the closer one gets. Finally, are we talking about 'Income' or can we talk about 'Asset'? Kindest Regards Beat "Unlock People's Potentials!"


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