Leasing Company Challenges ? 5 Simple Facts That Affect Your Equipment Finance Lease Success.

Leasing company challenges. There are some real basics you can cover off to ensure you're saving money, time, and most importantly, helping to guarantee you have a great deal on asset acquisitions in Canada . Let's dig in.

What we're talking about is simply understanding your rights and obligations in the type of lease structure you seek, and ensuring the paperwork and terms around the transaction meet your needs.

Naturally there are all types of lease sizes, you might be leasing a laptop or photocopier for the office, you might be investing in computer and telecom infrastructure, or at the high end of the scale it might be that corporate jet. Well we can dream can't we..?

First of all it’s important to understand the term and actual start date of your payments. Term, i.e. the actual amortization of your lease is important because it requires thought relative to the actual useful life of the asset. In certain cases you might be acquiring assets or part of the asset with the actual lease payment not starting yet. Make no mistake though, there is no free lunch in lease financing, so interest is accruing on your transaction.

Our second point is that you have a of choices in lease payment timing - you can request monthly, quarterly or in some cases annual lease payments depending on the size and quality of your overall transaction .

Our third point - simply to ensure you have the proper insurance on the asset being financed. In almost all cases anyway you will be asked by the lessor to provide a certificate of insurance. We should point out also that certain assets require they be proper maintained. While as a prudent and responsible business owner you want to do that anyway, suffice to say your lessor feels the same way.

Fourth point - understand where your assets are located, whether they be at a head office, a branch office, or in the field, so to speak. You will want to advise your lessor of any change in location of the asset. It's simply the right thing to do. Larger assets may in fact need to be inspected by your lender at certain points during the lease term.

Fifth point - Choices ! Don't forget that in Canada you have the option of picking a lease to own or a lease to use transaction. That is called capital and operating leases respectively. Tech type assets are perfect for operating leases because they give you the right to return, upgrade, extend or purchase assets depending on their obsolescence - which is one of the key points in asset finance - your ability to manage the economics and cash outflows.

What's our key point today ?Simply that for a multi million dollar transaction you might well want to have your lawyer look over documents and terms , but the reality is that the knowledgeable business owner has the ability to manage certain issues within an asset finance transaction that can save you thousands in time, dollars, and oh yes grief!

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in proper ' habits' in addressing a finance transaction.

Stan Prokop


Stan Prokop is the founder of 7 Park Avenue Financial . The firm specializes in business financing for Canadian companies     in the areas of working capital , asset based lending, SR & ED tax credit financing, equipment financing,  franchise financing and banking .


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