Why Canadian Lease Finance Is ‘ Business Appropriate ‘ – Use Equipment Leasing Companies To Acquire Your Business Assets

Canadian business owners and financial managers constantly search for the right type of financing for their business. Lease finance, the core business of equipment leasing companies in Canada can be a powerful tool in acquiring business assets and managing your capital.

Leasing is often confused with a loan , it is of course ' not ' a loan but a process in which your lease firm partner buys for you, and owns the equipment , ' leasing ' it back to you at a pre agreed upon rate, i.e. the monthly payment on which clients are so fixated!

The ability for you to both understand, and , yes, manage that whole process makes the difference in how some of the powerful advantages of lease finance accrue towards your firm, not the leasing company . (Naturally we respect the right of equipment leasing companies to earn a reasonable profit - we just want to keep it reasonable!)

So why, and perhaps ' when ' is equipment financing appropriate for your company. The good news is that whether your firm is a pre revenue start up, or a Financial Post top 100 firm equipment finance is a powerful strategy. its one area of business where size doesn't count ! .. Every type of firm benefits.

Hundreds of millions of dollars of business equipment assets are leased each year. Lease decisions are made on a variety of criteria - in the case of a smaller firm the personal credit worthiness of the owner is often a key factor. In the case of a larger firm historical and future sustainable cash flow are analyzed.

Most Canadian business owners often confuse, for lack of a better word, leasing companies with banks. Some of the Canadian chartered banks do have full fledged lease finance divisions - credit criteria and deal size (i.e. large!) are all a part of bank leasing. However, the hundreds of firms that are independent and focus solely on equipment financing in general or specialized market niches are very aggressive and want your business.

Time and time again independent finance firms can approve your deal faster, and be more flexible with structuring criteria attuned to your business model and its challenges - example : seasonal cash flow, special assets, etc .

Equipment lease finance is ' business appropriate ' because it is a total solution form of financing. It will often include a lot of what the industry calls the ' soft costs' in an asset acquisition - i.e. installation warranty, delivery, training, etc.

Yes when the accountants attack a lease versus buy schedule it may often seem that equpment leasing companies are a more ' expensive ' solution, but the ability to diversify your credit lenders , achieve prompt and 100% financing, and conserve capital via creative payment structuring is in our opinion a small price to pay for a cheaper bank type term loan . And don't forget, whether its 5k, or 5000k lease finance accommodates any acquisition.

So in summary, is lease finance ' business appropriate ' for your firm - we think we've shown it is. Confused about your next steps - talk to an independent Canadian business financing advisor who has credibility and experience. Maximize the benefits of equipment leasing with one thing in mind, your firms success.


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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