5 Things You Need To Know About Equipment Financing In Canada – Why the Old Rules Dont Apply In Heavy Machinery Loans

Are the ‘ old ways’ in business always the best ways? We’re not always sure about that – let’s examine 5 key areas you need to focus on when arranging equipment financing for heavy machinery loans and leases in Canada in our current economic environment.

When we speak to clients whats the one thing they are always looking for in lease finance for the financing of heavy machinery and other types of assets from business equipment, computers, and plant assets. You guessed it. Approval! Let’s drill down on 5 needs to know areas of lease financing in Canada.

In equpment financing its all about approval, our # 1 topic today. Although lease financing is on a tremendous roll in the 2011 Canadian economic environment its safe to say getting approved for the asset financing you need, within rates and terms and structures you feel you deserve is .. Well… let’s say, still a challenge! If you have solid financials and a strong history of cash flow and repayment to a lessor you naturally will have not a large problem.

But what if all of the ‘ credit boxes ‘ the lessor puts you in don’t quite match up. The good news is that lease and equpment financing in Canada for heavy machinery loans is often a ‘ story credit’ situation. That might mean you can expect a higher rate inherent in the lease, and the good news is that heavy machinery type assets have significant asset and residual value which will help with a structured approval. That approval might include outside collateral, a shorter term, etc. Bottom line, there is a ‘ credit box ‘ for every type of asset and business credit quality in Canada.

Point # 2 today – you’ve go choices. It’s not always about price. Focus instead on the many other parts of the equipment financing decision such as where you will get the fastest approval. The hundreds of lessors in Canada that will provide you with financing are most focused on firms with whom they can build a longer term relationship.

Point # 3 today – Do you consider yourself the best lease equipment financing specialist in Canada. Someone who knows all the players understands current rates and structures, and who knows the inn’s and outs of lease finance lingo? It’s rare that any Canadian business owner or financial manager can feel 100% comfortable in knowing he or she has made the best financing decision for the asset they are acquiring. The solution – Consider help and assistance from an experienced Canadian business leasing and financing advisor. That help should be free and the cost of your financing might go down significantly when you have expert assistance in negotiating terms, rates, and types of equipment financing leases and loans that make sense for your firm.

Point # 4 today – Simply put the devils in the details! In small and medium sized transactions in Canada there isn’t a lot you need to know about standard documentation. However in larger ticket heavy machinery loans pay particular attention to types of leases you enter into, final pricing, and documents that make sense around your obligations, and rights in your transaction.

Item # 5 – In Canada your primary two choices for lease equpment financing are full payout lease to own transactions, known as capital leases, and the more complex operating transaction. Operating leases can have a significantly lower cost, but you need to understand end of term issues around extending, buying, upgrading, or returning the asset you have financed. Again, here is where some expert assistance comes in very, very handily.

In Canada there is solid competition for your lease finance business when you’re acquiring heavy machinery loans and leases. Take time to understand the players, maximize the benefits, and above all seek the help of an Canadian business financing advisor who is expert in Canadian lease finance to assist you to arrange the best leases for your firm.