Safe to say that Canadian business owners and financial managers have enough to worry about these days, so asset finance via lease financing for capital acquisition of equipment, hardware, software, etc shouldn’t be one of them!
The benefits of lease finance have been pretty clear to Canadian businesses for many years. And when we say ‘ Canadian busines’ that means in the case of capital leasing strategies every size of business in Canada, from start up to major corporation.
The industry in Canada has tended to segment itself into 3 size categories, simply speaking small, medium and large ticket transactions. In Canada billions of dollars of capital has been invested into the industry and those funds are used to finance your equipment needs- everything from hard assets and the soft costs that are associated with them, up to and including software, cloud computing, well, you name it!
There is always an ongoing debate as to the cost of lease financing versus buying an asset outright with your own funds, versus leasing it. It’s the proverbial ‘ lease vs. buy’ that many of us are faced with even in our personal finances when we decide to buy a new car, etc. Depending on the variables in the lease vs. buy template we suppose that in certain occasions leasing might be more expensive. But whets the alternative when you think about it, because that involves using a large amount of your business cash or operating line of credit, or applying at the bank for a term loan and not getting approved.
When we speak to clients about capital leasing its loud and clear that they utilize this time worn asset finance strategy simply because it’s easily obtained. It’s as simple as that. In reality a large part of the industry, certainly in the small ticker area – i.e. 1-50k operates only on an application only basis, no financial stats required. Naturally in larger transactions you do need a solid application that includes historical and interim financials, info on the owners, etc.
When you are looking to achieve a solid rate, term and structure around your asset finance transaction it’s important to receive a quote that is clear. We are not impressed by some in the industry that tend to use a smoke and mirrors strategy around getting your busines, as the industry in Canada is quite ‘ hot’ and ultra competitive these days. In reality there’s only 5 key elements to your transaction – term of the lease, rate, payment, end of lease obligation and value of your transaction. So understand them and make sure it’s an ‘apples to apples ‘ comparison. Utilizing the services of an experienced lease financier in Canada can often save you thousands of dollars and speed approval.
So if for any reason bank financing is ‘ elusive’, and you wish to preserve valuable cash flow speak to a trusted and credible and experienced Canadian busines financing advisor who can assist you in maximizing asset acquisition needs in Canada. 80% of all businesses lease finance, so welcome aboard!