One of favorite U.S. Business equipment leasing publications recently published a ‘ TOP TEN ‘advantages of leasing finance. But hey, isn’t this Canada? So we thought we’d address those top ten advantages in terms of the Canadian perspective of commercial leasing companies that provide Canadian owners and business financial managers with hundreds of millions of dollars in asset finance.
So let’s try and ‘ Canadianize ‘ those advantages in terms of business leasing in Canada. Here we go.
#1 – Cash – You’d prefer to keep it, but unfortunately you need to spend in on new or upgraded assets to your business. And that includes everything from plant assets to new computing power. Utilizing lease financing lowers your cash outflow and often lowers the requirement that other lenders such a as a bank might demand for you with respect to additional equity in the transaction.
# 2- Cash flow management – Many Canadian business owners and managers don’t often realize the flexibility they have in structuring a transaction with respect to the tax aspects of the lease, as well as your ability to structure seasonal, quarterly, or some other form of payment structure that makes sense for… you guessed it, your firm.
# 3 Your ability to decrease financing costs with commercial equipment leasing allows you to utilize those savings for other things – a good example is your potential new found ability to take discounts on vendor payments to your valued suppliers . Using cash to take 2%10 type discounts could save you thousands of dollars every year, depending on the size of course of your company .
4. Our U.S. example that we are referring to listed ‘bank hassles’ as another great reason to consider lease asset financing. We’re certainly not sure that going to a Canadian bank is really a ‘ hassle ‘ but we are the first to admit that many of our clients can meet stricter bank credit covenants and criteria – As a result Canadian business owners and their financial managers find that there are hundreds of aggressive lease finance firms who actively solicit their asset financing business – And that’s a good thing!
#5 – Leasing productive assets improves productivity and can assist in lowering general overhead costs. Although technology investments in plant, rolling stock, software (yes, software can be fully financed!) and computing can be huge competitive drivers in your business.
# 6 – Leasing epitomizes your ability to upgrade and be flexible and acquiring assets. Using such strategies as an operating lease allows you the benefit to return, upgrade, and purchase or extend key assets in your business.
#7 – Debt may be expensive, but anyone will tell you equity is even more expensive. Leasing assets can often help you avoid equity dilution in considerations such as bring in other ownership capital or partners in the business?
#8 We’ve observed that many small and medium sized businesses finance their businesses in part by business credit cards and small lines of credit. Utilizing asset lease finance allows you to keep those arrangements intact and current.
#9 There are a number of significant depreciation and tax benefits that Canadian accounting allows when you consider business equipment leasing companies for your commercial asset needs.
# 10 – It works – most of our clients have determined that their bank won’t lease the assets they need to run and grow their business. It’s easier to apply for and in many cases vendors and distributors offer preferred financing for customer choosing to utilize commercial lease strategies.
So there you have it, our Canadian TOP TEN ADVANTAGES of equipment leasing in Canada, with due respect to our U.S. counterparts. Want to maximize on any or all of these advantages? Speak to a trusted, credible an experienced Canadian business financing advisor who can help you with commercial lease financing.