Is your company getting the most from an asset and capital leasing company in Canada? Let’s examine how your firm can maximize some really creative benefits from lease finance companies in the Canadian marketplace.

Equipment finance doesn’t have to be a ‘ complex ‘ form of business financing if you’re aware of the some key concepts, some of which are perhaps a bit more sophisticated than others… but bottom line you should never lose out on the advantages simply because you weren’t aware.

There are numerous nuances in lease finance – they revolve around the areas of legal, financial, tax and accounting. Exploiting some of these areas to your firms advantages bring you maximum creativity.

It’s safe to say that we are maintaining that you have to be involved and consider every aspect of the lease transaction – as benefits and creativity come at all stages, i.e. evaluation structuring, credit approval, documentation, and end of term.

Just simply by working with the right asset capital leasing company can save you time and money. Did you know many transactions today that are a smaller dollar limit can be approved within 24 hours, and often don’t require even full financial statement disclosure?

If you know the general makeup of lease finance companies in Canada you’re in a position to maximize your overall cost. In Canada the marketplace is broken down into small, mid and large ticket lessor. When you understand the ‘ credit box’… i.e. the financial criteria required for approval, you can save thousands of dollars on lease pricing.

We’re often asked who has the lowest rates in Canada. In general we can say that Canadian chartered bank lease subsidiaries and divisions offer the best pricing, typically 200 basis points or less over bank cost of funds.

Another great alternative for Canadian lessees is to work with a captive finance firm. Although they are also highly competitive in price also there’s an extra creative advantage to utilizing a captive firm. Simply speaking, they are incented to make the sale and provide credit approval, if only because they are supporting the parent companies sales activities.

Did you also know that many captive firms for hardware and equipment will also consider financing a competitive product – there are various reasons they do that, but suffice to say you’re the winner on that one?

Lease finance companies in Canada also provide you with a very creative hedge against obsolescence. Also, numerous ways of achieving end of term loss minimizations are available to the Canadian business owner.

We think many firms probably don’t utilize the creativity embedded into operating leases in Canada. Although international accounting changes minimize some of the benefits of this off balance sheet strategy there are great reasons still to consider a FMV lease ( fair market value ) particularly when you are financing technology or large ticket capital equipment .

If your firm is somewhat ham strung on financial performance, rations, covenants, etc lease finance companies are the ultimate solution for capital and cash flow preservation.

Lease structures are virtually unlimited in Canada, and identifying what’s important to your firm will allow you to structure term, payments, end of lease obligations, etc… and on it goes.

Speak to a trusted, credible and experienced Canadian business financing advisor. Get creative when it comes to using lease finance companies in the Canadian marketplace.