Yes, in the case of Finance Leases in Canada resistance might be in fact futile, but unlike the movies where this term seems quite ominous it’s a fact that equipment loans and lease financing in Canada is in fact a valuable resource to Canadian business.

While many Canadian business owners and financial managers might view this form of finance as complex it sure doesnt have to be. Do you have to be an expert or have access to an expert to achieve the benefits of leasing? Yes, it sure helps, but it’s certainly not required. Your business needs to simply know all the advantages that come with this form of financing, and when you don’t understand which advantages relate directly to your situation it’s difficult to benefit from the right decision.

Over the years we met hundreds of companies / business owners/managers who actually employ a lease strategy for equipment needs and probably overlook a lot of other positive aspects of this method of asset acquisition simply because they were uninformed, or misinformed .

What could be the reason for ignoring finance leases? One of them simply might be that from the outside it looks a bit overwhelming. Why? Because the decision to finance assets has a blend of legal documentation, financing and accounting inputs, as well as general common business sense!

Are we able to set out some sort of basic roadmap when it comes to this well used (80% of all business lease assets) Canadian business financing strategy? We think it’s possible.

First of all you have to know the general lessor market in Canada. Who are the players, and which ones should you focus on for your specific needs. In truth the market is quite segmented – there are larger Canadian and U.S. corporations doing business in Canada … Canadian banks also participate, and then there are tens of independent commercial finance firms. These firms focus on different asset categories, and yes, even deal sizes. This is clearly a time when it sure helps to have an expert guiding you through the above maze.

Clients we talk to are, unfortunately focused on the implicit cost of the lease, in layman’s language this equates to ‘ What’s my rate?”.

Documentation and addressing the previously mentioned tax and accounting issues in a lease are also critical to success and benefits achieved. Simply speaking, just choosing the right type of lease and lease structure, as well as whom to deal with can save you many thousands of dollars. We can’t count the times a client has asked us to help them get out of lease transaction ( you basically can’t) , or to help them in addressing a risk or cost issue associated with the wrong type of lease transaction they entered into . Knowing how your lease company profits (everyone is entitled to a reasonable profit for risk/reward, right?) alone allows you to better address those finance needs.

So, yes, according to our buddy DARTH VADER in Star Wars, resistance might be futile, but the better plan of action is to embrace lease financing in Canada with a positive attitude toward achieving the best benefits and lowest risk based on your firms needs. Extra help? Speak to a trusted, credible and experienced Canadian business financing advisor who can ensure you’re a ‘ deal maker ‘ when it comes to asset finance.