When the Canadian business owner or financial manager maximizes the benefits of utilizing an asset finance company for their capital asset needs it clearly is a win. Here are some proven tips, steps and issues to consider and follow when dealing with leasing companies in Canada.

Point # 1 – While almost any asset, including some intangibles such as computer software can be financed it’s important to have a solid handle on being able to identify the manufacturer of the asset to your leasing company. You can waste a lot of time in finding out that in some cases the firm you are leasing from does not have an appetite for a particular industry .

Point # 2- The leasing rate and monthly payment are key drivers in your final monthly payment calculation. Providing a concise estimate of the actual cost of the asset helps the process move along in a much better fashion. That can often be achieved by simply providing a quote to your lessor.

Point # 3- You want to be able to be in a position to identify when payment must be made to your manufacturer or vendor. In certain cases there might be a staggered payment scenario. That situation will also be reflected in your monthly payment. If you have a legitimate vendor or manufacturer they typically can be paid even if they are outside of Canada, provided you and your leasing company agree on the terms and timing of the payment. Remember also that the majority of leases in Canada have what is known as a ‘ hell or high water’ clause which simply stipulates that you are responsible for paying back, via your monthly payments, any amount that has been advanced to your vendors or mfr’s.

Point # 4 – Delivery and acceptance are key aspects of any equipment financing lease in Canada. In certain cases if the delivery date is outside of a normal period of time your lease rate may need to be adjusted. Many Canadian business people don’t’ understand leasing companies in Canada borrow and lock in funds also! As a result the timing of cash outlays is reflected in their profits. Oh and by the way, interest rates go down as well as up, as they certainly have over the last several years. So you should have a clear understanding that you have a right to request the lease rate be lowered downward if in fact general market rates have fallen. It’s a two way street, right?

Point # 5- Many Canadian lessees assume that the asset finance company is not necessarily concerned about the location of the assets they are financing. That’s wrong, in that it’s critical for the lessor to understand where your financed assets are located – they might be at head office, a branch, or even a job site of sorts. You also don’t want to move the assets during the term of the lease without proper notification to the asset finance firm/lessor.

Ensuring you address our 5 points will help you in a number of ways; they will streamline your overall approval and funding process, and further enhance your longer term relationship with the right leasing companies you have chosen to work with.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in ensuring successful lease finance transactions while eliminating the risk of things going wrong.