Equipment Financing Specialist – Canadian Leasing Solutions

Equipment Financing in Canada is a specialized type of financing. Lease financing on its own goes back hundreds of years and is a widely accepted financing tool. Major companies in Canada utilize lease financing, why shouldn’t your firm.

Lease financing covers all sorts of equipment – that includes production equipment, transportation equipment, machine tools, computers, etc. In general most Canadian banks do not offer lease financing, although two of the Chartered banks have dedicated lease operations but require a very high quality credit quality.

You should consider leasing because it’s a simple to arrange financing agreement between yourself, your vender of the equipment, and the lessor. Leasing should not be considered complicated, however Canadian leasing practices and the parties that participate are much different than in the U.S…. It benefits Canadian business owners and financial managers to ensure they understand why leasing is so popular.

Two basic types of leases are available for the Canadian business owner – they are capital and operating leases. Operating leases are often promoted by manufacturers or vendors and they often include maintenance and insurance. You should consult with an Equipment financing specialist to ensure an operating lease is right for your firm. The essence of an operating lease is that your intent is to use the equipment, but not to own it. When you enter into an operating lease ensure that you have no intention of owning the equipment at the end of term. In this case your payments will be much lower than if your intention is ownership, and you will have the benefit of some balance sheet improvement, as this lease is not shown as debt on your balance sheet. The alternative lease is a capital, or financial lease, which denotes ownership.

We can’t over emphasize the need to work with a trusted, experienced and credible advisor in this specialized area of financing in Canada. Seek out a professional that will assist you in acquiring the equipment you need and answer any questions you have about the proper rate, term and structure that your firm deserves based on overall credit and asset quality. Equipment can be new or used, and a good lease financing specialize will be pleased to assist you in maximizing the benefits of lease financing, which include:

- Better use of working capital
- Often cheaper than a term loan
- Wont restrict your current banking arrangements
- Payment flexibility
- Fixed rate financing in today’s low interest rate environment.

Specialists in any industry are a benefit. Consult a lease financing specialist for your asset acquisition needs.

Franchise Finance in Canada – Financing Your Canadian Business Purchase

Franchise Finance in Canada calls for both you as the owner, as well a lender, to, on a combined basis, complete the financing you need for a franchise acquisition. In Canada you could of course be acquiring a new turn key franchise from a U.S. or Canadian franchisor, or in many cases also considering the purchase of an existing franchise.

Several key questions are always table by our clients – inevitably they are:

-How much do I have to put into the business as my own investment?

-Where do the other funds come from?

And, oh yes, how long does the process take!

We always encourage clients to start thinking of financing very early in the process. A great place to start is often, guess who? Your franchisor! That is simply because if they have a multi unit system already in place they usually have a strong indication of how these franchises were financed. Information you obtain from the franchisor or other existing franchisees is invaluable, as the franchise financing journey is a puzzle to many.We also are quick to add that you should never expect financing assistance from a franchisor in the form of loans, etc – The franchisor grows their business from selling you franchises, not loaning you money.

In the U.S. the majority of franchises are financed via the SBA, which stands for Small Business Administration. This is a government sponsored / funded loan, and Canada has a similar program that is commonly known by several different names – they are SBL, CSBFL, and BIL. All of these are acronyms for the same program.

You should most certainly incorporate your business to both gain access to business credit as well as limit personal liability. Personal liability under the Canadian version of the program is limited to only 25% – that’s a great deal for the business owner, as it of course limits your risk.

Most franchises in Canada are financed via this program. Sounds good so far right. We simply point out to clients that achieving success in this financing program is simply a case of:

- ensuring you understand the basics of the program – i.e. what it does not do

- complying with the information required by the program

When planning your franchise financing focus on what amount you can contribute personally to the business, and also understanding the components of financing you need. What are those components? They are:

- Soft costs ( example – franchisee fees, pre paid rent, etc )

- Equipment

- Leaseholds ( if required )

- Working capital

We can’t over emphasize the need to work with an experienced and credible business financing advisor who preferably has a track record of franchise financing success. A thorough business plan, the right advice, and understanding you’re financing needs – all are critical elements to franchise financing success!

Get a Stable Job in the Field of Finance

Finance is basically the art of selling money. It requires some skill and experience, but is quite easy once you get the hang of it. The field of finance can be incredibly competitive but it offers anyone a stable job once they get into it. Last year we experienced a global economic slow down which took the jobs of thousands of people in different fields and we have also seen many top financial executives go under a lot of scrutiny. But the world will always require more people to join finance since businesses as well as individuals always need finance to acquire the things they need.

At first the only place to get started in the field of finance was by joining banks. But today there are a huge number of private firms and also government organizations that offer jobs in finance. Hence the opportunities for entry level finance are endless.

Financial firms can have many different types of funds such as home loans, car loans, medical funds, commercial funds and finance for commercial property. With so many types of funds the firms need people to help them with the task of deciding who to finance and how.

The different jobs available for entry level finance can include financial accountant, risk management jobs, sales, economic analysis and legal. In order to get these jobs all you need to know is how to understand and manage risk. You also need to be able to know when the risk is worth taking and what reward you will get when it is taken. Also you will need to reduce the risks as much as possible and only then will you be able to start making profits.

The way the field of finance is changing so drastically may make you think that a job in the field is not a stable occupation. But that is not true since it is just changing. Customers are now demanding lower interest rates and there are companies who are offering low rates for financial borrowings. This is why companies have to find ways in which their productivity in order to generate more profit, plus they are always seeking to increase their volumes. This actually means that financing will always continue to exist and that a job in the financial field will always be a stable one.

0% Financing May Not Be the Best Deal

Nearly a decade ago, struggling auto makers began offering 0% financing deals for new car buyers.

The goal of these programs were to sell cars and the auto makers hoped that 0% deals would do just that – and they were right.

Car buyers (currently in the market or not) flocked into auto dealerships seeking these financing deals. And, while some qualified for them, most did not. Once the buyer was in the dealership, the hard sell began – making it nearly impossible for the consumer to leave without a new vehicle – regardless if they qualified for the 0% financing or not.

Are these 0% financing deals really all that beneficial? Maybe? But, for the majority of auto buyers they really offer very little incentive – here’s why:

Most 0% financing deals are for only 36 months (3 years). Which is OK if you can afford a very high payment. Example, Ford is offering a 36 month, 0% financing deal for their Focus product line. A standard Ford Focus is priced around $17,000. Financing this vehicle, assuming 5% down, puts a payment around $449 for 36 months at 0%.

A high monthly payment for a low budget consumer. The only real benefit is that this vehicle buyer would pay no interest over the life of the loan (provided that the dealer or manufacturer has not built some level of financing into the price of the vehicle).

However, Ford is also offering 2.9% financing for 60 months. The same vehicle (with the 5% down) at 2.9% for 60 months (5 years) sets the payment at about $290 per month.

Much more affordable for consumer who seeking to purchase a vehicle of this nature (meaning that this is a lower priced car, with limited features, geared for the low income buyer – low income buyers who cannot afford $449 per month in car payments). But, $290 is much more affordable than $449 per month (a monthly cash flow difference of $159).

The one problem with this financing deal is that at 2.9%, the borrower (car buyer) would have to pay interest for the 60 months loan. But, what does this interest really costs?

A 17,000 vehicle, with 5% down, at 2.9% for 60 months equates too approximately $1,300 in financing (interest). If looked at over 60 months, this is about $21 per month.

But, Ford is also offering, on this same vehicle up to $3,000 cash back (not applicable with the 0% financing deal). This cash back option would more than cover the cost of financing – in fact, this cash back option would essentially pay the borrower some $1,700 (in overall benefit) for financing the vehicle and not taking the 0% deal. That’s $1,700 to the buyer’s good ($3,000 cash back minus the $1,300 in financing costs equals $1,700).

Interestingly enough, this auto buyer could essentially have their financing rate increase to 6.9% for the 60 months before the cash back of $3,000 losses its financial benefit.

The bottom line here is that 0% financing can be a good deal provided that other options do not offer better benefits. Instead of just looking at the financing rate (where 0% is always better than anything else) one should consider all offers and choose the one that makes the most financial sense.

All the above assumes that the purchaser would qualify for both the 0% financing and the 2.9%, 60 month financing options.