At one point or in other Canadian companies of all sizes, we realize that financing new or existing businesses through leasing companies in Canada works much better than buying those assets; in fact they have mastered and understood the lease against the purchase decision.
It never hurts to cover the basics with customers, so we constantly reinforce the fact that equipment leases and loans allow you to keep up with the technological curve of your industry – in fact you have the latest and greatest to compete .
Capital preservation is also a key point at the top of our list; in fact, it is not necessary to lend a bank loan for the asset. Bank loans for businesses also have related problems that can have a significant impact on your business, such as reducing your overall loan agreement, etc. It is therefore no secret that 80% of all North American companies hire some of the activities they need for their company.
The monthly payment of the course depends on the size of the asset and the structure of the leasing or service contract with the leasing companies in Canada.
Innovation in leasing financing often comes from the type of lease you enter. In Canada, two primary offers are on top: capital leasing, also called “lease to own”, and operating leasing, which we can effectively call “leasing to use”.
Innovation abounds in the financing of operating leases. It is the ultimate solution for the investments you make in sectors such as technology, telecommunications, etc. Most borrowers (and certainly do not agree with their attention) tend to refine the monthly payment. In an operating lease the monthly payment is significantly lower, anywhere from 5 to 20% depending on the size and type of activity.
At the end of the operating lease term the equipment is not fully paid. Do not worry, it’s a good thing, because a well-structured operating lease through Canadian leasing companies allows you to take into consideration the purchase, return or continuation of the agreement. Those options are standard in an adequately structured operating lease.
While payments on a finance lease are higher, do not forget to own the equipment at the end of the term. This of course can be a double-edged financial weapon! , since the equipment could have a significant value, a value or no value. On balance, we would say that most companies that go into a capital lease scenario do so mainly because they want to keep cash flow.
We referred to the “lease against purchase” decision. This is the term referred to as the Canadian entrepreneur or financial manager who tries to decide whether to rent or buy an asset.
Any financial decision is always 100% right, Of course not, so when it makes sense to buy a good, it gives you ownership of the asset, in addition to your ability to control final use and residual value. In some cases your accountant may be able to show you that the purchase is less expensive than leasing.
We tell the client that in the financing decision process they should consider things such as the final monthly payment, the services related to the financial activity, the purchase options, as well as the effects of the cash flow of the transaction. Oh, by the way, most busines owners quickly realize that leasing financing is easier to obtain and receive approval. Leasing companies in Canada are flourishing and want your business.
Contact a reliable, credible and experienced Canadian financial adviser on innovative financing of Canadian leasing companies that might make sense for your business. You will master the lease against purchase decision!