Basics of Canadian Commercial Equipment Financing

Basics of Canadian Commercial Equipment Financing

Commercial-Equipment-FinancingWhen you are out to lease commercial equipment in Canada, the scene is quite big here. Naturally, you will be overwhelmed by the sheer number of options. Add more factors to the equation like costs, leasing, rules, credit score and you end up confused.

Scarce Capital and Business Expansion

Most businesses know that in order to complete the increasing orders, they have to expand. This, in turn, means more equipment. Many business owners know the importance of equipment leasing in Canada since it offers more benefits to the consumers. There is low down payment and much less paperwork than outright purchase. Equipment leasing companies offer favorable terms compared to banks. However, the company can repossess the equipment in case the person defaults on monthly payments. Banks have to follow stringent procedures to seize collateral.

Leasing companies also have better stock of equipment in comparison to the traditional sources. They can also help you procure specific equipment. They are willing to go the extra mile than a lender.

Leasing Makes Sense

Leasing helps free cash for growth. When you run a business, you need to recognize that capital is the key to consistent growth. Leasing helps you save cash and use the equipment to its full potential in your business activities. Leasing commercial equipment helps maintain cash flow levels and keep the business humming.

Useful life of equipment

There is no point in paying for an equipment loan even after the useful life of the said equipment is well past expiry. Such an asset has depreciated beyond its value and needs to be changed. Before a business can complete the payments, the equipment is dead. Leasing allows us to remain well within the useful life and change the equipment as and when need arises.

Use Debt in the Right Way

Most companies think debt is bad. Healthy debt levels have led to huge success for many companies. For example, companies with no debt usually take loan for equipment from their cash flow thinking they are making prudent decision. In reality, they are converting their capital into debt through a depreciating asset. They are reducing the cash flow for the future and usually end up in trouble. This behavior is most common in trucking industry.

Optimum use of leasing and finance helps achieve the results you want from your business. Ensure that you include extra factors such as leasing-cum-installation and other such soft costs before taking the plunge for leasing.

Peel Financial helps you secure leasing for useful commercial equipment. Contact us for more information on commercial equipment finance in Canada.

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