Equipment Leasing Rates In Canada : Lease Costs And Your Next Interest

Rate Just Got Better

The Complete Guide To Not !earing A"out Equipment Lease Rates In Canada
#$ER$IE% & In'ormation on equipment leasing rates in Canada ( Lease )osts and
the interest rate are dependent on a num"er o' 'a)tors & *ere+s !hat ,ou need to
-no!
Interest rate and equipment lease costs seem to be a major mystery to the Canadian
business owner and financial manager. That doesn't have to be the case. That type of
confusion has left some business people cursing about leasing cost!
Lease )osts are dependent on a number of clear factors that seem to be not generally
known when companies use asset leasing to acquire assets. If you want to take advantage
of Canada's most popular method of acquiring business equipment you need to
understand what's behind the pricing. et's dig in
There are a number of factors in lease finance costs ! as we've said too many
owners"managers focus solely on the . interest rate ' which is rarely the most important
part of a lease# especially as the si$e of your assets grow in % or numbers.
&t the heart of any transaction is understanding the actual calculation of a lease rate.
They are' term/ 'inan)ing rate/ asset )ost/ monthl, pa,ment/ end o' term o"ligation(
(hen you know any ) of those you can pretty well calculate the missing piece of the
pu$$le. In fact most lease companies in Canada quote only monthly payment# not the
interest rate. &nd to add to the confusion the way in which the rate is presented may not
always be the same! *+e,t time you are quoted a lease rate ask the lessor if they have
quoted you in ' advance' or ' arrears -.
%e.0e ad0ised in the past that the o!ner 1 manager has t!o )hoi)es in t,pes o' leases
o''ered 2 the ' C&/IT& ' lease to own# or the . #3ERATING. lease to use . 0ecause
operating leases are in fact rentals many business owners may be surprised to know that
the actual rate calculated may be negative ! i.e. below 1! That's because the lessor is
betting you will return the asset and they can resell or refinance it again.
The term of the lease will of course drastically affect the monthly payment ! being
approved for a longer term *amorti$ation. will in fact lower the monthly payment ! that
longer term of course increases the finance profit for the leasing company.
Credit quality drives the majority of lease costs rates in Canada. 2ates are very
competitive if you are dealing with lessors that directly compete with each other.
3inancing approval is often as important as the -rate ' to many clients we meet and work
with.
(e mentioned that interest rates aren't the be all and end all in asset financing. That's
because lease documentation# financial statement impact and ta, impacts are a key part of
a true lease financing deal.
4nderstanding the terms and )onditions in your equipment lease transaction is also
critical ! end of term obligations# maintenance issues# and other ' nuances ' affect your
ultimate cost to finance.
If there is one way to step delicately through the lease costs minefield in Canada its to
seek the services of a trusted/ )redi"le and experien)ed Canadian "usiness 4inan)ing
Ad0isor !ith a tra)- re)ord o' su))ess who can assure you that your ne,t lease finance
transaction will just get better.
tan 3ro-op ! 5 3ar- A0enue 4inan)ial :
http:11!!!(5par-a0enue'inan)ial()om
0usiness financing for Canadian 3irms # speciali$ing in working capital# cash flow# asset
based financing # 5quipment easing # franchise finance and Cdn. Ta, Credit 3inance .
3ounded 611) ! Completed in e,cess of 71 8illion % of financing for Canadian
corporations . In'o 1Conta)t :
http'""www.9parkavenuefinancial.com"equipment!leasing!rates!lease!cost!interest!
rate.html
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