Best Tips On Good Lease Rates , Pricing and Leasing Options in Canada

Updated: May 17, 2011

Many clients tell us they receive a lease of financing quote and don't necessarily understand whether or not the financing offer is in fact competitive. All things being equal we're going to assume your firm has good credit quality. But don't despair if you don't because the one good thing about leasing options in Canada is that it's available for all firms, regardless of overall credit quality or financial challenges.

So a couple of key basics, here we go: First you need to understand how leasing pricing is derived. The key elements of any finance quote are: term of the lease, interest rate, present value, payment, and your end of term option. Remember also that when you know any 4 of those key elements you can always figure the last one out. We would point out that it helps to have a true ' financial calculator ' to derive exact pricing.

We cringe when we hear the phrase ' whats my rate ' from clients... simply because that isn't always the aspect you should be focusing on in equipment financing. Want to know what leasing rates are in Canada - They range from 4 3/4% to 24% or more per annum in the current environment. In fact lease rates got a lot better in 2011 as the economy approved and Canadian leasing companies got their act in gear again.

One of the best tips we can give you is to do some real basic lease vs. buy analysis on your transaction. This of course assumes you are in a position to purchase the asset outright, because quite frankly most clients are looking at leasing options simply to conserve cash and working capital.

And oh yes, try not to view leasing as a commodity, when it facts it's a specialized form of financing that allows you to acquire assets and finance them over their useful economic life. Think in terms of the asset you are acquiring, how it will affect your profitability, and don't forget balance sheet and tax issues that lease financing can positively impact.

Here's a challenge. Do you think we could better any lease rate you could achieve on your own by say, 10%?! A quick way to do that is by letting us offer you an operating lease, which can significantly lower your payments, but still give you that financial flexibility. You can acquire assets without beefing up your balance sheet with debt - which is desirable for many business owners, particulary when it comes to assets that have a technological life cycle.

Remember also that by making a down payment or providing a security deposit, both of which may or may not be required also drives that pricing down.

So do we have a bottom line on the sometimes confusing aspects of lease rates, feeling you're getting a good price, and ensuring you know your leasing options when it comes to type of lease, etc? We think it simply investing some time and gathering knowledge on how the lease industry in Canada works, how it prices different leasing options.

Featured Research
  • 2017 Contact Center Software Cost Guide

    Are you paying too much for your contact center software? Are you satisfied with its capabilities, or do you wish it did more? These are questions most businesses don’t take the time to think about, even though contact center software is one of the most important investments that you’ll make. With a little bit of planning, you can end up saving money and still end up with better functionality. more

  • What You Need to Know About VoIP Security

    No matter the industry or area of expertise, a strong VoIP system is the perfect tool for any business looking to take both its internal and external communication to the next level. more

  • Are You Using These 5 VoIP Features?

    In large part, the success of your business depends on the strength and reliability of your team’s many communication networks—this includes your Voice over Internet Protocol system (VoIP). more

  • Video Conferencing Best Practices

    Video conferencing is quickly becoming one of the most important communication channels for both small and big businesses. As more businesses turn to this technology, expectations about the experience are also rising. It’s not enough to just offer video conferencing as a communication method. You also need to meet minimum audio and visual standards, and there’s even proper etiquette to consider. more

  • 10 Contact Center Myths Busted

    For most forward-thinking companies, the use of contact center software is on the rise. That said, in spite of contact center software’s sudden rise in popularity, a number of myths have begun to take shape. more