And oh yes, some extra tips on ensuring some additional benefits not readily known to everyone would help also, and we'll be sharing those also.
Most business owners know intuitively that they should be leasing - one simply reason is that millions of other firms are also .They simply are looking for a better or easier way to understand what makes a ' perfect ' lease financing transaction .
Ways in which you can determine what level of pricing and prompt credit approval you can achieve focus around some very basic issue - for example, do you want to own the asset, or use it. Just that decision alone will save you thousands of dollars and significantly impact working capital. Lets use a ' real world ' (that's where we work every day) example.
Let's say your company requires some significant plant equipment as an example. The cost is, say $300,000.00. You're not entirely sure you can afford the asset; you simply know you need it, and you are perfectly sure you can't afford to pay cash for it. Imagine what that would do to your bank line of credit or cash on hand!
Using our example the monthly payment on a 3 year lease would be 9338$ approximately. We estimated an interest rate of 8% on the transaction. Let's say you determine that you can afford $7000/ mo, but not $9338. Does leasing provide a solution? ... It sure does?
Ask you lessor to determine the term you need to change the lease to, allowing you to fit your payment. We've done the calc for you, and its 51 months. And, guess what, by committing to a longer term you can usually get a lower interest rate. Lessors like when they can guarantee their yield for a longer period. No surprise here, as that's how they make money.
We don't necessarily agree, but most clients we talk to are ' only ' focused on the lowest pricing or monthly payment in trying to achieve those best leasing rates. Lease financing companies consider a number of factors when offering you those rates.
So what are the key issues in lease pricing, and, more importantly, which of those can you as a Canadian business owner and lessee impact upon?
All assets can be financed, subject to credit worthiness. However, some assets depreciate slowly, some very quickly (think computers!), and some assets both hold their value, or even appreciate in price. Asset class plays a big factor in lease pricing, so be prepared to position and defend your asset quality.
Useful life of the asset is somewhat the same; don't expect to get a 5 year lease at great rates on state of the art computers or telecom unless your firm has a stellar credit rating.
If your firm is entering into an operating lease it is highly recommended that you arm yourself with the best possible date on residual values of the asset at any future point in time. That will allow you to negotiate a higher residual, and achieve best leasing rates and financing.
We noted there are some aspects of leasing rates and pricing you simply won't have an effect on. It should come as no surprise that leasing companies borrow money also. Their cost of funds and their required ' yields ' determine... your lease pricing. (As well as your credit quality of course)
So we can make a broad general statement that best leasing rates are achieved by dealing with larger more well capitalized lease companies in Canada.
In many case small admin and processing fees can add up and drive up your leasing rates. Negotiate hard and determine if these additional add on type charges are really necessary and if you can avoid them your pricing will improve.
Together, technology and the connective power of the internet are making drastic changes in what a typical work setting looks like today, and many companies are beginning to rely more upon a remote workforce. In fact, according to Global Workplace Analytics, “regular work-at-home, among the non-self-employed population, has grown by 105% since 2005.” more
You may think your business phone system is functional, but is it fully modern? In recent years, telecommunications technology has made major strides. A system that was perfectly serviceable ten years ago—or even five years ago—is now very out-of-date. more
Among all of the business software applications necessary for business operations, ERP is undoubtedly one of the most important. Making the wrong selection can have a disastrous impact on your accounting, manufacturing, and supply chain. With so much at stake, it is crucial to make a well-informed decision. more
Did you know that, according to Forbes, 86 percent of customers will pay more for a better customer experience? Customer satisfaction is always a worthy business pursuit, but to identify customer preferences and exceed expectations, you must keep pace with innovations in the technology your customers are using. more
This whitepaper describes why the shift from a traditional to a social intranet is imperative to staying competitive, and analyzes the costs and benefits associated with implementing one. You will also find useful KPIs to measure performance and further leverage your intranet's success, raising employee engagement and boosting your competitive advantage. more