Secrets to Obtaining Best Lease Finance Rates for Equipment Leasing in Canada

Updated: March 13, 2011

Most business owners and financial managers in Canada who acquire equipment realize there are much touted significant benefits to equipment leasing. When business owners approach asset acquisition they do it in the view of trying to determine if they should 'lease' or 'buy' the asset in question. The decision often focuses on two issue, is it less or more costly to lease, and finally what are the cash flow advantages to utilizing this type of financing.

Achieving the best lease finance rates comes down to a couple key issues - the overall credit quality of your firm, and more importantly, how you present that credit quality to the lessor. Secondly structuring of your transaction, hopefully with your input. Significantly affects your lease rate. For example a larger down payment will of course drive your overall rate down considerably - i.e. you are financing less.

More often than not a simply first and last payment is all that is required as a sort of down payment or security deposit on your transaction. Other key points that will enhance your equipment lease rates is the importance your place on items such as the ability to return the equipment to the lessor at the end of the term.

How does returning the equipment at the end of term to the lessor become a 'secret' of great lease finance rates? It's simple, your decision to return the equipment at end of term typically allows you to opt for what is known as an operating lease - as such the lessor makes a bet on the ability to sell or remarket or release the equipment to another party. That type of transaction typically drives the overall lease rate down significantly.

Most business owners are incredulous that in some cases you could actually achieve a 'negative' lease rate on your transaction! How's that for a great inside tip or secret on equipment lease financing !In the transaction we just detailed it is possible that all your payment don't even add up to the original purchase price of the equipment or asset - due, as we said, to the lessors belief they will get the equipment back. And you should be very happy to let them take that bet and risk, because that becomes the lessor's problem, not yours, you simply benefit from the great lease finance rates on your transaction.

Another more obvious benefit of equipment lease financing is that it's available to all firms, including start ups and firms that might be financially challenged; therefore lease finance rates you achieve are often considerably better than other forms of finance, such as bank term loans, etc.

In many equipment finance transactions the ability of the owner to provide a strong personal guarantee can often enhance the overall pricing of your transaction in your favor, although we acknowledge of course that most business owners would prefer to avoid, not offer up such guarantees.

Featured Research
  • The New SMB Phone Systems Comparison Guide

    Does your small or medium-size business need a new phone system? Then you're in luck! Our new, updated comparison guide helps you cut through superfluous information and narrow down your list of solution providers. Get the latest data on phone system features, pricing, and performance metrics in an easy-to-use format. more

  • Contact Center Software on a Budget

    Although contact center software is necessary for a modern contact center, it can be outrageously expensive. Many companies find that their budget bloats during the implementation process. more

  • How UC Can Help Your Business Survive the Holidays

    The holiday season is filled with frenzy and excitement for businesses and consumers alike. Consumers prepare gift lists, compare brands and prices, and begin shopping with a vigor that is not present most other times of the year. For many businesses, the holiday season accounts for a large profit bump at the end of each year, and companies strive to exceed their goals and keep customers happy during this rush late in the year. more

  • [Infographic] Switching Phone Systems

    There are a lot of possible reasons you might want to switch to a new phone system. The old one might cost too much or be too troublesome to operate and maintain. It might not be flexible enough. It might not be reliable enough. Or it just might not have the kinds of features and capabilities that you need in today’s competitive business climate. more

  • Business Intelligence Software Cost Guide

    Your choice in a BI (Business Intelligence) provider can lead you to make better, data-driven decisions for your business, resulting in significant ROI. Or it can cost hundreds of thousands of dollars with mixed results. more