subject: Scientifically Proven ? An Asset Lease Whether Operating Or Capital Works For Financial Bridgin [print this page] Scientifically proven? It's defined as a ' body of techniques' for acquiring new knowledge. Unless we're missing something an asset lease is a trusted financial solution, bridging your operating capital needs to your long term financing solutions.
Whether it's an operating lease versus a capital lease your company still benefits from the appropriate combination of use and to a certain degree, ownership.
So why does a lease finance solution allow you to reduce the consumption of capital. Simply speaking you can direct funds required to buy assets towards more important things, such as growing your business, expanding your products and services, etc.
When you choose between an operating lease ( using ) versus a capital lease ( owning ) it comes down to two basic criteria for final approval - the value and quality of the asset , as well as of course your firm's general credit worthiness.
The great news for Canadian business owners and financial managers is that leasing companies and solutions abound! They are provided by bank subsidiaries, independent commercial finance firms, and captive finance organizations of larger manufacturers. (In general you can't beat vendor/captive financing for rates, terms and structures - simply because the finance arm is incented to approve and finance your asset based on the sales focus of the mfr itself).
Depending on what industry you are in you might well find that certain lease firms and solutions are more appropriate than others. Technology, computer, software, and telecom type assets lend themselves perfectly to be financed via firms with that special tech experience. More often than not you will, or in fact should, consider an operating lease for these types of assets.
What then are the key questions or issues that you should address when considering an asset lease, or utilizing this financing tool as a bridging solution... for example a sale leaseback ?
The key considerations are your expected term under which you believe you will use the asset. (3 and 5 year terms are most typical - however 2-7 year terms are available depending on asset type).
Capital or operating leases work best when they are part of an overall strategy. Your company will derive maximum benefits when you consider several issues around your asset or bridging needs - they include tax implications, how you will account for your lease, your future needs for the type of equipment you are acquiring, etc.
The Sale leaseback scenario is a great bridging strategy for financial solutions. It takes your current investment in assets and monetizes them, giving you critically needed capital.
Can leasing ever be a poor choice? Perhaps, but certainly not often. The weight of evidence, scientific or otherwise! suggests that this financing tool gives you maximum leverage in asset lease finance.
If you're looking for more information and expert advice on lease concepts speak to a trusted, credible and experienced Canadian business financing advisor
by: sprokop
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