Tag Archives: equipment lease financing

Canada’s Economy- A Fortress or a Sandcastle?

In recent weeks, there has been considerable focus on the growing possibility of another U.S. recession – a risk that we peg at about 40%. This prospect has raised questions about Canada’s ability to withstand such a shock. Despite Canada’s relatively strong economic fundamentals and the continued outlook for growth, the economy is more vulnerable to a nasty external surprise than it was prior to the recent recession in 2008-09. While the business sector appears better positioned to weather a U.S. downturn, policymakers in Canada have less wiggle room on the fiscal and monetary fronts and households face larger debt burdens. In contrast to the experience in the 2008-09 downturn – when Canada’s economy suffered a considerably lesser blow than that Stateside – there is no assurance that a repeat would be in store in the event of a U.S. double dip. At a minimum, the Canadian economy would probably follow the U.S. into recession.

Less scope for policymaker response

One of the bigger differentiating factors is the reduced flexibility of monetary and fiscal authorities in Canada to respond. In 2007, Canadian short-term interest rates stood at 4.25%, government fiscal balances were in surplus and combined government federal-provincial debt was sitting at 54%. Indeed, the subsequent and massive injection of massive monetary and fiscal stimulus helped to prevent a difficult externally-driven, export-led recession from being considerably worse. Canada’s peak-to-trough decline in real GDP during the 2008-09 recession amounted to a sizeable 4%. But if the heavy losses in the export sector are stripped away, Canada’s household and government sectors suffered a much tamer drop of around 2.5%. Canadian job losses during the downturn were also heavily concentrated in the export sector. Today, a short-term interest rate at 1% leaves the Bank of Canada much less room to counter an economic shock without foraying into unconventional monetary policy options, such as quantitative easing. What’s more, with some $166 billion dollars more in outstanding federal and provincial debt (62 percentage points as a share of GDP), governments would be harder pressed to go on another major spending spree.

Household vulnerabilities have risen

The household sector’s flexibility to respond in the event of a severe bout of external headwinds is even more constrained. For one, the jobless rate remains more than a full percentage point above its pre-recession trough. Household debt as a share of after-tax income is considerably higher. It may be the case that the burden of debt service costs is actually lower today than four years ago due to the benefit

of lower borrowing rates. However, that could quickly change if income flows are abruptly cut off as a result of, say, a surge in layoffs. The higher home price-to-income ratio also suggests a larger degree of froth in the nation’s housing market despite the gyrations in home prices since 2007. By our measure, home prices are currently 10-15% over-valued. The bottom line is that household debt leaves households with less financial maneuvering room.

Business balance sheets stronger

Similar to the 2008-09 experience, a U.S. recession would swiftly hit Canada’s economy through the export channel. As such, many businesses would be in the line of fire. Roughly 70% of Canadian exports remain U.S.-bound while roughly one-fifth of business funding is generated in U.S. markets – shares which have not changed materially since 2007. At the same time, however, Canadian businesses would be in a better position to deal with the storm this time around. Businesses, on average, are holding less debt and are have more liquid assets. With commodity prices and the Canadian dollar in the same ball-park today as in 2007, profit margins are on the same magnitude. Another important factor to consider – especially when the level of risk to the Canadian business sector is considered – is the vulnerability of the U.S. economy compared to 2007. While the U.S. still faces a mountain of structural challenges – least of which is its ballooning government debt-load – it is highly unlikely that the economy is poised to suffer a contraction along the same line as that in 2008- 09. Unlike Canada, households and housing markets have

already undergone massive adjustments. Housing starts in particular can’t go much lower. Business balance sheets are also in decent condition notwithstanding the sluggish recovery to date.

Bottom Line

Canada’s economy headed into this summer’s turmoil in relatively good shape and our base case remains one of modest growth. Still we can’t ignore the simple fact that households and governments – two sectors that make up about four-fifths of Canadian economic activity – have a reduced capacity to respond to unanticipated negative events than was the case four years ago. The prevailing view is that if the U.S. economy were to fall into recession, Canada’s economy would likely follow suit. But by virtue of its fundamental strengths, many believe that the downturn would be less severe and the economy would recover more quickly than would be the case south of the border. Given Canada’s increased domestic vulnerability, such an outcome would not be guaranteed.

Technological Benefits of Equipment Leasing.Technology provides a needed and powerful edge in business

Technology provides a needed and powerful edge in business; the following points examine those benefits and let you decide how these benefits provide you with the needed edge in business. An equipment leasing arrangement provides you the edge you need without running the expensive costs associated with purchasing state-of-the-art equipment.

Wider Options, Lesser Costs – With an equipment leasing arrangement you are free to select your choice of equipment without paying the full price. This advantage also comes with the fact that most business equipment leasing companies will often handle everything from the maintenance to the deployment of their equipment. Your company can save the costs associated with the equipment as the leasing company usually gets price cuts on equipment and related services since they buy in bulk.

State-Of-The-Art Equipment – When a commercial equipment leasing company provides your business with equipment they provide the best. They do this because unlike your

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Heavy Construction Equipment Leasing- Advantages and Finance Options. To keep money free up in terms of the company’s line of credit….

Equipment leasing is a simple solution to grow your business with an ever changing economy. You can lease any and every type of equipment. In this article, emphasis will be on heavy construction equipment leasing.

To keep money free up in terms of the company’s line of credit, leasing is cheapest and best option for construction companies. So cash will be available in case of financial emergency or any other time of need. It is the most beneficial managerial and financial strategy to conserve working capital for any company. It resolves issues related to cyclical and seasonal fluctuations by slotting your payments into the months when your business’ sales are on peak. Furthermore, a lot of companies in construction opt for leasing as a good alternative in acquiring equipment to buying. There are advantages of heavy construction equipment leasing, which are:-

1.Your have a stable cash flow.
2.Assets are well managed.
3.Up gradation of Equipments can be done easily.
4.Customized payment

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Who can blame the government for using lease financing more and more…

When we think of leasing and equipment financing we think of the private sector, with companies using lease strategies as an effective overall alternative strategy.

However many municipal, provincial and federal government entities employ equipment financing for a number of different reasons.

Many times municipalities finance in this method to avoid statutory debt obligations.  The federal and provincial governments lease millions of dollars of computer technology every year. In many cases they could purchase the equipment outright through funding but they opt to lease due to the ability to avoid obsolescence and to allow uses to upgrade to newer generations of technology. The same goes now for other assets including fitness equipment. As governments struggle to reshuffle priorities they will finance more and more equipment, there seems to be no alternative. Here is Surrey BC we see the direct impact of this through massively underfunded school districts. The economic funding model from

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Pay Cash for equipment vs Lease: What you need to know

When does it make more sense to buy computers? When does it make more sense to lease? Assured Lease talked to two fast-growing small businesses, one that made the buy decision, one that decided to lease, to find out. We also spoke with executives at several large vendors to find out the latest trends and to get their take on buying versus leasing.

When your business is all about cutting-edge technology, buying can make good sense
Founded in 2000, with the current ownership taking over mid-2002 Small Business Television Network, or SBTV, is the first television network on the Web devoted to the small business market. The free service is available 24/7 on the Internet. Because of the high-tech nature of the business, having the latest technology is critical.

As the company’s Chief Operating Officer, Michael Kelley, explains, “Before we went and purchased anything, we developed a business plan with a three-year outlook on what we thought we needed for the business. During the planning

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Equipment Leasing Blunders That Can Cost Your Firm a Mint

Equipment Leasing Blunders That Can Cost Your Firm a Mint

Rod McHenry, the financial vice president of a document imaging company, thought he had great cause for celebrating. He had signed an unbelievable $370,000 lease proposal covering computer servers, workstations, software and other networking equipment. McHenry believed he had snared an incredible lease rate, capping off weeks of negotiating an acceptable equipment price with the equipment vendor. The proposal guaranteed a lease closing and offered a return of the 2% ‘commitment fee’ paid by McHenry’s company if the leasing company failed to give credit approval within two weeks. Little did McHenry know that signing this proposal would lead his company into the ‘Twilight Zone’ of equipment leasing. Ultimately, his firm would fork out more than $15,000 in legal fees seeking lessor performance, only to learn that the lessor was already insolvent and mired in several similar lawsuits.

Like McHenry’s employer, thousands of U.

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Equipment lease Tips for the credit challenged

Equipment Lease Tips for the Credit Challenged

Are you a business owner trying to find practical ways to finance your business?  If yes, then you must consider business equipment lease financing.  When compared to business loans, applying for an equipment lease is generally easier and the application process, faster than loans.

What do you need to get approved for an equipment lease?  Many leasing companies require the submission of the following documents: financial statements, tax returns, business plan and lease proposal.  Credit history is another major factor to get a lease.  Of course, if you can show good or excellent credit, a lessor will be more confident in your ability to keep up with your lease payments.

Nevertheless, if you have a history bad credit, it is possible to get the equipment lease financing you need.  In this article, let us talk about the steps that you can do to be able to acquire a lease despite having bad credit.

Leasing Programs For The Credit Challe

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Should I lease a car through my business or personally?

Should I lease a car through my business or personally? As a business owner or Company Director wanting to lease a car for yourself, you have the choice of either Business Contract or Personal Car Leasing. In other words, you could lease your car through the business or lease it in your personal name, and each option has its own implications, benefits and disadvantages.

Business Car Leasing or Personal Car Leasing – a question of tax. The main thing to consider when you’re thinking about whether to lease a car through your business or personally is the tax situation. If you lease a car through your business, you will have to pay Company Car Tax (or Benefit In Kind Tax as it is also known), as some of your mileage will be classed as for personal use. There is also the Car Fuel Benefit charge to take into consideration if the company pays for your personal fuel.

However, leasing a car through a business has real advantages for the company, which is why most companies still lease the

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Getting capital for tanning beds isn’t what it used to be

Getting capital for new tanning equipment is more difficult than in the past because of how tight the credit markets have gotten as well as how much the tanning industry has suffered. These two in combination have it important to understand all the different options available to you. If you have the ability you can always obtain new equipment the old fashioned way by paying cash. This is usually not the best option though as it uses up cash reserves for no reason. If you have good credit or available collateral you can obtain 0% financing and have the cash flow of your business pay for new tanning booths over time. These expenses can be written off as an expense which will also help you come tax time.

First Possibility: Leasing

  • Two most common options:
  • Ten percent buyout
  • The $1 buyout

Ten percent buyout – Choose a number of months to pay the tanning bed off in. Standard lengths are thirty-six, forty-eight, and sixty months. At the end of the lease you must pay ten percent o

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Joint ventures with equipment vendors

Economic recovery is real, but risks remain

Q. What is the status of the global economic recovery? I believe the global economic recovery is real. There is strong momentum in Asia and in other emerging markets around the world. However, in the case of the developed world, it does look like the recoveries are quite fragile and tentative. Canada is in a different situation than the rest of the developed world. Our economy went through a significant decline and has since rebounded. It has recouped almost all the output it lost during the last recession, and almost all the jobs it lost. But the economy will slow down from here.

EQUIPMENT VENDORS – are you interested in running your own equipment lease portfolio for equipment you sell? That is to say you make the credit decisions, you do the lease documents, you take the risk and your company realizes the upside profit margins inherent in the loans? All using our money. As we head into the next 10 years of stability it makes

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