They’re the same, are they not? Absolutely, positively… not! We’re obviously speaking concerning the equipment loan provider industry in Canada and the way your choice of the best partner can pick which pros and cons you may enjoy… or experience. We prefer positive advantages that the business may benefit with, not Canadian business financing decisions that you’ll suffer through the wrong selection of a lease partner for the specific needs.
Ok, what exactly within the heck shall we be speaking about? Basically you will find four kinds of asset finance partners within the equipment leasing industry in Canada. And also you believed that a lease loan provider would be a lease loan provider!
The very first kind of partner may be the ‘captive’ – no you aren’t the captive! The word refers only to financial institutions which are owned and literally situated within various manufacturing firms. When clients ask us about lease finance options plus they mention specific equipment we’re always reminding these to ensure they determine whether the maker captive finance firm offers asset financing. When they will we can guarantee it’s most likely the very best financial terms you’ll be able to generate, in addition to a better opportunity for overall approval re rate, structure along with other general terms. Can you explain that?
It’s related to motivation – the captive finance firm is motivated to invest in and promote the purchase of merchandise using financial options for example leasing to obtain the products to industry. Need to know a secret which should surprise most business proprietors and financial managers? It’s simply that captive finance firms inside a competing industry will finance their competitor’s products, frequently at better rates, terms and structures. That is mainly because the financial transaction will most likely provide the competing mfr a foothold to your business to advertise then sell their very own products. So don’t believe that the great firm for example IBM CREDIT CORP. may be the only firm which will finance your product or service you buy through them. Others may also!
The 2nd primary number of asset finance firms in Canada is our chartered banks – Two major banks have leasing arms which are very significant, others employ lease finance to different levels. Our real only comment here would be that the credit bar is high and generally you need to be a person from the bank to savor the truly amazing lease and finance structures they provide.
The 3rd primary group of the Canadian equipment leasing company marketplace is really the biggest and many robust. Additionally, it requires all the understanding and navigation by Canadian business proprietors and financial managers. This is actually the Independent lease finance market, where you can find many businesses that offer lease financing according to various criteria of asset size, credit quality, geographical preference, industry specialization, etc, etc, etc.
You’ve got a great choice with this category 3 partners, the independent financial institutions. The different options are tens or countless hrs figuring out their credit criteria, additional collateral they might require, how big deals they are doing, the various lease structures they provide, or… alternatively.. use our final category for rent provider, the independent lease finance consultant who’re knowledgeable intermediaries who be aware of market, possess a strong status with lease providers, and may match the benefits you seek within an equipment finance transaction right provider. Subtle nuances inside your overall lease structure, with respect to the size your transaction, can help you save 1000s of dollars and untold grief in the finish from the term of the lease.