Manufacturing Equipment Leasing
|Manufacturing Equipment Leasing and Financing Options are available for many different types of equipment deployed in the different manufacturing and processing applications that operate in Canada at the present time.
While this is far from a comprehensive list, here are several of the more common pieces of equipment that regularly get financed through the leasing programs offered by banks and lease financing companies
When you’re budgeting for a capital purchase and the related financing costs, keep in mind that lower cost financing and better leasing terms will be available for the higher volume equipment items that have the broadest application within a specific industry and across all industries.
A few good examples would be items like forklifts, backhoes, and utility trailers.
As manufacturing equipment becomes more rare or specialized, the equipment financing options will likely decline as well.
In order to assist with the purchase of some of the more high priced, lower volume pieces of equipment found in certain industrial equipment financing applications, the equipment manufacturer may offer certain guarantees or recourse agreements to the bank or leasing company providing the financing.
An example of this would be a manufacturer agreement to repurchase the asset from the financing company in the event of borrower default, taking the disposal risk away from the capital provider.
Used manufacturing and processing equipment can also be rather easy to lease if an active resale market exists for the asset in question.
And because different forms of heavy equipment can retain their value for decades, its also not uncommon to see assets over 20 years in age still qualify for equipment leasing.
In the event of an industry down turn or cash flow crunch brought on by some unforeseen event, one of the ways for manufacturing companies to stabilize their cash flow is to refinance existing assets.
This would require utilizing the business equity in the equipment, which can be substantial in many cases, to either secure a new term loan from a bank or go through a sale and lease back process with a leasing company.
In either case, the ability to refinance will be largely based on the assessment of liquidation value in the resale market, which can be substantial for different types of industrial manufacturing and processing equipment.
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