“Leasehold Improvements Can Potentially Be Financed Through An Equipment Lease Facility”

If you are looking to complete some leasehold improvements in a rented space you may be looking for ways to finance the related costs so as not to drain your cash flow.

Probably the most common or well known source of leasehold financing is the small business loan programs provided by the federal government that provide guarantees to banks to make these types of loan to small and medium businesses.

A lessor known and growing option for this type of financing is through equipment leasing programs.

Leasing companies will consider financing leasehold improvements for businesses and business owners that have very strong financial and credit profiles.

The most common industry that current takes advantage of this type of financing is the medical industry where doctor practitioners in the various field utilize lease financing for equipment and leaseholds.

The major differences between a small business loan and a lease for this type of financing are 1) the speed of getting financing in place, and 2) the amount of leverage that you can secure.

From a speed point of view, while a small business loan can take over a month to process and get approved prior to funding, the average turnaround time for a leasehold approval is about a week.

And even though these government sponsored small business programs promise to be able to finance up to 90% of the cost of your leaseholds, they typically top out at 75%, provide a further cash drain to the business.

With leasing, depending on the strength of your financial profile and the amount of funding you require, you can potentially get 100% of your lease holds financed, less one or two payments in advance.

And while most leasehold leasing situations are incorporated into a package that includes equipment purchase as well, there are leasing companies that will strictly lease finance the leaseholds all by themselves.

Because the value of the security is low to nil for leasehold improvements, the financing approval is primarily based on non asset factors such as financial earnings of the business, credit profiles, and personal net worth of the guarantors.

If you are looking for a financing option for leaseholds and want to better understand how an equipment leasing source may be a fit, I suggest that you give us a call so we can go through your requirements in detail and provide relevant options for your consideration.

“Equipment Leasing Specialist Providing A, B, & C Credit Solutions For New And Used Equipment

Equipment leasing solutions have become one of the main sources of capital for small and medium sized business in both Canada and the U.S.

This is because leasing covers such a broad range of asset types, potentially including such things as leasehold improvements and computer software.

And as equipment leasing specialists, we work towards providing the most relevant leasing options that are available to your business at any point in time.

The process for lease financing is fairly straightforward, but leasing success starts with making sure that you are working with the most relevant sources of financing for your particular requirements.

That’s where we come in and start off with going through an assessment of your needs with you so that we are 1) completely clear on what you’re looking for, and 2) in a position to provide the best possible advice with respect to both leasing company targets and the type of lease structure that best meets your needs.

Equipment Leasing Specialists Are More Than Brokers

By definition, an equipment leasing specialist IS a broker as our role is to introduce you to leasing companies that would be a good fit for your requirements, and then work with you to complete the financing process.

But the term broker can also be seen as someone that adds very little value to the process and is more of a gatekeeper for some leasing companies that won’t work directly with the public.

As true equipment leasing specialists, our commitment is to provide a high level of customer service that includes spending the time necessary to discuss your situation as well as different financing strategies that may be available to you.

And while we can say that the lease financing process is fairly straightforwards, there are always people involved so things can and will go wrong at times.

But not to worry.

As your representatives in the process, one of our main goals is to stay on top of the paper flow and correspondence between yourself and the leasing company so that everything can be completed as seamlessly as possible, and if any issues do come up, that they are dealt with swiftly so that funding is not delayed, and all potential approvals can be saved.

Our process starts with a phone call, so if you require equipment leasing or have some questions about the equipment lease financing process, please give us a call and we’ll make sure you get your questions answered right away.

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“Municipal Equipment Leasing Options For All Asset Types”

Municipal equipment leasing is available for all operating divisions of municipal government including but not limited to hospital, fire and rescue, schools, public works, public health and safety, waste management, and public administration.

As a municipal customer, you can be afforded some of the best equipment leasing rates out on the market today.

Most leasing companies consider municipalities as preferred borrowers or lessees and as a result provide excellent rates and terms for your financing requirement.

Leasing terms offered for municipal equipment leasing are some of the longest anywhere on the market and the payment options can be structured to meet just about any cash flow requirement you may have.

For small one off acquisitions under $75,000, the approval process can be accomplished in less than one day at times with funding to follow soon after.

Larger requests will take a bit longer as there will be more information required in the application package and the leasing company may have multiple levels of review depending on the amount requested.

Municipal lease financing requirements can also be accommodated in amounts under $100,000 and amounts far in excess of several million dollars as well.

Municipal Equipment Leasing Can Attract Very Competitive Financing Options.

Because we work with a large number of equipment financing and leasing companies, we have the ability to get your financing requirements in front of the right people and push towards getting you the best rates and terms in the market place.

The key to getting the best deal is providing us with some lead time to put together an effective application package and then to send it out to targeted lenders.

The more time a competitive offering has to work with, the more likely we will be able to arrange deeper lender or leasing company discounts in order to win the business.

Regardless of your municipal equipment leasing requirement, I suggest that you give us a call so we can complete an assessment of your needs and review different equipment leasing options with you and your team.

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“Equipment Leasing Can Be An Effective Way To Restructure Short Term Debt”

Equipment leasing through a sale and leaseback process can be a very efficient and effective way to restructure the short term debt on your balance sheet.

When we speak of the need for short term debt restructuring, this refers to situations where the business is behind on short term debt obligations such as trade credit, operating accounts, and government remittances.

If these accounts are not brought up to date, the business runs the risk of having credit reduced or eliminated and having collection action taken against it which can restrict the ability to operate or even stop business operations all together.

When there is considerable equity in equipment assets, the best solution for generating additional capital to pay up short term debt and then repay the refinanced amount over future years is through equipment leasing.

The equipment leasing process for debt refinancing, described as a sale and lease back transaction, has the lender or leasing company purchase the assets from the business in return for incremental capital and an equipment lease that allows the business to retain exclusive access to the equipment during the term of the lease.

At the end of the lease term, the equipment is typically bought back from the leasing company for some nominal amount that was determined at the outset of the financing.

The leverage that can be secured from this type of transaction will depend on a number of factors including the type and condition of the equipment and the financial profile of the business.

Basically, the more stable the business operation and the longer the remaining life of commodity type assets, the more leverage that can be secured.

Debt Restructuring Through Equipment Sale And Leaseback Can Be A Business Saver

In most cases, the cost of a sale and leaseback transaction for the purposes of debt restructuring is going to cost more than conventional financing for the purchase of a new or used piece of equipment.

But when you compare the incremental cost of financing to the business risk that is being reduced or eliminated with respect to trade credit and government remittances in particular, the additional cost can prove to be insignificant.

That being said, equipment refinancing costs can also get quite high if the business is considerable financial distress, so the cost of the debt restructuring action should always be weighed against the benefit being gained from doing so.

The primary goal here is to develop structured repayment of short term debt into an equipment leasing facility so that the short term debt that has built up can be paid back over a longer period of time without causing any further financial distress to the business.

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“Refinancing Equipment Through An Equipment Leasing Facility Is Common Place In Most Industries”

The process of refinancing existing equipment that has either been paid for in cash, or has had a loan or lease against the equipment which is now paid off, is most typically done through an equipment leasing process known as a sale and lease back.

The other equipment refinancing scenario would be when equipment has a current lien or charge against it and you wish to get a new loan or lease in place to pay out the existing charge, plus potentially provide additional capital, assuming that there is enough equity in the equipment to justify an increased borrowing or leasing amount.

Under this second scenario, a sale and lease back option is still going to be the most common form of equipment refinancing in most situations.

With a sale and lease back transaction, your existing assets you own, or the assets that you are leasing that are owned by another leasing company, are sold to an equipment leasing company that is prepared to finance your used equipment for an agreed up amount, rate, and lending term.

Most equipment financing companies have a standard rule that if you have purchased an piece of equipment for cash or self financed it, you can readily apply and receive an equipment loan or lease up to 6 months after the date of purchase without much issue.

This is because most financing companies consider an asset purchased within six months to be new and apply their financing criteria accordingly.

But once an asset is owned or leased for more than 6 months, additional lender and funding criteria can come into place before you will be able to come an equipment refinancing transaction.

Refinancing Equipment Can Require You To Meet A Higher Lending Standard

If you’d like to get the best available rates, or close to them, from an equipment refinancing transaction, then you’re going to have to prove to the lender through your financial statements and credit profile that purpose of the transaction is to fund growth or restructure the balance sheet in a stable business operation.

If the business is in financial distress, it is unlikely that “A” lenders are going to consider providing an equipment refinancing facility.

In cases where additional cash is required and the business is not financially stable, the borrower or lessee will have to consider “B” or “C” credit options which fall more into equity based lending whereby the lender will assess the market value of the asset based on a forced liquidation appraisal and provide a percentage of that value in the form of a loan or lease.

The rates for equity based or asset based loans or leases of this nature are considerably higher than “A” lender rates and are only provide for one or two year periods, allowing the business time to either improve their financial position so they can qualify for lower rates, or sell the assets off under orderly liquidation in order to preserve their equity.

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