Financing and Leasing
We provide traditional financing with competitive rates, terms, and structure on revenue generating new and used assets. This type of financing allows a ‘freeing up’ of working capital and immediate ownership of the asset. Tax is owed prior to initiation of the financing.
Capital and Operating LeasingLeasing is simply an alternative type of financing with certain tax and cash flow advantages. It reduces the financial burden of capital expenditures and allows a company to pay for the equipment as the equipment helps to produce income. With leasing, the company has an immediate use of equipment where there is an option to purchase at the end of the lease term for a pre-determined amount, a fair market value, or a return of the equipment. Taxes are distributed over the term of the financing rather than at the beginning, as is the case with traditional financing.
Customized SolutionsA variety of leasing products are available, allowing a business to tailor a program to match expenses with month-to-month or year-to-year cash flow requirements. Through Canada West Finance, customized leasing programs address our clients’ cash flow needs and budget requirements by focusing on transaction structure, such as including the potential for ‘skip’ payments for seasonal business.
Improved Cash ForecastingBy leasing equipment, a company knows the amount and number of lease payments required over the life of the leasing period. This allows businesses to more easily forecast future cash flow expectations and ensure that the leverage of assets into revenue is more manageable.
Leasing payments can be treated as operating expenses on a company's income statement. Therefore, leased assets may not have to be accounted for as capital expenditures requiring depreciation on the balance sheet and hence, the recording of a liability. Favourable debt to equity ratios can remain intact. In addition, in most cases, leasing permits payments to be deducted as an operating expense, and accelerated write offs can shift tax payments from near to distant future.
A lease provides the use of equipment for specific periods of time at fixed payments to the lessee. Generally, the lessor assumes and manages the risk of equipment ownership. At the end of the lease, the lessor is responsible for the disposition of the asset and can provide a form of ‘built-in’ asset management.
If the nature of your industry demands that you have the latest technology, a short-term operating lease can help you get the equipment and keep your cash. Lease equipment that you expect to depreciate quickly. Your risk of getting caught with obsolete equipment is lower because you can upgrade or add equipment to meet your ever-changing needs.
As your business grows and your needs change, you can upgrade or buy out the equipment at any point during the lease term. In addition, There are several options for disposing of equipment after the lease term ends including returning the equipment, renewing the lease or purchasing the equipment.