Commercial Equipment Leasing
- Businesses that lease - called lessees - vary widely from small, one-person operations to very large corporations, and the kinds of equipment being leased are just as diverse
- Leasing has become the most common form of asset-based financing for a wide range of equipment acquisitions
- Leasing credit approvals are weighted more towards the quality of the asset and its generated cash flow rather than a net worth lending formula basis typically offered by traditional lenders
- Leasing is complementary to traditional banking and other financial lending
- Leasing continues to increase the pool of available credit in Canada and provides a vital competitive alternative in the financial services sector
- The Commercial Equipment Leasing industry has been managing assets and employing strategies to ensure the most productivity is gained from equipment for more than 40 years
- The risk of getting caught with obsolete equipment is lower with leasing than other equipment acquisition methods
Types of Leases
Capital Lease – or full payout lease where title to the equipment is transferred to the Lessee for a nominal amount at the end of the lease term. The primary difference between leasing and Conditional Sale Contract financing is that sales taxes are paid on each payment instead of at the time of purchase.
Operating Lease – provides for the option for the lessee to return the equipment at the end of the lease and walk away from further responsibility. These are attractive leases for those that do not want to have ownership or who prefer to upgrade regularly without having to deal with disposal of obsolete equipment.
Other Leases – can be arranged to meet the specific requirements of the Lessee. These can involve quasi-operating leases, multiple end of lease options, early out options or just about anything reasonably required to make a lease a reality.
Here are some of the reasons that leasing has increased 82% over the last 10 years.
What Can Be Leased
Here is a sampling of the types of equipment that can be leased.