Equipment leasing is basically a loan in which
the lender buys and owns equipment and then "rents" it
to a business at a flat monthly rate for a specified
number of months. At the end of the lease, the business
may purchase the equipment for its fair market value (or
a fixed or predetermined amount), continue leasing,
lease new equipment or return it.
Appropriate for: Any business at any
stage of development. For start-up businesses with no
revenues, "small ticket" leases, those of $100,000 or
less, are feasible on the personal credit of the
founders or owners-if they are willing to make the
monthly payments.
Supply: Abundant. Of the billions of dollars individual and institutional investors pour into the capital markets each month, a good hunk finds its way to that use these funds to purchase equipment on behalf of small businesses. With more and more money flowing into the markets, leasing companies are flush with capital. As a result, they are eager to do business and respond to competition
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