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E-Myth – “Why most small businesses don’t work & what to do about it”

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Part Time CFO Services | Searching For The Best Practices?

Part time CFO services | best practices when purchasing assets

Good debt is a powerful tool, but bad debt can kill you says Robert Kiyosaki, the author of Rich dad poor dad is a favourite quote from part time CFO services. Many business owners do not realize that good debt can be used to further their business, and end up making decisions to buy used equipment rather than brand-new, because they think it will be cheaper and more financially sound than buying brand new. Business owners need to take into consideration why they think buying new is better, will it help them save money on, is it easier to finance, there are several things that business owners should take into consideration when they are making that decision.

Many business owners think that buying used as an option because they have trouble getting financing. Business owners need to know, says part time CFO services that when it comes to financing, financing equipment is a lot easier for businesses rather than financing operating capital which is almost impossible. In addition to that, the earlier in the business that business owners apply for financing is better, arranging for financing at the initial purchase of the business is the best. The reason for this is as the business operates, they have the potential to run into a cash crunch, which makes them less attractive for the bank to loan money to. If they can maximize their financing potential early on, they can save their money for operating capital later.

If a business owner truly has a hard time qualifying for a loan says part time CFO services, they should keep in mind there is the Canada small business financing loan, which will loan small businesses up to $350,000 to be able to buy equipment, vehicles and even leasehold improvements. This loan is much easier to qualify for because it is being backed by the federal government. This helps banks more readily to agree to loan money to business owners when those small business owners had been turned down unconventional financing.

Another option small business owners may be considering when it comes to getting equipment, they may want to lease. Leasing isnít always the best option, if business owner can access the Canada small business financing loan, but barring getting that, financing may be a good secondary option. Business owners just need to be wary that leasing companies may often disguise their true price. They often arenít straightforward with their rates. Business owners should be wary of application fees been added or financing charges being added to the final price.

They also want to be aware that 0% financing is rarely what it sounds like, that there is a lump-sum in the purchase price that is a hidden finance rate. Leasing will never give a business owner a better rate business owners can figure out the rate would be on the least meant to asking the following questions, along is the term, what are the payments, and what but they pay if they paid in cash. By answering these questions says part time CFO services, business owners can make better purchasing decisions for their business.

Part time CFO services | best practices when purchasing assets

Business owners are able to get financing, and belief that purchasing use equipment will be a good option to get equipment and vehicles they need to run their business says part time CFO services. Business owners need to take into consideration all of the costs involved with purchasing used equipment as well as all of the variables that come with financing use equipment, so that they can make the best decision for their business.

When business owners are debating purchasing used, they need to know if the age of the equipment or vehicle they are purchasing will affect the length of their loan. Part time CFO services says that absolutely the age of the equipment will affect the length of the loan. And not for the better. Used equipment and vehicles have a shorter term, so even if they are cheaper to buy, it may not be advantageous for a business owner to take, because paying back the loan quickly is much more difficult than taking a longer time to pay back. Purchasing new may be a better option because even though itís more expensive upfront, lower rates and longer loan term is attractive and much easier for a business owner to pay back.

The next question a business owner needs to consider when they are considering new versus used equipment and vehicles is can monthly payments on used equipment and vehicles be higher than new ones? Unfortunately the answer to this question is yes says part time CFO services, use equipment may have higher rates, to help pay back the equipment faster, so even though it looks cheaper on the price tag, itís not easier for the business owner to pay back. Brand-new vehicles and equipment have lower monthly payments, and longer terms, which is much more advantageous for the business owner.

The third question that business owners need to consider, is is there a difference and operating and maintenance cost between new and used? This one is less likely to be thought about, says part time CFO services, however it is often more expensive to run as well as maintain used equipment. They are less fuel-efficient, and will need more often regular maintenance. In addition, the equipment is more likely to break down. Costing time and money for the business owner to fix, but also cautions without CFO services downtime of the business, and paying staff to do nothing while the piece of equipment is not in operation.

These are just some of the reasons why business owners should consider buying new equipment and vehicles instead of used equipment and vehicles. It may seem like a better option upfront, because the prices are cheaper, however it may cost more to the business owner in the long run, as well as the a lot harder for business owners to pay back.