

Are you a US based lessor or vendor who has clients in Canada
who want to lease? Can you handle this business?
The answer is yes but the question remains should you do it
yourself?
Let me put it another way! As a Canadian lessor I would be
very leery of attempting to lease to a US lessee. No reflection on the client
but there are a number of reasons for my concern.
- I am unfamiliar with US Federal or State laws. I am vaguely
aware that some States have a reputation of being (from a lessor's point of
view) debtor's paradises
- My documents are not designed for US law or US use
- I know I have to file a registration under UCC (uniform
commercial code) -& probably could arrange for same but am personally
not well informed on same.
- I am not registered to do business in the US and would be
deemed to be earning income and therefore subject to withholding tax at
Federal, State and municipal level
- If my lessee was unwilling or unable to pay me I face major
expenses and legal headaches in collecting, recovering equipment and if
required suing for my deficiency (& will my docs hold up in the US?)
My preference would be to call a US funder/broker to handle
the transaction. The customer will get direct contact and service as well
hopefully as a funder who understands the local scene better.
So back to the original question! In Canada
- Some western Provinces have seize or sue provisions unless
the lessee is a business and expressly waives its rights.
- Newfoundland gives the landlord the right to distrain
leased equipment on the premises
- Quebec requires the landlord be notified when equipment
goes on its premises as a basis for recovery and etc etc
- All Provinces have PPSA registration requirements
(conceptually similar to UCC filing).
- Canada if aware will require the lessee of a foreign lessor
to withhold up to 25% of the rent due (less under certain tax treaties or if
income can be argued as interest) and remit same to Revenue Canada as a
(income tax) non resident withholding tax (as the US also does). The US
lessor can offset against US tax due - unfortunately a well managed lessor
does not pay income tax - hence there is probably nothing to offset the
charge against!
- Privacy legislation introduced in 2004 requires specific
wording be signed off by the lessee.
Some US leasing Cos are active in Canada (GE Capital, CIT,
Wells Fargo)) and may be able to arrange the funding via their US office near you.
Alternatively if you are a US vendor with Canadian offices - doubtless the
Canadian office would handle for you (but wouldn't it be their deal anyway?).
Perhaps you could contact a Canadian leasing co per CF&LA member list
. We suspect you may find all of the above somewhat lethargic in their
response. You
could also contact the writer mreid@leasingcanada.com
or by phone 905-577-9922!!
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Last Updated Sunday, February 25, 2007 - Lease Inquiries to mreid@leasingcanada.com
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