Leasing and Interest Rates
“Interest Rates to Rise Again”. This is a headline that we have read repeatedly since March 2022. Since March, the Bank of Canada has raised the interest rate 8 times in an effort to fight inflation. But how did we get here?
Inflation has been rising and it’s problematic, no question. Factors such as the global pandemic, the war in Europe and supply chain challenges from Covid-19 have led to increased inflation rates resulting in higher prices for everyday items including homes and equipment.
To combat inflation, the Bank of Canada has sought to raise interest rates to decrease economic activity. Higher interest rates mean higher borrowing costs, and this doesn’t only affect home buyers, it affects equipment leasing, too.
Despite the inflation rate, the Canadian economic growth remains strong, unemployment numbers are relatively low and consumers have not curtailed major purchases.
All businesses have had to rethink their equipment purchases but, at this time, LFS is still seeing robust activity in the world of leasing. Leasing makes good sense when managing cashflow in an unpredictable economy combined with higher equipment prices.
If you are thinking about adding additional equipment or replacing worn out equipment, we want you to be confident of your purchase. Contact LFS and we can help guide you in the current economic climate. We can also provide you with solid business advice regarding the effect of current interest rates on your equipment purchase.
Let us help you! Contact LFS today to get started!