Financier finds niche in North.

For many small resource-based companies in Northern Ontario, acquiring new equipment can sometimes be a challenge.

Brent Belzile, regional sales manager for Nexcap Finance Corporation's Sudbury office, describes Nexcap as an equipment finance company that leases equipment to companies and one of the oldest technology lessors in Canada. Nearly two years ago, the company decided to diversity itself from the technology field and move into construction, forestry and mining equipment.

The move into Northern Ontario recently has allowed the company to transition into financing for the resource sector.

Belzile says the client-company will identify equipment it needs, which will then be purchased by Nexcap and leased to the company for a certain period of time.

He says the company recognized a potential niche in providing financing for equipment to a resource-based sector of the economy that traditionally had trouble finding structured financing.

"Traditionally, the banks are in and out of term finance," he says. "They will follow the ebbs and flows of the economy and, at certain periods of the economic curve, they will decide they don't want to have money out for four or five years in leasing.

"Also, the bank is precluded from doing a number of true operating leases because of Bank Act restrictions," says Belzile.

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Nexcap came to Sudbury in June when Belzile bought into the company as an equity partner. Nexcap as a company has been around for a number of years and has gone through a number of different incarnations starting with Scott Capital several years ago. Nexcap in Canada is shareholder owned. The company's finances come from investment from the life insurance industry, which "adds a level of liquidity into the market." The assets purchased by the company stay on the company's books, making it what is known in the industry as a "true funder," says Belzile.

He says the company has participated in several leasing transactions in forestry and mining. Nexcap writes approximately $100 million per year in new origination.

Because Nexcap now has a presence in Northern Ontario, Belzile says companies in the North can deal with a lessor that understands their unique needs.

"If you're talking to a guy in Toronto about a scoop tram, a personnel transport, a feller buncher or skidder, he doesn't understand what it is or what its purpose is in our economy," he says. "Unless you've been exposed to those assets and understand their ability to make income like us, you're not going to get financing easily unless the financier understands that."

Company: Nexcap Finance Corporation

Service: Equipment financing

Phone: [phone]

By ANDREW WAREING

Northern Ontario Business