WELCOME !

Thanks for dropping in for some hopefully great business info and on occasion some hopefully not too sarcastic comments on the state of Business Financing in Canada and what we are doing about it !

In 2004 I founded 7 PARK AVENUE FINANCIAL. At that time I had spent all my working life, at that time - Over 30 years in Commercial credit and lending and Canadian business financing. I believe the commercial lending landscape has drastically changed in Canada. I believe a void exists for business owners and finance managers for companies, large and small who want service, creativity, and alternatives.

Every day we strive to consistently deliver business financing that you feel meets the needs of your business. If you believe as we do that financing solutions and alternatives exist for your firm we want to talk to you. Our purpose is simple: we want to deliver the best business finance solutions for your company.



Saturday, December 31, 2011

How Canadian Government Small Business Loans Work . Is the SBL Loan For You?






Intrigued By The Government Small Business Loan?



Information on the SBL loan for Canadian business. How government small business loans work in Canada.






‘So, exactly how does it work?' If we had the proverbial nickel for every time a client asked us that question about how Canadian government small business loans work we would be .. well, you guessed it.. rich!

Because the players, the mechanics of the SBL loan are widely misunderstood it's worth taking the time to understand how this valuable Canadian business financing vehicle works.

Quite often the criticism and perceived dissatisfaction with the program relate back simply to misinformation about the mechanics of the financing.

If we had to focus in on two issues that come into play time and time again with clients its either their dissatisfaction with the timing it takes to get approved , or , even worse, the fact that they are not approved!

The Canadian government small business loan is formally known as the BIL/CSBF program, and is operated under the auspices of INDUSTRY CANADA, a federal department. Our humble opinion is that the SBL loan is in fact very well managed, but where things fall apart always comes back to clients not knowing, or understanding the very basic qualifications for the program. Winning, via an approval under the program provides you with a great method of securing long term capital for business needs such as equipment, leaseholds, computers, software, and yes... even real estate if you choose.

Not every Canadian business owner knows the cap of the program... i.e. the infamous ' how much can we get ' question! For any non real estate item the loan cap is $ 350,000.00 ( is it just us , but that’s not exactly a small amount relative to ' Small' business loan ) and if you choose to finance real estate only you can actually finance 500k , the program cap under real estate.

Once you start getting in and understanding the program you start to appreciate its true value. Why? Because it becomes readily apparent that normal traditional financing in Canada could never satisfy some of the financing needs of start up businesses, small businesses, new franchises, etc. Those 3 key business segments are by far the most popular users of the SBL loan.

From a Canadian chartered bank or commercial independent finance company it’s all about risk. So the ability to finance your business with as little risk as possible is paramount to a bank or finance firm.

That's why using government small business loans allows you to leverage your business, even if it is a start up or a franchise to 90% leverage.

Understanding of the program essentially comes back to the following point; it's simply that the government is providing a guarantee or an ' enhancement ' we could call it to your loan. So all of a sudden the bank that told you your business might be too risky is in fact able to complete your financing satisfactorily.

When it comes to our two client issues, timing and approval we can only say that if you spend some time in understanding the small handful of criteria you eliminate both of those issues nicely.

Criteria for the program couldn’t be more basic - a permanent equity injection of 10% of the financed amount (that’s the ' down payment) and clean credit history of the busines owner or owners. Other miscellaneous items are the same as any other form of traditional financing, a business plan and cash flow, some supporting background info on the owners, etc. And by the way, don't consider applying for a government guarantee if you haven’t paid or filed your taxes. That's common sense, right.

Oh, and that timing issue. If you do things right it should take a couple days, if you choose to stumble around in misinformation it will take you much longer. Fast track your loan even faster by speaking to a trusted, credible and experienced Canadian business financing advisor on the SBL loan.





Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com



Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/sbl_government_small_business_loan_loans.html

Friday, December 30, 2011

Floating A Loan? Don’t Float Alone! Funding Your Canadian Franchise Via Franchising Lenders For Funding Success!






Franchisee Funding For Canadian Entrepreneurs


Information on buying a franchise in Canada . How to overcome loan funding in Canada for your new business . Who are the lenders for your Canadian franchising funding strategy.






We recently caught an article on U.S. banking from one of our favorite U.S. websites ' Banking Connects ‘. The essence of the piece was that U.S. banks were awash in funds, but entrepreneurs were somewhat ' floating alone' in help on floating that loan!

So, let's try and ' Canadianize' that comment a bit with respect to a franchise loan in Canada, with emphasis on how to successfully loosen the purse strings of those franchise lenders for your funding needs.

Two critical components of success in franchising funding are your overall ' package ' of information, including a business plan and cash flow document. as well as owner capital .For non financial types those two fairly basic elements are still daunting though. The good news is that for very modest prices a number of solid sources to you can recommend assistance or even complete the package on your behalf. The cost by the way? Reasonable!

And now on to owner capital. If there’s one constant question we get from clients its ' How much money do we have to put into the business '.
Naturally we have the perfect answer that never seems acceptable at the outset: ' It depends ‘.

That's because the amount of money you put into the business is dictated by several areas of planning that must all come together.

They are as follows: In certain instances some Canadian or U.S. franchisors doing business in Canada might even strongly dictate how much money you have to put down. We suggest that they might be doing this by experience, knowing that past history has told them what an effective owner equity component is to their franchising system.

Funding of your franchise loan might come from a couple different sources, either an independent commercial finance firm that specializes in this type of lending, or, more commonly, the Government Small Business Loan. This requires a permanent capital amount from you in the 10% range.

Clients are always happy to hear from us that, on balance, acquiring a proven franchise is actually a favorable lending practice in Canada, if only for the fact that it removes some of the 'start up ' risk associated with opening any new business.

With the current 2012 economy on the horizon it's safe to say that entrepreneur and self employment options are clearly on the rise, given downsizing in many other aspects of the Canadian economy.

So, floating that loan! Some of the most accessible and competitive rates from Canadian lenders come via the BIL/CSBF program that more often than not perfectly suits a franchise funding need. The program is classically tailored to meet small business needs (isn’t that what a franchise is?) via great rates, limited personal guarantees, and longer amortizations, typically in the 5-7 year range.

We understand that rates for U.S. franchisees that are non bank in nature are often in the low teens these days in the U.S. . The Canadian program we've referenced has rates at least 50% lower if that U.S. comment is true.

Don't feel as a Canadian would be franchisee that you have to ' float alone' to float that (franchise) loan. Funds are available if you have a plan, some good business background in your chosen industry, and a decent measure of your own funds to commit to the venture. Speak to a trusted, credible and experienced Canadian business financing advisor today.






Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com



Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/franchise_loan_lenders_franchising_funding.html


Thursday, December 29, 2011

Downside Of Canadian ABL Asset Based Finance ? P.S. There Is No Downside! Business Financing And Lending That Works








Asset Based Lending Works



Information on ABL asset based finance. Explaining the perceived downside of lending via asset base lines of credit financing for Canadian firms.






So, which is it? We're big proponents of ABL asset based finance in Canada. So once in awhile a client pops the question. What's the question? It's ' Is there any downside to asset based financing for a Canadian firm?" Fair enough. ABL lending seems to have only good things attached to it in terms of the benefits. So about that downside...

We often hear the term perception versus reality. In the mind of the perceiver the perception is of course reality.

The world of ABL financing in Canada is in some ways fairly new. It's used by wholesalers, distributors, retailers, and manufacturers as an alternative to the commonly known ' bank operating line of credit '. One guesses that to be able to ' pan ' something and express concerns about the downside that you have to know what you're talking about.

In simple terms ABL lending in the context we're talking about it is a revolving line of credit secured by the assets of your company. Those assets are most commonly A/R, inventories, and in some cases we can throw unencumbered fixed assets and real estate into the mix. Again, simply speaking you borrow on a daily basis against the total value of all those assets once the asset value is agreed upon between yourself and the ABL lender.

So, on to that perceived downside! Many business owners and financial managers make the assumption that their firm must have the same credit quality that Canadian chartered banks require - that being profits, clean balance sheets, owner guarantees, the necessity for outside collateral on occasion, etc.

So the perception is that the downside here is that approval for ABL asset based finance is challenging. That clearly is not the case, if your firm has assets that can be financed you are in fact the best candidate for asset based lending.

Pricing. That clearly is perceived by many clients as the downside to this newer method of financing Canadian business. So, again, perception, or reality?! The reality is as follows: larger asset based lines of credit; particularly those in excess of 3 Million dollars are priced ultra competitively with Canadian banks. In some cases they might be lower!

How's that for a perception breaker?! For facilities between 250k and the, say 3 Million range pricing is done based on credit quality. In general these facilities are in fact priced higher, but in fact become the only alternative for firms that can't access any form of traditional financing at all.

‘Our company is public ' says a CFO. So we assume we can't access ABL revolver facilities?' Nothing can be further from the truth, as our ABL financing solution serves both private and publicly controlled companies, either on the TSX or Venture exchange in Canada. Even subsidiaries of U.S. companies by the way could qualify for asset based lines of credit. And in fact we think shareholders of public companies would like the idea that asset based facilities tend to grow and provide ongoing capital as the firm grows.

Fees. That’s the other common complaint we occasionally here about asset based finance. Here's where we will give in a little bit to those naysayers, as yes, there are some miscellaneous fees associated with ABL lending. But those fees only are a bit larger when we're talking about those very large revolving facilities, and in that case the pricing and access to more credit and working capital tend to offset any cost such as an appraisal fee, commitment fee, etc.

Finally, time to get approved and closed. Clients perceive ABL financing, perhaps because it’s different, as taking long to close. If you have solid reporting, can talk intelligently about your business and are prepared to commit to a new lending relationship we don't think there is any more time involved versus a bank line of credit.

So, perceptions. Realities. You decide, but be open to accessing this new method of financing. Speak to a trusted credible and experienced Canadian business financing advisor for assistance in your reality check!







Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com



Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.


Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/abl_asset_based_finance_lending_financing.html

Wednesday, December 28, 2011

Say Yes To Canadian Working Capital Solutions - Say No To Financing Cash Flow Obstacles !






Overcoming and Winning The Cash Flow Obstacle Game In Canadian Business


Information on financing cash flow in Canada. Understanding the root of your financing needs leads to effective working capital solutions .



Today the goal is fairly simple. We'll identify some of the obstacles encountered by Canadian business when it comes to financing cash flow, and, as importantly we'll demonstrate some traditional as well as new forms of working capital solutions for the Canadian business owner and financial manager.

One of the reasons we like talking to clients on this subject is simply for the fact that certain terms in financing, i.e. ' working capital' and 'cash flow' are often overworked and not properly understood.

Let's look at working capital as an example. Your accountant or your text will talk about that being the difference between current assets and current liabilities. We think a more clear way to understand that concept, and certainly a more ' real world ' one is to think of your business having hundreds of daily, weekly , or monthly ' incidents .

Incidents? Yes, incidents such as making a sale, recording a receivable, buying inventory, shipping inventory, finally collecting that receivable, etc. Those tens, hundreds or thousands of incidents change your balance sheet accounts every time, and their year end summary of activity reflects ' sources' and ' uses ' of cash flow - i.e. where it came, where it went!

Your ability to understand the ' turnover ' in your accounts will ultimately reflect your ability to address, and understand cash flow challenges, and our proposed ' fix’ re: solutions.

For a manufacturing company the process is, for example, well defined. Buy inventory... make products, sell and invoice those products, and collect your funds. It's a simple three step process right?

But what happens when your cycle of operations is long, or complicated. That's when financing challenges occur. Canadian business owners must be in a position to understand where profits went, why A/R and inventory might be done but not profits up, and where funds will be found to purchase new assets.

Misunderstanding of cash flow is rampant we feel. We read about it being a ' yardstick measure of success ' in investments. We note our financials have a ' cash flow ' statement. Our accountant gave us a ' discounted cash flow ' analysis, and we're working on a ' cash flow budget. Talk about a very convenient catch phrase!

So once we finally get a handle on understanding and addressing working capital solutions the financing of cash flow becomes a lot easier.

So what about those working capital solutions we spoke of, traditional, and otherwise. Options to enhance your cash flow needs are available to the Canadian business owner.

They include bank lines of credit, government SBL loans for new assets, which in turn save cash outflows for new assets. And don't forget equipment leasing as a solid asset finance vehicle.

Receivables and inventory can be financed via one working capital or asset based lending facility, or separately via boutique offerings through specialized commercial finance firms. More esoteric financing, yet 100% viable and effective are the monetizing of SR&ED claims, as well as purchase order financing.

So what’s our bottom line? Simply that there are achievable goals in addressing working capital expectations - but those goals must be appropriate to the specific cash flow challenge, in terms of structure and rates. Make a commitment to address financing cash flow, and speak to a trusted, credible and experienced Canadian business financing advisor on those very solutions.





Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/financing_cash_flow_working_capital_solutions.html

Tuesday, December 27, 2011

Canadian Accounts Receivable Finance ! Avoid The ‘ Fat Smoker ‘ Crisis Via Confidential Invoice Factoring






Invoice Discounting Fixes Future Cash Flow Challenges – Today!

Information on accounts receivable finance strategies in Canada . Let confidential invoice factoring take you out of crisis mode in cash flow and working capital management.





We’re the first to admit we’re always on the lookout for a solid business analogy. Enter the ‘fat smoker’ crisis as it relates to accounts receivable finance and confidential invoice factoring in Canada.

A U.S. publication entitled ‘Strategy & The Fat Smoker ‘ talks about how either in our personal or business lives we wait until we are in crisis mode before taking action. So why do business people, especially business owners or those in charge of finances wait until that critical time when it comes to addressing cash flow challenges. Can we address the problems of an overweight smoker immediately ? Rarely .

We know we will never really know why, but we can offer some solid pre – emptive strategies around monetizing your A/R into real world cash flow, the moment you generate that sale and invoice.

It’s the build up of accounts receivable and inventories which in fact cause that crisis – it might come from strong sales growth - not the worst problem in the world to have in business , right ?However when a cash flow crisis comes from a slow down in sales, that’s often a different story .

The very quick way to address the build up of A/R as it relates to accounts receivable finance is to do a very simple calculation, that being your days sales outstanding. Let’s use a quick example, and in our example we’ll focus on a quarterly number. (You can use any timeframe you wish). So we’ll take our accounts receivable level in total dollars at the end of a quarter and we’ll multiply that by 90 days, and then we will divide that number by your sales for those 90 days. Voila! You now have your DSO or days sales outstanding.

Now what? You have to benchmark that number on your selling terms, and also measure it against your days payable to suppliers and other lenders. Simply speaking if your terms to clients are 30 days, but your DSO is 88 days, and your terms with suppliers are 30 days… well… we think you see the problem!

Many Canadian business owners and financial managers see the problem, however many in fact combine the challenge of making money and having money. Again, simply speaking, sales don’t pay your suppliers, cash does!

So, if curing the ‘ fat smoker’, or in our cash our cash flow problem is the challenge, how can that be done? Invoice factoring, or its better cousin, confidential accounts receivable finance is in many cases the solution. It is a solid cure for the financial side of your cash flow and financing challenges.

Many clients we meet are forced into A/R financing – either via losing their bank lender or being unable to meet criteria for any other ‘ traditional financing ‘.

Invoice financing monetizes your A/R into instant cash flow. That heavy investment of A/R on the left hand side of your balance sheet now shows ‘ cash on hand ‘. When you qualify for confidential invoice factoring you have raised the success bar even higher, you are in a position to bill, and collect your own invoices outside the regular process of invoice factoring.

Be proactive, don’t be thrown into the fixing the ‘ fat smoker’ crisis of cash flow shortages on an emergency basis . It’s tough ! Understand your DSO and speak to a trusted, credible and experienced Canadian business financing advisor on ways to monetize what is quite often the largest asset on your balance sheet.











Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/accounts_receivable_finance_invoice_factoring.html

Interested In Why Equipment Lease Rates And Low Leasing Payments Might Not Be Important ? !






Wouldn’t You Like To Understand The Pricing Game In Asset Leasing?



Information on the key factors regarding equipment lease rates. Are low leasing payments the most important factor in asset financing . Maybe. Maybe not.






You tell us, because we sure don't know. We're talking about equipment lease rates, and why clients are almost always under the distinct impression that the concept of a ' low payment ‘ or a ' great rate ' via leasing finance in Canada is their sole focus .

We recently came across some great information on that very subject, so let's try and put that in perspective from the viewpoint of the Canadian lessee and in the context of lease finance in Canada. (It differs considerably from the U.S.! via types of leases, market players, etc.!)

If there is one major point we're trying to make its simply that many Canadian business owners and financial managers don't quite understand the difference between pricing, the proverbial ' low monthly payment ‘, and the element of ' structure ' in an equipment finance transaction.

One key factor in the concept of lease rates and pricing , and we can forgive clients for not addressing this, is the fact that many borrowers don't address the end of the lease term with the same focus as all the due diligence and effort they put into getting a lease transaction in place.

The end of term option is critical when assessing equipment lease rates, and never moreso if you are focusing on an operating lease as opposed to the alternative, the capital lease, aka ' lease to own.

Naturally the asset at the end of the lease term has value, and structuring your lease properly will significantly enhance the value of that asset to either yourself, or the lessor. (We’re on your side, ie the lessee, by the way!).

The majority of lease leasing of assets in Canada is under and unregulated financial services. So it’s up to you to determine what amount of information you need to achieve your asset financing goal.

Here’s the $ 64,000.00 question. Do lessors in Canada tell you what your options are at the end of a lease term in a proper manner, allowing you to plan in advance on asset disposition, re-financing, return of equipment, etc? We assure clients (because we've been there) that major corporations spend a lot of time on their leased assets portfolio, reporting, etc. It's in that management of the equipment lease that thousands of dollars are saved, or lost.

We talked before about how equipment lease rates and the concept of a ' low payments ' is often intermingled with other issues forgotten or not known by the lessee. What are some of those other issues?

Naturally the actual interest or borrowing rate drives a significant part of the transaction, but other factors include any payments you make in advance, including security deposits. Also, they way you structure your payments or cash flows ultimately affects the lessors yield and your overall pricing. We're spoken of the residual value at the end of the lease, particularly when it comes to operating leases, as well as other structures such as a bargain purchase option.

So, complicated? It could be if you let it. But our key take away today is simply that you should consider leasing and that ' low monthly payment ' in the context of many other factors that drive a lessors profit on your borrowing via a lease financing transaction. Speak to a trusted, credible and experienced Canadian business financing advisor about why that ' low rate ' you're looking for might not be the most important factor in asset finance.




Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com



Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :



http://www.7parkavenuefinancial.com/equipment_lease_rates_low_payments_leasing.html

Monday, December 26, 2011

Canadian Commercial Business Bank Financing - What’s Right ( And Wrong ) With Your Banking Strategy






Business Lines Of Credit In Canada



Information on Canadian bank financing . Commercial business banking strategies vary with your needs and current situation and required needs for growth or survival.




Canadian business owners and financial managers assess their commercial business banking and financing needs at different times in their company's life.

As in many other facets of business it's a little difficult to develop a solution and fix a problem if you don't understand the fundamental problem.

The need to grow your business and be profitable usually drives a bank financing need. A growing business consumes, and needs more cash, if only for the fact that you’re building up receivables and inventories.

In Canada business operating lines of credit are offered by our chartered banks. These facilities finance your A/R and inventory via specific margin calculations.

Most Canadian firms that have this type of credit facility submit monthly financials and aged receivables, which in turn create a new borrowing base under which you can draw funds. Companies that are having challenges ( i.e. they are in special loans ) or who are in breach of covenants may in fact be required to submit almost daily cash flow and receivable reports .

Although the basic arithmetic around bank financing and commercial banking is simple in reality there are a lot of other factors that might end up affecting your bank facility.

What are some of these? In the continuum of time certain industries fall in and out of favor. No better example of this is offered up than the auto industry. Other factors that you as a business owner might not like that affect your bank financing are issues such as your profits ( or lack thereof!) , they quality of business and outside collateral, and your banks insistence on personal guarantees.

Bank financing works best under the following condition - your company is expanding, but at a reasonable rate. One of the greatest ironies of Canadian business financing is that a hyper growth business, even if its generating profits, is often viewed as financing challenged by a Chartered bank.

Business banking utilizes a very basic concept that is often misunderstood by the Canadian business owner. That's simply the fact that with a commercial bank line of credit you're drawing on assets of your growing business to pay older items. But wow, when your business ceases to grow, or profit your ability to draw cash flow out of your A/R and inventory business line of credit stops. But you still have operating and fixed term payment obligations and it now becomes difficult to pay suppliers.

Companies that have a solid handle on cash flow needs and their historical working capital inflows and outflows are in the best position to manage their firms and access bank financing.

Time and time again we meet with clients that tell a very similar story - business grew, expansion plans were put in place, fixed and operating costs grew, and .. you guessed it .. sales started flattening or going down. The result - a recipe for financial disaster!

The ability to manage your cash flow, or, alternatively, slow down your business is key. Speak to a trusted, credible and experienced Canadian business financing advisor for commercial bank financing that makes sense from where your firm is now.






Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/bank_financing_commercial_business_banking.html

Saturday, December 24, 2011

Understanding the SBL . The Canadian Small Business Financing Loan Is A Winning Finance Strategy







Obtain Capital Financing You Need To Grow Or Start A Canadian Business


Information on the ‘ SBL’ . The Canadian small business financing loan provides asset financing to start up and small businesses in Canada via Industry Canada.





Understanding the Canadian Small Business Financing, aka, the ' SBL ' is not as hard as Canadian business owners, start up entrepreneurs, or first time franchisees might think.

It's those three categories of business in Canada that are typically the ' prime suspects' for success financing approval under the SBL.

So are there ways to fast track and maximize success under the program. We sure think there are. It probably begins with understanding the basic benefits and attributes of the program.

A simple overview of the basics is as follows. The program is sponsored by Industry Canada, a federal department in Ottawa. That’s exactly right where you involvement with the good folks at Industry Canada ends, because as nice as they probably are they only monitor and sponsor the program. Your actual interface to approval and successful receipt of funding is via your Canadian chartered bank, which administers and funds the program under the governments guarantee to the banks.

It is of course helpful to understand what can be financed under the program , that’s where clients we talk to have received a lot of mis communication about what's eligible and what isn't. In fact only a few asset categories can be financed under the program. They include leasehold business improvements, equipment and tangible assets, real estate (rarely used under the program), and miscellaneous items such as computer application software.

While we are often amazed at why more businesses don’t use the SBL to finance real estate part of that simply might be that some of the amortizations available might not make sense in a commercial mortgage sense.

It's therefore important that you have proper asset descriptions for your Canadian small business financing loan needs, allowing you to quickly determine if they are eligible under the program. These might be in the form of quotes from vendors, invoices you have paid already for which you want reimbursement, or quotes from prospective suppliers detailing the asset, service, or price. Just makes sense, right?

It's somewhat of a little known fact that items you have paid for can be in effect re-financed under the program if they under a 6 month timeline. In certain cases an appraisal might be required, which might come into play when there is a question about asset valuation. We point out to clients that the minimal cost of such an appraisal might actually work in your favor, as the appraisal required is usually just a fair market value appraisal.

The different asset categories don’t alter your basic rates, terms and structures under the program. They are constant. Amortizations under the loan are 5-7 years, rates are just 3% over prime, and if we had to pin down one of the biggest attributes of the program it's that clients are required to fully personal guarantee the loan.

We've hopefully demonstrated that taking the time to understand the SBL itself can save you time and maximize financing ability as well as the overall timeline to get approved, which in many cases is just a matter of days .

If your banker isn't 100% up to speed on the program consider seeking and talking to a trusted, credible and experienced Canadian business financing advisor who will put you in fast track mode on the Canadian Small Business financing Loan program






Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com



Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/sbl_canadian_small_business_financing_loan.html

Friday, December 23, 2011

Making Sense Of Franchise Loan Financing In Canada . Business Loans That Work. Business Loans For Franchising





Pitfalls and Tips on Franchise Financing In The Canadian Franchise Industry

Information on franchise financing in Canada . What issues to address for your business loan. Franchising Loans In The Canadian Marketplace.



A lot. That’s our description these days about what's happening in franchise financing. Canada has hundreds of franchising opportunities that abound; it’s just sorting through the right opportunity and matching business loan / loans to fulfill that entrepreneurial dream.

Let's sift through some of those challenges, allowing the franchisee to realize on the business ownership dream.

Many clients we talk to seem to think that a tougher economy makes it tougher to get a business loans for franchise financing in Canada. We don't necessarily feel that’s the case, if, and it’s a big if, you have done your homework and have a game plan.

That game plan includes planning, ensuring you have the expertise and sources to get your transaction completed. And all of those financial needs in many cases need to be financed differently. Those needs might include the actual franchise fee itself, financial planning that covers off your royalty fee, as well as inventory, working capital, and leaseholds and equipment.

Franchise sizes vary significantly in Canada. Many are Canadian organization, while others are units out of a U.S. parent who has a direct organization in Canada or in other cases works through a Master franchisor who has purchased a territory - Canada! (Talk about a big territory!)

Your personal resources play a significant part in your overall franchise business loan financing plan. It's important to create a personal balance sheet that allows you get a sense of your overall liquidity. Simply speaking, what you have, and what you owe.

The importance of that document can be over stated. Both franchisor and your franchising lender want to get a sense of who they are dealing with, both from a financial and business experience point of view. And by the way, your personal credit history has a huge impact on your ability to both acquire the franchise, but moreso, get it financed!

There are some interesting trends happening in the franchise industry in Canada. Many entrepreneurs are actually increasing their chances of success, (or failure) by trying to acquire multi units at the same time. We generally caution clients who are looking at multi unit deals to ensure they have the financial bench strength to go the whole process. It's absolutely critical to also ensure they have legally structured their total opportunity to ensure the failure of one unit doesn't take down their entire empire!

The other key trend we see a lot of today is that multiconcepts seem to be popular. This has the owner juggling multiple brands, typically in the QSR (quick service restaurant) industry. So if they didn't think one restaurant was enough of a challenge, how about two!

One big, now scratch that, huge mistake that franchisees make, and we see it often, is the financing of a new store out of the working capital proceeds of their other store. Inevitably Murphy's Law sets in and the resources and financial reputation of both entities are strained to the point of collapse. Our advice, consider financing each unit separately on its own merits with some additional new equity.

We can’t begin to list all the risks and rewards of a franchise opportunity in Canada. But we can ensure franchisees that careful financial planning, with expertise, is critical .Speak to a trusted credible and experienced Canadian business financing advisor on making sense of franchising opportunities in Canada. Minimize the risk, maximize the reward.





Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/franchise_financing_canada_business_loan_loans.html

Thursday, December 22, 2011

The Business Case For ABL Asset Based Lending Canada . The Ultimate Credit Revolver For Business Financing?






Considered Financing Your Business In A Different Way?


Information on abl asset based lending in Canada. Credit revolver deluxe!




The infamous ' business case '. We're told its a tool that ‘supports planning and decision making ...’ . Is there in fact such a case to be made for business owners considering ABL asset based lending in Canada via a credit revolver facility versus bank lines of business credit? We think so. Here is why.

We agree that more isn’t always best in business, that's for sure, but isn’t the fact that your company can generate more borrowing capacity based on the sole criteria of assets ( not rations, covenants, personal guarantees, outside collateral , etc) an impressive point. And remember, just because you have the ability to draw down additional working capital and cash flow on a daily basis doesn’t mean you have to use it. But boy, knowing its there has always helped.

More borrowing power is based on the same ' borrowing base ' certificates you might currently be utilizing at your bank. You assets of inventory and accounts receivable of course substantiate that base, and typically your receivables and inventories are margined at 90% for a.r and 30-70% range on inventory.

Many clients we meet have a traditional mix of A/R and inventory in some per cent age mix. However Canadian business owners and financial managers shouldn't think the A/R and inventory relationship is ' cast in stone '. It is not. You can still qualify for an ABL asset based line of credit in Canada if you just have inventory, or if you just have A/R, or if in fact you have both but one significantly outweighs the other.

Example? A good example might be a major retailer who has a huge inventory component on the balance sheet, but sells of course on cash basis, i.e. no receivables.

So is there an industry when our ' business case' doesn’t make sense for a credit revolver? We can make a general statement that all firms in Canada, regardless of size of nature of business still qualify for this type of financial vehicle. Naturally pricing, terms, and margining will always come back to analysis of the asset class.

Growing or just surviving are two very good reasons to consider ABL finance in Canada. But here’s a solid business case to be made - These facilities can also be used to acquire a competitor or strategic partner. In fact it works to your firm’s advantage to consider ABL financing for that type of transaction because it minimizes cash required to complete the deal.

So, the business case for ABL. It’s about benefits, return, and financial justification. Consider ABL asset based lending as making a great business case for your firms financial underpinning. Speak to a trusted credible and experienced Canadian business financing advisor today.




Stan Prokop - founder of 7 Park Avenue Financial -



http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/abl_asset_based_lending_canada_credit_revolver.html

Wednesday, December 21, 2011

Danger Signs ( And Solutions!) For Canadian Working Capital Financing . Real World Cash Flow Solutions







Solvency Solutions For Canadian Business

Information on working capital financing & Cash Flow Solutions for Canadian firms.



Cash flow solutions are sort of best implemented when you know what the problem is. Makes sense, right ?We're discussing working capital financing and the danger signs your firm needs to look for to both prevent and of course solve some of those problems .

The challenge in business financing many times is that both the challenges and the solutions to business financing aren't readily obvious. The good news to that story is of course that many finance challenges can be fixed with some very immediate solutions.

And there are more solutions than you might think which becomes readily obvious every time we talk to a client. By identifying working capital problems early in the cycle allows you to prevent a much larger problem down the road?

Shrinking working capital is often the most obvious problem. The irony here is that many firms are in fact growing, and profitable (on paper - profits do not equal cash!) But a combination of external factors or losses, or hyper growth all can lead to insolvency.

Many business owners view bank credit as somewhat of a blessing, if in fact they can get a business line of credit from a Canadian chartered bank. This facility allows you to borrow against receivables and sometimes inventory based on pre established margins. The quick example is that 99% of eligible business can borrow against 75% of their total under 90 day receivables.

Operating lines of credit work great if you are growing !We can say that for both traditional bank financing and non traditional solutions such as receivable financing, inventory finance, tax credit finance and monetization, etc.

A real danger sign though is when your business has stopped growing and credit facilities, both short term and long term are in place. An even worse danger sign is when Canadian business owners and financial managers use the line of credit to unwittingly mask some other problems such as issues in their organization, financial or operational mistakes, or being at the mercy of some external event - i.e. the loss of a key supplier or client.

In general if you are operating at a loss and your balance sheet accounts aren’t really changing cash flow should be viewed as trending down, and that’s a danger signal.

What about the issue that we have referenced a couple times already, strong growth? There isn’t a more classic good news/ bad news scenario. Sales are great, inventories and receivables are up, and cash is down. In fact any expert will tell you strong long term growth is better when its planned, not just happening .

There are numerous danger signs as we have noted when it comes to cash flow solutions for working capital financing shortages. In Canada these solutions include asset based lending, invoice financing , sale leaseback of long term unencumbered assets, tax credit monetization, and purchase order and inventory finance .

Speak to a trusted, credible and experienced Canadian business financing advisor on both avoiding, and oh yes, fixing those challenges.




Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/working_capital_financing_cash_flow_solutions.html

Tuesday, December 20, 2011

Caution - Danger Ahead ! IT Finance And Computer Leasing . Technology Financing Tips




Good Information Spells The Difference In Technology Financing

Information on IT Finance. Technology Financing And Computer Leasing Covered!







It's probably just us, but we think there’s no aspect of equipment financing in Canada where one small piece of info could cost you, or make you thousands of dollars. Let's cover off some IT Financing (IT = Information technology) basics. All of a sudden that cautionary road sign up ahead wont be as much of a concern.

Although the actual benefits and economics of any lease should always be considered it just seems more of a need when we are talking about IT finance for your infrastructure, computer, and even telecom needs. The challenge is actually pretty basic, matching a financial solution to those fast paced (and expensive) technology needs.

So know what you will face, what decisions you need to make now, and during and at the end of your lease financing is, well, critical!

The reality of tech financing is you have to be pretty sharp and well informed in several key areas - just knowing those areas is important. They include documentation, structure, as well as your rights and obligations in certain lease arrangements.

Hardware makes up probably the majority of dollars in computer leasing transactions. Whether it be telecom, server, pc, laptop, notebook, tablets, or even ' cloud ' type solutions that’s where the buck seem to be. Canadian business owners can finance hardware separately through 1 of the 2 lease vehicles available, or your transaction can be combined with soft costs such as application software, installation, etc.

Where hardware financing gets somewhat tricky and challenging is when it comes down to operating leases, residual values, disposition of equipment at end of term, etc.

The majority of Canadian business has financed larger computer leasing and it finance technology projects via operating leases. However, the next several years major changes in international accounting rules might well render a lot of the benefits of operating leases less effective, so it’s critical to stay on top of this development in accounting.

Although larger more sophisticated Canadian businesses have been utilizing software financing for years many smaller and medium sized businesses sometimes aren’t even aware soft costs such as software can be financed and bundled into your IT finance transactions. A good tip here is to ensure you understand how the cost of software is priced and blended into your entire transaction. It is most often amortized in full and sometimes attracts higher rates.

Medium sized and larger corporations are encouraged to take advantage of a Master Lease arrangement. A one time negotiation of terms, rights and obligations is going to save you time and dollars in the years ahead, along with the ease of simply adding on additional schedules of assets to be financed when you need them.

A common misstep in computer leasing is the failure of Canadian business to separate the financing from the manufacturer of the equipment, especially when it comes to warranties, service, and the right to use. So be careful in addressing issues separate, with the right party.

The largest benefits and the most risk in IT finance come from what happens during at end the end of a technology leasing transaction. Investigate and understand thoroughly your rights to terminate, upgrade, or renew at the end of the term. If you have entered into a capital ' lease to own' type scenario monitor your purchase options at the end of term.

Is there anything more ' mission critical ' than technology, computers, and telecom assets in Canadian business? Debatable, but doubtful don’t you think? Speak to a trusted, credible and experienced Canadian business financing advisor for your IT finance needs. All of a sudden that ‘Danger Ahead’ becomes manageable.




Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com



Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.


Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/it_finance_technology_computer_leasing.html

Monday, December 19, 2011

Understanding Receivable Financing Pricing And Rates Is Not Impossible! Invoice Discounting 101 - Now It’s Clear !






Are You Getting The Best Invoice Discount Pricing In Canada?

Information on receivable financing and invoice discounting rates in Canada. Understanding Factoring Prices .




' Misunderstanding all you see ' ; those are lyrics from the Beatles ' Strawberry Fields ' , and talk about being a bit appropriate for the confusion around receivable financing and invoice discounting rates in Canada .

So, talk about confusing... lets try and clear up some real basics around receivable finance in Canada -mostly along the lines of how it works and how it is priced. Clients are always providing their version of what they think they are getting but the reality is often far from that.

A/R finance is used by thousands of firms in Canada to address cash flow shortages when in fact more traditional financing simply doesn’t make sense or can't be attained.

A good way to clear up some of the confusion around this method of business finance in Canada is to address it head on, which is simply to say that this finance mechanism isn’t financing per se, it’s simply the sale of one of your assets at a discounted rate. So from that perspective even we own up to being guilty sometimes around the terminology!

Another way of looking at our issue to frankly address what might be perceived or real drawbacks or negatives around A/R financing. The discount rate used on receivables when you sell them, in Canada, ranges anywhere from 1-5%. To be fair, the average discount rate tends to be in the 2% range.

Invoice discounting rates make the most sense when they are used to take advantages of opportunities for growth and higher profits and sales via asset turnover.

Part of the reason A/R finance is viewed as confusing by many is that it’s essentially part of an unregulated industry. Clearly our banks are regulated and you know what you get (when you can get it!)

So what does that all mean to Canadian business owners and financial managers. Simply 4 words. Pick a solid partner! Or advisor.

Where invoice discount financing gets confusing is in the terms/contracts, and the rates.

So how do you address that pricing in terms of benefits? Several factors have to be taken into consideration. They are the quality and age of your receivable portfolio, the ' opportunity cost' of what you can do with additional cash flow, and the actual cost of carrying your receivables and inventory as opposed to monetizing them more quickly via a receivable financing strategy.

As we have said in the past carrying receivables anywhere from 60-90 days can easily cost you anywhere from 10-20% when you factor in days to pay your firm, admin costs, lost opportunities, your current financing costs, etc.

So why do Canadian business owners and their finance staff stumble on the issue of receivable finance. It’s partly, as we have shown due to their inability to overlook the total pictures in the areas we have demonstrated above.

Invoice discounting rates makes the most sense when you look at opportunity cost. If you finance your receivables as you generate them you lower the balance sheet investment and reduce your day’s sales outstanding.

A quick example - if your annual sales are 1.2 million and your daily sales are $3300 per day for example you could add $10,000 to cash flow by a 3 day reduction in DSO. A 30 day reduction adds 100k to cash flow!
Charges or costs for a 100k per month facility equate to a 2k per month cost if you are turning your A/R promptly.

So, confusing. We hope not, although we're the first to admit it takes a bit of time. Speak to a trusted credible and experienced Canadian business financing advisor for clarity on achieving best invoice discounting rates and benefits for your firm.



Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :



http://www.7parkavenuefinancial.com/receivable_financing_invoice_discounting_rates.html

Sunday, December 18, 2011

How Competitors Beat You At Vendor Finance and A Customer Financing Plan For Your ( Lost ) Clients





Considered a Canadian Client Equipment Or Service Financing Program ? Here’s How - Easily!


Information on benefits of vendor finance . A customer financing plan increases sales, cash flow and market opportunities.




Here's the problem. You don't have one, your competitors do. We're talking about a customer financing plan for your products and related services. And can we all agree that a competitive disadvantage is not a good thing, which is why Canadian business owners and financial managers might well want to consider a vendor finance program for clients/

So how exactly does Canadian business benefit from the ability to offer customer finance solutions for clients. If we had to sum it all up into one thing we guess it well might be: ‘Increasing the sale of your products '!

The good news is that a customer finance program can be easily put in place either directly, if you have the experience and resources, or as importantly, indirectly via a solid partnership arrangement. And if you choose the partnership arrangement you can pretty well reduce the cost of your program to zero, which is a great price point, wouldn’t you agree?!

The key concept around a financing program for your clients is essentially that it is a strong sales tool. Companies in Canada that use vendor financing tend to form over time stronger relationships with their clients. While the finance industry itself tends to portray this type of program as a ' control mechanism' on your clients in our opinion its more of a customer relationship scenario. but we'll let you decide that one.

It all starts of course in your firm’s sale cycle, and hundreds and probably thousands of firms that utilize vendor finance tools quickly find that simply offering a finance option in many cases gets that purchase order or commitment from your client. Unbeknownst to you clients might well be talking to your competitors about their ability to offer a finance option on the same products and services you are competing for.

Also, at the same time a financial firm who is aligned with your competitors might in fact be pitching your competitor’s product versus your own for their own selfish reasons.

One of the strong merits of a customer financing plan always comes back to the relationship cycle, because even after you have provided your client with a customer financing option the flexibility around financing options allows you to constantly work with your client on upgrades, add- ons, Using a basic ' master lease' allows you to constantly add on new sales and services to your existing arrangement with clients.

Ever wondered how your competitors sometimes seem to have made a sale to a major client in a much shorter sales cycle. If you investigated closely you might just find that your client was less focused on price simply because he was being offered a financing option via vendor finance that made sense and was quick and easy to facilitate.

At the end of the day you can devote money, time and resources to setting up your own program. In many cases that requires a major commitment of time, capital, and oh yes, you have to know what you are doing.
A strong alternative? Work with a qualified third party to set up your own customer financing plan at no cost, at the same time customizable to your own firm’s products, services, and needs.

Speak to a trusted, credible and experienced Canadian business financing advisor on a program that works best for your firm. All of a sudden you may well find that you are now winning and regaining lost clients and sales otherwise not achievable without a finance solution.





Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :



http://www.7parkavenuefinancial.com/customer_financing_plan_vendor_finance.html

Saturday, December 17, 2011

Chimp Simple! Explored The Canadian Government Loan? Get The SBL Guarantee Difference!







Why Not Your Business ? Why Not Now?

Information on the Canadian government loan SBL. Use their guarantee for your business.




Chimp simple? That comment came from a client the other day, and we can think of no better way of using that expression for the Canadian government loan program, aka the ' SBL ‘. (Small Business Loan). And as you know, the old expression is ' even a monkey could ...’!

So is there a way of addressing the SBL government guarantee program in a way to actually keep it simple... and quick? We sure think there is, and here's how.

Most business owners have finally realized that local bank approval of your business financing loan rarely is local anymore. In fact it never is period. What complicates this matter further is that while the Canadian government SBL loan is sponsored by the gov't in reality the banks run the program. Therefore you have to know what you are doing to effectively and quickly move through what many perceive as a complex process. Trust us... it is not!

Once you understand the players you're now in a position to understand the process. So focus on a solid loan package that will be easily evaluated by your banker for submission under the government SBL guarantee guidelines.

Just to clarify, you are only personally guaranteeing 25% of the loan, and the government guarantees the majority of the loan to the bank. Simple so far, right.

All that's left is the basics which we maintain is not complicated at all. Those basics include a basic business plan or very strong executive summary, some cash flow forecasts (bankers love them, trust us on that) and some very traditional what we will call ' back up' info on yourself and your business - items such as your personal net worth form, confirmation of no tax arrears, and your ability to demonstrate that you run your personal financial life in a responsible and reasonable manner. (That is validated by your credit bureau report)

So as we have demonstrated here , there is no long chain of approvals here, just the recommendation of your banker , the completeness of your package, and a final review by an underwrite you will never meet .

So why are we trying to satisfy someone we'll never meet. Simply because if you have properly addressed the 4 or 5 key things you need to support your loan request there should be theoretically no reason for an underwriter to not approve your loan. In Canada currently SBL guarantee loans max out at $ 350,000.00 and cover a variety of financeable assets such as equipment, leaseholds, application software, computers, etc.

So why do many clients share experiences of unsuccessful Canadian government loan approvals. We put that down to communication.

You simply haven’t communicated a strong package that you and your banker can articulate as having the small handful of basics required for the program. And at rates, terms and structures equal to those of larger firms you can’t afford to not get this financing that otherwise might not be available under normal borrowing circumstances.

So, is it all really Chimp simple?! We still maintain it is, so speak to a trusted, credible and experienced Canadian business financing advisor who can put you efficiently through the process and on the road to small business financing success.




Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/canadian_government_loan_sbl_guarantee.html

Friday, December 16, 2011

Want To Buy A Franchise? Need A Loan ? Here’s Your GPS to Loans for Franchises in Canada!






A Roadmap To Successful Canadian Financing For Franchises


Information on the proper method of obtaining a franchise loan in Canada . Loans for franchises are significantly different than regular business loans. Use this information as a roadmap and guide to franchising success when you buy a franchised business.






So... you want to buy a franchise. Why then our analogy to a GPS system? Simply because that type of gadget these days provides you with a road map for not getting lost, and from our perspective getting a franchise loan is the last place where you want to be lost and not knowing your position . Make sense? We think so.

Loans for franchises in Canada can be a combination of an exhilarating process and a frustrating one - the former referring to being approved and the latter referencing our conversations with clients who have been frustrated by the process.

Let share some solid ' road map' type information on ensuring you minimize the time and risk when you buy a franchise and consider a franchise loan. The reality is that in many ways we could make a case that ownership via a franchise business is actually significantly less risky that other types of businesses which are viewed as 'start up ' in nature.

The challenge becomes knowing which institutions and programs will make your franchise investment happen. It's a common fact that a large majority of business funding requests by entrepreneurs fail simply because they are poorly presented. So knowing how you can easily prequalify yourself, and putting together a basic package that presents yourself and your new business in the best manner is well, worth its weight in ' money ‘!.

In Canada franchises can be financed from a turnkey point of view, or in some cases you may wish to acquire a franchise from an existing franchisee in the system you are looking at. It's ironic, but one of the lesser know but larger challenges in the Canadian landscape is the ability of current franchisee's to add additional units to their first location .

So is it possible to prequalify yourself? We assure clients that a large part of that process can be done by themselves. They must demonstrate some level of either specific industry or general business experience, while also showing the lender that they have run their personal lives from a financial perspective in a manner that reflects solid stewardship. That means having a solid credit bureau score (650 tends to be the magic number) and it certainly helps to have assets such as a home, savings, etc.

We don’t suggest or recommend to clients that they leverage all or a very large amount of assets when considering loans for franchises. But certainly anywhere from 10-50% of a purchase price typically needs to be covered off by the franchisee. That’s your ' owner equity '.

You establish the amount of financing you need by putting together a fundamental business plan around your opening balance sheet. That will reflect your own cash investment, funds you have spent already, and what is needed to get you to a turnkey grand opening! That typically is equipment, leaseholds, perhaps real estate, etc.

In Canada franchise loan financing is generally done via an independent commercial finance company or the bank. But when we say the bank we are actually referring to the CSBF program which has provided thousands of franchise loans at terms typically enjoyed by established businesses.

So is there a guaranteed GPS road map to a business franchise loan. Never 100% but you can get very close to that by pre qualifying yourself realistically, putting together a solid package, and ensuring you know who finances loans for franchises in Canada. Speak to a trusted, credible and experienced Canadian business financing advisor for access to your road map for financing success.



Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/franchise_loan_loans_for_franchises_buy.html

Thursday, December 15, 2011

You’ve Got Questions . We’ve Got Answers . The ABL Asset Based Lending Facility Is The Credit Revolver Loan You Need





Business Lines Of Credit Spell The Difference Between Failure and Success

Information on ABL asset based lending in Canada . Common questions and straight forward answers on a credit revolver loan for your company .



Being well informed in any area of business is critical, and business financing is certain an area that comes under that category. Lets examine 5 typically client questions on ABL asset based lending in Canada, and why this type of business credit revolver loan (it’s not a loan by the way) can help your company through growth and or challenging times.

Question # 1 - It’s a simple one. What is ABL? The term is actually used in many ways ( ABL = asset based lending ) but in our context today is a revolving credit line which Canadian business owners can draw down on . Collateral for the facility is typically your A/R and inventory, but can include miscellaneous assets such as equipment, real estate, tax credits, etc. All these assets are collateralized and become your firm’s new line of credit facility based on the ongoing fluctuating values.

We said an ABL credit revolver loan was not a loan per se, and that’s an important distinction. No debt appears on our balance sheet, you are just monetizing current assets on an ongoing daily basis. Canadian business is graduating more and more to ABL types of business credit if only for the reason that it gives them more borrowing power than a traditional Canadian chartered bank business credit revolver.

Question # 2 - Why in fact are businesses moving to or considering this type of facility? Our answer here is pretty simple, and we have touched on it already. It’s the fact that you now have the ability to generate cash flow more quickly to support growth. Your firms new found ability to create faster asset turnover increases profits. It’s a solid alternative to borrowing via long term debt, of the dreaded giving up of owner equity, never a great solution for business owners. We point out also that pretty well every firm in Canada that has business ' current assets' is eligible for some form of asset based lending . Small facilities tend to be 250k and up but the large mega corporations in Canada also use this method of financing, there is no discrimination when it comes to an ABL revolving loan. And by that way, that includes public companies also.

Question # 3- Is the difference in new credit facilities actually worth considering the move to an asset based line of credit facility? We're biased of course, so you decide. Typical bank credit lines margin receivables at 75% and inventory anywhere from zero (yes zero) to 50% typically. ABL facilities get you approx 90% of A/R and inventory financing can go as high as 70% in many industries, depending on your type of inventory.

Question # 4 - Our company is having some challenges in a number of areas, are we still eligible. The answer is a resounding yes, yes, and yes! Whether you are a start up, established, or even in bankruptcy or receivership proceedings (you heard us right!) you are always eligible for this financing, as long as you have one thing - Assets!

Question # 5 - Where can we find out more? Speak to any trusted, credible and experienced Canadian business financing advisor on the merits and tangible benefits of ABL asset based lending. There is no better way to finance your firm in current times.



Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/abl_asset_based_lending_credit_revolver_loan.html

Wednesday, December 14, 2011

Business Lines Of Credit Make The World And Your Company Go Round! Canadian Working Capital And Secured Facility Information .





Smart Businesses Have A Business Line Of Credit

Information on business lines of credit in Canada . How does a secured facility work and why is it necessary to have a working capital revolving credits.




Did you hear the one about the Canadian firm that went out of business because they were too profitable and growth was great? That's an ironic statement to many business people, but the reality is that profits don’t equal cash flow and business lines of credit via a secured facility is the capital you need to survive all that success .

It's actually pretty simply when you think of it but because your firm has made that investment in accounts receivable, inventories, and other working capital assets you need operating loans to make your business work - on a day to day basis.

It's pretty safe to say that if you running out of cash or working capital, whether you're a FP 100 company in Canada, or all the way back to a start up is a concern for any business person , And of course the business papers are full of those stories everyday .

So that’s put us squarely in front of the bank with the proverbial tin cup in hand !Yes there are numerous alternate sources of cash flow and working capital, but our focus here is on bank secured lines of credit . Oh, by the way, there aren't really business banking unsecured lines of credit for your business, so we're in a narrow field here!

Canadian chartered banks do it a bit differently when it comes to operating lines and lines of credit. They take an assignment of your assets (just in case!) and wrap this security agreement into a demand loan type arrangement. These are typically reviewed on an annual basis.

How much you ' get ' from your secured facility is, in general, pretty standard. Typically that’s 75% of what is called your ' eligible ' receivables, which are those clients of yours under 90 days and within North America. On occasion clients that have extensive foreign receivables are required to compliment business lines of credit with export credit insurance from government organizations such as EDC and some other private firms.

Inventory margining under business lines of credit is a bit trickier. It is rare you can achieve 50% borrowing value, and all sorts of analysis might be required on the type of inventory you wish to finance.

Giving due credit to the banks its safe to say that any type of inventory financing for capital purposes is risky, and any lender rarely gets back what they have loaned out on this asset class.

One of the areas that work well under a secured capital facility is that your borrowing is your own business. There are no client notifications, and your customers would really only be notified in the event of a default by your firm. In this case your customers would be asked to pay the bank directly, which only makes sense.

If there is one danger area in a business line of credit it is simply the fact that your business should use these funds for short term working capital. Taking these funds you have borrowed on a short term basis to buy equipment or make longer term corporate investments generally leads to problems.

If you're uncomfortable with banking terminology, which banks offer what business services, or want to learn about any potential downside in business banking consider speaking to a trusted, credible and experienced Canadian business financing advisor.




Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/business_lines_of_credit_secured_facility_capital.html

Tuesday, December 13, 2011

Getting The Most Out Of Canadian Lease Pricing and Best Lease Rates? Here’s How Capital Equipment Finance Works






Canadian Lease Financing – Rates and Terms



Information on capital equipment financing in Canada . How can Canadian firms attain best lease rates and lease pricing that is attractive for asset acquisition finance strategies.




How can we get the most out of lease pricing, including by the way getting best lease rates in Canada what we access capital equipment finance via an equipment finance strategy? That’s a typical client question and we'll explore some answers, tips, and strategies in that area.

If there is a threat or disadvantage to equipment financing in Canada it’s a pretty simply one - being unaware of what areas can impact the advantages of a lease, for example a simple ' end of term ' option.

We wouldn’t want to count the probably thousands of firms in Canada, both small and large that fail to both understand, and then invoke their financing option when the lease ends. Ironically the more sophisticated and larger corporations in Canada even do worse on this one simply because they are too big and their systems ' forget ' whats going on within the tens or hundreds of equipment leases they manage.

So how can an end of term option be costly ?You quite frankly wouldn’t believe it, but the reality is that many leases are structured , and documented, by the way to make your firm keep paying if the notice or obligation you signed up for isn’t handled properly .

So by not returning, buying, or formally extending a transaction you are now in the position of pretty well ‘paying forever’. And that’s not a good thing. Imagine leasing, for example, a 25k large document copier or some other business asset, paying for it in full of 5 years, with interest of course, and then paying for it again. Wow! Oh, and by the way, that asset has depreciated and has been replaced by newer technology. Now how do you feel?

In Canada the Canadian capital equipment finance industry, the ' lessors ' are in a position to offer you a variety of pricing options. It is that variety of options that can really confuse Canadian business owners and financial mangers.

You can simply lease pricing in Canada , and achieve best rates at the same time by doing some basic homework around the two types of leases , capital ( aka lease to own ) and operating ( aka lease to use ).

If you are looking to finance assets that depreciate quickly or must constantly be upgraded to keep you company ahead of the curve then an operating lease strategy really works - Computers and computer systems are a classic example of a solid use of an operating lease . The benefits include lower monthly payments, return and upgrade flexibility, and your ability to simply replace the system or technology at the end of term. That’s when best lease rates are truly achievable when compared with lease to own type strategies.

Simple lease finance strategies can also lower that monthly payment - they might include a bargain purchase options at the end of the lease, which simply lowers your monthly payment and allows you potentially to refinance that end of term amount later on.

In Canada your interest rate on lease financing is determine by your firms credit quality, as well as the type of asset you lease, and who you are dealing with. The industry is very segmented and fragmented, so the right lessor as a partner can save you thousands of dollars over the term of a financing relationship.

To achieve best lease pricing, as well as terms, speak to a trusted, credible and experienced Canadian business financing advisor who can help you maximize the benefits of this powerful capital equipment finance strategy used by thousands of business owners everyday.





Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/lease_pricing_best_rates_capital_equipment_finance.html