Mastering Business Financing and Lending Sources : A Comprehensive Guide for Entrepreneurs

 

YOUR COMPANY IS LOOKING FOR SOURCES OF BUSINESS FINANCE ! 

Unlocking Your Business Potential: Exploring Business Financing and Lending Solutions

You've arrived at the right address! Welcome to 7 Park Avenue Financial 

        Financing & Cash flow are the  biggest issues facing business today

                              ARE YOU UNAWARE OR   DISSATISFIED WITH YOUR CURRENT  BUSINESS FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

 

Discover the Power of Business Financing and Lending: Fueling Growth and Expansion for Your Company

 

 

Business financing! You've heard the rumour, namely that business lending is more available than ever. Whether it's small business funding or medium to larger corporations we hear capital is almost unlimited.

 

INTRODUCTION

 

For any company in Canadian the ability to access business financing lending solutions is critical, more so for the SME sector which always has a capital challenge. Proper financing and access to capital help businesses overcome growth challenges, allowing companies to seize opportunities that arise.  Understanding what business loans are available and what the benefits of financing are is key to considering traditional and specialized alternative financing solutions for business needs.

 

 

UNSECURED  BUSINESS LOANS - CANADIAN  BANKS 

 

Unsecured business loans in Canada do not require the borrower to pledge specific assets as collateral - Banks focus on an overall view of business and owner credit history, with a focus on profits and business cash flow projections.

But for those firms that for a variety of reasons can't qualify for all or even some of the financing they need from traditional sources such as Canadian chartered banks, there is hope - in the name of asset-based financing options.

 

WHAT STAGE OF BUSINESS IS YOUR COMPANY IN?

Let's backtrack a bit and understand that a company, from a lender's perspective, will always be identified relative to what stage of the company  ' life cycle ' it is in.

 

That might come in several stages, going all the way back to pre-sales revenue r&d  to initial start-up. It's a long journey to that ' high growth' stage. And it's not hard for the entrepreneur to dream about that final stage of business maturity where traditional financing sources are unlimited.

Have we forgotten anyone? Yes, we have, and it's prudent to mention that many companies, for a variety of reasons, are financially challenged and have poor financial performance and some serious cash flow or debt problems. Suffice it to say the good news here is that even these firms can be financed or re-financed, as numerous alternative-based finance solutions are available.

Many firms often find themselves in the position of taking on larger orders or contracts that typical small business funding solutions can't deliver on.

 

 

Purchase Order Financing  - This is an increasingly popular method for a company to support purchase orders or contracts from new or larger clients. Without having to raise new equity or debt your order is financed by the lender based on who your client is and also ensuring you have a legitimate supplier. This financing can be achieved very quickly and makes sense when traditional finance doesn't work.

Accounts Receivable Factoring -  This type of finance allows you to cash flow invoices immediately after you make a sale or deliver your services. The general creditworthiness of your clients allows you to get advances on your sales typically in the 80-90% of the invoice value. Naturally, this eliminates waiting to get paid, which these days seems to take anywhere from 30 to ..dare we say it.. 90 days!

Businesses should investigate Confidential Receivable Factoring  Financing - allowing businesses to achieve all the cash flow benefits of factoring and a/r finance with the ability to bill and collect their own invoices.

Simply speaking A/R financing is a cash flow accelerator!

 

  

SECURED  BUSINESS LOANS / ASSET-BASED LENDING  

 

Asset-based financing solutions allow companies to pledge specific physical assets of the business such as accounts receivable, inventory,  fixed assets and equipment, and commercial real estate owned by the business. Thousands of small businesses in Canada are gravitating to alternative finance solutions.

Non-Bank Business Credit Lines -  Alternative financiers offer credit lines based on your inventory, receivables and equipment as a lump sump collateral. In our experience, these credit lines almost always exceed the amount you would receive under typical bank margining of these assets.

 

  

START-UP LOANS / SMALL  BUSINESS LOANS, AND GOVERNMENT LOANS AND GRANTS  

Starting and growing a business is always a challenge - most early-stage businesses lack business assets as well as the track record that a business lender is looking for. Business plans are essential and will include information on the company and business model,  information on owners, and projected sales and profits - 7 Park Avenue Financial prepares business plans that meet and exceed lender requirements.

Small business loans of various types, both traditional and alternative can provide the cash a business needs to grow or improve production via new assets or technology. Financing is also available in the form of inventory financing, leasehold improvements finance,  and acquisition of assets.

 

 Government Loans and Grants - Canada Small Business Financing Program (CSBFP) 

 

Government loans and grants are always available for funding a business - they are attractive to many business borrowers as loans are typically unsecured and have favourable repayment terms and competitive interest rates. Qualification criteria also easier to receive credit approval compared to traditional chartered bank financing.

 

The Canada Small business loan program is available for any business with under 10 Million dollars of actual or projected revenue. The government bears the majority of the risk with bank and credit union lenders that participate in the program.

 

The loan amount cap on the program is 1.1 Million dollars and recent changes in 2022 to the program greatly increased financing capability, with companies being able to borrow under a term loan structure, as well as lines of credit and working capital and funding of intangible assets. Traditional uses of the program have been the ability to fund leasehold improvements, new equipment purchase assets or technology, as well as acquiring real estate. A business loan calculator will allow simple calculations around monthly payments, amortization, etc. A minimal personal guarantee is also a favourite part of the program.

 

Talk to the 7 Park Avenue Financial team about the government SBL program and the application and process around this popular method of financing business from participating financial institutions,

 

CONCLUSION -  BUSINESS FINANCING BUSINESS LENDING FUNDING

 

As a business owner, you need to understand the different finance options available to grow and succeed in the ultra-competitive markets of today.  Selecting the right lending solution to support growth is key - whether you are looking to fund day-to-day operations, access government loans and grants, buy a competitor, etc. Knowledge of the business lending landscape is key!

 

If your business is growing, or even experiencing challenges investigate non-bank solutions that will allow your firm to be in a  constant position to access capital based on specific needs.

 

Seak to 7 Park Avenue Financial,  a trusted, credible and experienced Canadian business financing advisor who can assist you with business advice and success in achieving business lending solutions.

 

  

  

FAQ: FREQUENTLY ASKED QUESTIONS  / PEOPLE ALSO ASK  / MORE INFORMATION   

 

  

  

What are the best possible sources of business financing?  

 

The best possible sources of business finance include:

Bank loans

Government Loans / Grants

Venture capital/ angel investors

Supplier Financing/ trade credit

Invoice Financing / Factoring

Personal savings / Friends and family

Business credit cards

Short-term working capital loans - lump sum payments via monthly payment based on sales/owner personal credit score - higher interest rate but quickly accessible financing

 

How do you finance business growth?

 

To fund growth and expansion businesses  should investigate:

Reinvestment of earned profits  - they do not bring debt to the balance sheet and do not dilute owner equity

Bank financing for cash loans,  equipment purchases and working capital

Government-guaranteed loan programs 

Business Credit Line Needs ? ABL Is The Bank Alternative

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The business credit line in Canada. Clients we meet to can visualize it... they sometimes just can't access it - it's almost as if it’s an ancient art they haven’t quite perfected. As a result... cash flow and working capital challenges. Does it have to be that way? We think you know the answer already... it doesn't and here's why. Let's examine the ABL bank alternative.

Clients at 7 Park Avenue Financial find asset based lending is the perfect credit line when traditional financing is not a good alternative or an alternative at all! This type of business credit line has some cost benefits to is, as well as having a large amount of flexibility. Additionally you self manage the facility to a large degree with no intrusion required into your suppliers or clients. Many companies have a measure of seasonality to the business, so ABL, ' asset based lending ' addresses that very well as limits are quite flexible and can be adjusted to your needs. 

 

Alternative funding  via ABL  asset based loans is clearly becoming the bank alternative and is widely used in the United States where this type of business financing originated. Focusing on the liquidity of key current and fixed assets these credit facilities have become the business finance alternative for borrowing for operating facilities. Some business owners will be surprised to know that ABL LENDERS can also be banks, as these unites operate as smaller boutique financing lenders within the traditional banking system, both in the U.S. and certainly in Canada.

We can make the business case that ABL Lenders are more comfortable in lending to many firms when banks either won't or cannot simply because they are experts in collateral value and have the ability to adjust the line against the credit lines they have set. One expert has called it ' real-time ' lending!

Business credit lines via  ABL finance lending are attractive to Canadian businesses seeking financing for a variety of reasons in almost any economic time, pandemics included. In fact, asset based lenders for the most part continue to fund business which has significant value to firms looking to access cash flow or to achieve more financing than they could otherwise achieve through traditional sources. Even companies that are restructuring are able to source business credit line arrangements based on assets.

The ability to have a source of credit that is creative and flexible will almost always provide greater liquidity to your company, with less reliance on the banking covenant based lending championed by Canadian banks. That's the business lending that 7 Park Avenue Financial clients tell us they want. The trade-off to the typically higher cost of an ABL line is increased access to capital, notwithstanding your obligation to be in a position to report more regularly on asset values such as a/r and inventory, which most firms should be looking at anyway, right?

For this type of business credit line to be successful your company has to have the ability to create the usual management reports that highlight your asset accounts so that typically would be aged receivables, payables, and inventory lists. That allows you to successfully manage and access this creative way of financing your business.




Part of the challenge of those business credit lines is simply the fact that the majority of business owners and financial managers are fairly focused only on one solution - which is of course the commercial bank line of credit.



That is definitely one solution. The other (What? There's Another?!) is a non bank asset based credit line facility. Both facilities monetize your receivables and inventory... the difference then? ... The Asset based credit line often monetizes and equipment and real estate also; as part of your overall borrowing power. The big difference is the real key point here - lending is more generous in a non bank asset credit line. Receivables and inventory are margined more aggressively, and in bank scenarios rarely are your unencumbered fixed assets monetized into credit lines.

Why Should Your Company Consider An Asset Based Lending Business Credit Line?

Most small and medium-sized companies in Canada recognize that Canadian banks cannot meet all their borrowing needs. This might be for a variety of reasons which include profitability, an industry being ' out of favour ', or the actual financial results of a company which might not have the balance sheets and income statements they require to lend against, given the banks are both regulated and somewhat risk-averse relative their fiduciary responsibility to shareholders and depositors. It is a true irony of Canadian business that banks generally do not like a firm growing, for example at 25% per year, which then requires constant working capital needs.

Because non bank business credit lines have your borrowing against sales and assets there is not the concern of higher growth, which is in fact: Encouraged ! More cash availability than standard bank offerings is the cornerstone of borrowing against your sales and core assets. It's not about the financials, it's about sales/assets.

As we have noted the thousands of companies using asset based credit lines in Canada use it for different purposes. Some companies might be early stage, some might be in high growth mode, while other companies that are in fact bank worthy utilize it because rates in the case of high quality companies can be very competitive to low bank rates. Naturally, the current low rate environment for business borrowing in Canada is a plus for all borrowers. 

 

Some firms that are experienced a level of distress might be using the facility simply based on the amount of their assets that still qualify for borrowing under a credit facility. These companies might find themselves in the ' Special Loan ' category of the bank. This can be a stressful transitionary period on the road to business financial recovery - asset based financing works very well to correct the financing and allows a company to get back on track. 

At this point customers would already be reporting on their financial more often and assessing a workout plan that might get them back into traditional banking, or on the other hand, transition their senior lending facilities into asset based business credit lines. They might still well be 100% financeable with having to raise additional equity or outside collateral. It allows troubled firms to protect the company with a workout refinancing that makes sense, often paying out the bank in the process.



The options and financing flexibility alternative your firm now has allows you to successfully operate on a daily basis. As your revenues grow your receivables and inventory will always fluctuate relative to business grwoth and how you manage your current assets. Those daily changes drive the ABL credit line. Many firms that are in high growth / hyper-growth find they cannot satisfy traditional bank requirements, with the asset based facility focusing on your sales and assets, not financial statement ratios within your balance sheet or income statement.

By allowing your financing partner to properly assess asset values and growth potential, allows you to borrow effectively on the true market value of your sales and assets. As an example receivables are typically financed at 90% and inventories are margined based on the type of inventory your firm has. It should be noted that many industries are different when it comes to quality and type of assets, your facility will resemble the industry norms around types of assets. Both banks and asset based lending firms recognize specific aspects of your industry.

The two main sources of borrowing in this type of credit line are your receivables and inventory. They are the main drivers that determine the amount of your facility but there can easily be a fixed asset/equipment component to the borrowing for all the hard assets your firm owns.

The true strength of this type of revolving credit is that it can grow as your sales revenues and other assets grow - they in fact determine the amount of the credit line. There are some very simple formulas around how these assets are margined for lending. As your sales grow and you collect your receivables the ABL business credit line fluctuates, allowing you to borrow less .. and finance less, or, more importantly, borrow more if you need it!

We have referenced those other assets you can borrow against within your credit facility, with those two asset categories being equipment and, if applicable, real estate. Those amounts have a value assigned to them at the start of your facility working, which might include an outside appraisal to determine maximum borrowing power. Naturally these two categories of assets are typically not in Canadian chartered bank business credit facilities, so they highlight the benefit and flexibility of revolving ABL facilities.

Many companies that are unable to satisfy bank covenants, ratios, outside collateral etc find they can easily double their borrowing power using the high borrowing leverage of a/r, inventory, and equipment/real estate. That becomes the ABL business credit difference, a business finance solution that is tailored to your company's specific needs. Your credit line availability is calculated on an ongoing basis, allowing you to plan for your business cash flow needs - at the end of the day is ' quicker borrowing '.

Accounts receivable plays a major role in the asset based business credit line model. Your financing firm will focus on the type of receivables you have, average size, major account concentrations with any one customer, account contras with suppliers that might be in place, as well as your a/r days sales outstanding turnover and bad debt. 

 Businesses should also be prepared to demonstrate that CRA and provincial HST  is not in default, but borrowers in default will be happy to know that these type of debts are often paid out of the first advance in ABL business credit lines by  asset based lenders.

The use of your business credit line in Canada, whether it's a bank line of non bank in nature can be viewed as a ' replenishment ' of cash from funds your firm has invested in working capital and fixed asset accounts. That need becomes even more acute when your business is growing. The simple reason - you've got more sales tied up in still uncollected receivables, inventory, and the need for some fixed asset or technology replacement here and there!





Whether you disagree or not, all banks have very specific rules in Canada around business credit lines. Bank credit lines for start-ups or very new businesses in Canada essentially... Don't exist! That’s because of our strong banking system in Canada places a large emphasis on historical strong financial history, solid profits, and squeaky clean balance sheets. So while corporate credit risk at banks for the middle market companies in Canada at banks focuses on profit, cash flow generation and shareholder equity ABL  has a focus on asset turnover and turning business assets into cash. We can say that the shorter-term operating cycle of a business is what drives asset based loans.

Business owners if not familiar with The Cash Conversion Cycle would benefit from checking it out.It is really tied into the concept of cash flowing your working capital assets and how turnover affects liquidity and the need for more outside business credit. The continual revolving ability of a credit line works without your firm being tied to any type of installment and loan debt. Here the power of ABL kicks in because as sales revenues grow cash flow via the abl line increases and receivables and inventory are liquidated.

If your firm is offside on banking requirements it's still exceptionally very safe to say that you qualify for an asset based credit line from a non bank commercial finance firm. And that higher leverage and borrowing power is still there of course - it’s another major appeal of the ABL (Asset based Line)



By the way, if you are in fact 'off side' with your bank on their key metrics, ratios, covenants, and collateral issues the ABL line rides to the rescue more time than you think. So while your business may have temporarily stumbled the non bank asset based line of credit steps in to keep cash flowing and working capital working! Their are different credit types and credit risk and the asset finance underwriter is well positioned to take the time to understand your firms situation.



It's not pure roses and sunshine all the time with your business credit line. You should always be prepared to supply proper reporting and updates on your business assets, even more so with ABL type facilities which in some cases might even require due diligence visits, appraisals, etc.

There are several supplementary / complementary solutions to the asset based credit line - These can be used with or separate to your business credit line facilities in asset based finance .

One of these is Purchase Order Financing. This solution becomes extremely valuable if your firm is in a position to receive large orders or contracts that in the normal course of your business you would be unable to finance due to the working capital component of the transaction, namely having to pay suppliers, facilitate your order or service, and then wait for the collection of your receivable related to that order/contract. The financing works as follows - your supplier is paid directly by your P O financing firm asset based lender. The receivable that is attached to that order or contract can then be financed under your already in place asset based lending facility, or in some cases a separate P O Finance arrangement if you do not have either a bank credit line or an asset based line in place. Purchase order financing rates are  higher and your firm must have good gross margins to absorb the 2-4% fee on the order but can be invaluable to firms looking to grow larger with access to traditional finance,


If there is a bottom line here in corporate finance  its that the business owner/financial manager needs to understand both the alternative to credit lines, as well as the nuts and bolts of how and why they work best. That will lead to a better capital structure and a more guaranteed level of long term success.


If you want to consider revolving credit lines based solely on collateral value or new and replacement alternative credit facilities seek out and speak to a trusted, credible, and experienced Canadian business financing advisor. Your want a finance partner/advisor that has a solid knowledge of the ABL lending market and has the capabilities and expertise and track record of finance success to facilitate business credit line needs.

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



Business financing for Canadian firms, specializing in working capital, cash flow, asset based financing, Equipment Leasing, franchise finance and Cdn. Tax Credit Finance. Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations.

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations. He is an experienced

business financing consultant

.

Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.


Stan has over 40 years of business and financing experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in-depth, hands-on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.






Stan Prokop
7 Park Avenue Financial/Copyright/2020

Do You Know The Factors Affecting Business Financing & Business Lending

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Actionable Business Financing & Business Lending Tips

Business financing ! You've heard the rumour , namely that business lending is more available than ever. Whether it's small business funding or medium to larger corporations we hear capital is almost unlimited.

But for those firms that for a variety of reasons can't qualify for all, or even some of the financing they need from traditional sources such as Canadian chartered banks there is hope - in the name of asset based financing options.

Let's backtrack a bit and understand that a company, from a lenders perspective will always be identified relative to what stage of the company ' life cycle ' it is in. That might come in several stages , going all the way back to pre-sales revenue r&d to initial start up . It's a long journey to that ' high growth' stage . And it's not hard for the entrepreneur to dream about that final stage of business maturity where traditional financing sources are unlimited.

Have we forgotten anyone. Yes, we have , and it's prudent to mention that many companies, for a variety of reasons, are financially challenged and have poor financial performance and some serious cash flow or debt problems . Suffice to say the good news here is that even these firms can be financed or re-financed , as numerous alternative financing solutions are available .

Many firms often find themselves in the position of taking on larger orders or contracts that typical small business funding solutions can't deliver on .

3 OPTIONS FOR Alternative Financing

Purchase Order Financing - This is an increasingly popular method for a company to support purchase orders or contracts from new or larger clients. Without having to raise new equity or debt your order is financed by the lender based on who your client is and also ensuring you have a legitimate supplier .This financing can be achieved very quickly and makes sense when traditional finance doesn't work.

Accounts Receivable Factoring - This type of finance allows you to cash flow invoices immediately after you make a sale or deliver your services . The general credit worthiness of your clients allow you to get advances on your sales typically in the 80-90% of invoice value. Naturally this eliminates waiting to get paid, which these days seems to take anywhere from 30 to ..d are we say it.. 90days!

Simply speaking A/R financing is a cash flow accelerator!

Non Bank Business Credit Lines - Alternative financiers offer credit lines based on your inventory, receivables and equipment as a lump sump collateral . In our experience these credit line almost always exceed the amount you would receive under typical bank margining of these assets.

SUMMARY - If your business is growing , or even experiencing challenges investigate non bank solutions that will allow your firm to be in a constant position to access capital based on specific needs.
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a
track record of success who can assist you with success in business lending.




7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value added financing consultation for small and medium sized businesses in the area of cash flow , working capital , and debt financing .



Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .

' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

Lawyers Guns And Money : Acquisition And Merger Financing And Business Lending In Canada

Buying and Financing A Business In Canada

Information on business lending strategies and solutions for merger and acquisition financing

Acquisition financing in Canada. Lawyers, Guns and Money?! Do we really need all three of those? Of course not, in fact Money and probably some measure of ' lawyers' should do.



Warren Zevon's rock classic of the same name ‘... send lawyers guns and money ‘didnt include unfortunately any merger busines lending advice for business owners and managers in the SME sector who contemplate properly completing an M&A transaction.



Let's examine some key strategies and tips around your consideration of an acquisition financing
or merger. There are different reasons for buying a business, and at the same time numerous financial strategies exist to achieve the final goal. Proper merger and acquisition financing compliments the final exit strategy of both the founders of the firm being acquired, as well as for the owners of the newly created firm .



Today we're talking mostly about what's known as the ' forward merger' wherein your company survives by acquiring the other.



To say you need a team of experts in a successful transaction is a major understatement. That team will allow you to properly position both companies and ensuring proper valuations are in place prior to and post M&A.



Its human nature for buyers to bid low and sellers to ask high, so solid analysis of current financing structures is critical.



Leverage is a key concept in pre merger and acquisition financing analysis. And we're talking two kinds of leverage - both financial and operating g. Transactions often don’t make sense if the financial leverage is more than 3:1 from a debt to equity perspective, and the operating leverage analysis includes fixed and variable cost analysis.



The amount of leverage you will ultimately have will often determine what type of financing and what lender will successfully complete your deal.



The concept of ' friendly debt ‘, which can be a vendor take back is a great place to focus , and transaction that include a healthy ' VTB' are generally viewed as favorable . Of course if your lender for the acquisition financing considers the VTB as pure debt that's a different story.



But, as we said, generally speaking a solid VTB component of your transaction leads to a good deal. It's a great way of buying a business, especially if you view the financing of the transaction as a challenge. The reality is that a solid VTV plus the potential for profit in a business has the makings of a solid M&A deal. Quite often of course the VTB structure is much more favorable than traditional bank or commercial finance firm debt, and it gives all parties a reason to succeed, even the seller holding the VTB.



A solid down payment of equity in your own current business, proper M&A financing, and a solid VTB from the current owner or owners simply make for a probably successful acquisition financing win.



There are numerous financial considerations and analysis required for a solid M&A deal that represents a win/ win. They include our previously mentioned debt to equity, as well as other concepts such as cash flow servicing.



In the end result the amount of debt you take on in a merger via a business lending vehicle can make your firm more conservative in nature as you're focused more on servicing the debt than focusing on new opportunities



Talk about some complex scenario - identifying the opportunity, value and pricing your target, and, oh yes financing via a proper business lending strategy. So, as our friend Warren Zevon sang ' send ' lawyers, guns and money ‘, but our recommendation is to focus on # 3 - Money for your merger and acquisition financing in Canada.

Speak to a trusted, credible and experienced Canadian business financing advisor for assistance on your SME M&A financing needs

7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

Click here for 7 PARK AVENUE FINANCIAL

http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations .



' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

Working Capital Financing In Canada - Yes You Can When It Comes To Successfully Accessing Business Lending Solutions

Working Capital and Business Lending in Canada Without the Voodoo!

OVERVIEW – Information on alternatives to working capital financing needs in Canada. Accessing the right business lending improves your firms success in growing sales and profits

Business lending in Canada . Is it all just voodoo? We don't think so, and there are solutions you can investigate to achieve maximum working capital & cash flow financing. It's time to get your business on track - so let's dig in.

There seems to a lot of ' optimism ' in small and medium sized businesses - we hear and read about that every day. But it's tough to sift through all the smoke and mirrors, dare we call it voodoo? and get a sense of where working capital and business lending is at here in Canada.

Optimistic? Most business owners & financial mgrs these days are in fact bullish about their businesses. In some cases though external industry and competitive and economic issues have some folks hanging on for life!

If you are forecasting and planning your cash flow needs, say on a 12 month basis your biggest challenge is often how you do get that liquidity squeezed out of receivables, inventory, and purchase orders and contracts. That has been and still is the real challenge - it's all about that cash flow is king guy!

When looking at your cash flow and financing needs you need to focus in on several key issues and determine how they fit together - typically those issues your ability to collect your receivables and how you are financing them, what your sale growth is going to be, and what type of longer term capital do you need for things like equipment, real estate, etc. Naturally all that has to be benchmarked against how you are currently financing your company.

Looking at new equipment while at the same time conserving working capital? In certain cases you might have to spend a considerable amt. on new assets to keep up with the competition. That's where equipment/lease financing is key to minimizing cash outlay while keeping your asset needs up to speed. Typically new assets help grow sales and profits.

There are great solutions for working capital via creative business lending in Canada. When we meet with clients they typically are looking for one solution, the ' holy grail' so to speak. In reality we show them that a number of solutions, possibly combined, can get you where you want to be in Canadian business financing.

Those solutions include receivable financing. Heard about factoring but not sure you like how it works... then consider confidential invoice financing... allowing you to bill and collect your own receivables.
Don't also forget to investigate two sources of govt financing - One is the Canada Small Business Guaranteed Loan program, which finances a combo of equipment or leasehold needs. Those companies investing in R&D should take advantage of SR&ED financing. That allows you to monetize your SR ED claim, without waiting for the federal and provincial governments to cut your cheque.

Have contracts upcoming, worried about financing them. Investigate purchase order and inventory financing... despite the myth it really is available!

Finally, as an alternative to traditional bank financing consider an asset based lending facility... it combines the power of receivables, inventory and equipment... with your firm borrowing against those assets on a daily basis as you need the working capital . It grows automatically as you grow sales.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash and loan needs.


7 Park Avenue Financial :


http://www.7parkavenuefinancial.com


Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

' Canadian Business Financing With The Intelligent Use Of Experience '



Stan Prokop

Accessing Business Lending In Canada . Making The Right Financial Decisions When Financing A Business

Canadian Business Financing



Information on business lending in Canada . Financing A business comes down to why, how and where!



Financing a business in Canada. Decisions, decisions... decisions! It seems you always have unanswered questions - what type of business lending is best for my firm, what types of finances are available? ... who can we talk to .. and on it goes.

In fact the word ' debt ' keeps coming up when it comes to accessing financial solutions for your company... how much seems to ring a bell.

One of the things that business owners and financial managers often don't think about is the concept of ' fixed costs '. Those costs will always stay the same, no matter if your sales revenues and cash flows go up... or down. When times are great those costs stay the same and your company rises above the tide when it comes to profits, etc. However, if sales and cash flows decline your fixed costs unfortunately don’t fall in tandem.

It's all about leverage, and that becomes the double edged sword in business. That leverage that we associate with fixed costs and debt is risky but at the same time provides greater returns if your company is successful and growing.

We actually break leverage down into two different types - operating and financial. Financial is of course relating back to that debt and the amount we're willing to take on. Operating leverage on the other hand revolves around the amount of fixed costs you undertake.

No mater which type of leverage you’re talking about it always comes back to that balance act of how much is appropriate.

If you are not a public company it becomes a financial decision you make as to taking on debt ... unlike the public company you’re not in a position to go to the shareholders and ask for more equity . At the end of the day most Canadian business owners and financial managers borrow somewhere down the middle - by that we mean they don’t take on onerous debt, , yet they do take on some form and amount of debt .

One of the main decisions that business owners make around accessing business lending is the idea of making more return than the actual rates they are paying for debt. That becomes a challenge is your rates to finance are particularly high, which no doubt relates to your overall credit quality as perceived by lenders when financing a business in Canada. Your lenders, as we have pointed out in the past, DON'T share in the upside - they only want to cover off their risk and return. And if they have sufficient collateral or confidence in your cash flow all the better.

Canadian business owners benefit from leverage by accessing the right amount and type of financing. That includes equipment finances, term loans, bridge loans; asset based lending facilities, securitization facilities, etc. Speak to a trusted, credible and experienced Canadian business financing advisor on business lending in Canada, as it pertains to your firms needs.

7 PARK AVENUE FINANCIAL

CANADIAN BUSINESS FINANCING EXPERTISE



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.webpage66.com/business_lending_financing_a_business_canada.html

Lawyers Guns And Money . Acquisition And Merger Financing And Business Lending In Canada

Buying and Financing A Business In Canada


Information on business lending strategies and solutions for merger and acquisition financing




Acquisition financing in Canada. Lawyers, Guns and Money?! Do we really need all three of those? Of course not, in fact Money and probably some measure of ' lawyers' should do.

Warren Zevon's rock classic of the same name ‘... send lawyers guns and money ‘didnt include unfortunately any merger busines lending advice for business owners and managers in the SME sector who contemplate properly completing an M&A transaction.

Let's examine some key strategies and tips around your consideration of an acquisition financing or merger. There are different reasons for buying a business, and at the same time numerous financial strategies exist to achieve the final goal. Proper merger and acquisition financing compliments the final exit strategy of both the founders of the firm being acquired, as well as for the owners of the newly created firm .

Today we're talking mostly about what's known as the ' forward merger' wherein your company survives by acquiring the other.

To say you need a team of experts in a successful transaction is a major understatement. That team will allow you to properly position both companies and ensuring proper valuations are in place prior to and post M&A.

Its human nature for buyers to bid low and sellers to ask high, so solid analysis of current financing structures is critical.

Leverage is a key concept in pre merger and acquisition financing analysis. And we're talking two kinds of leverage - both financial and operating g. Transactions often don’t make sense if the financial leverage is more than 3:1 from a debt to equity perspective, and the operating leverage analysis includes fixed and variable cost analysis.

The amount of leverage you will ultimately have will often determine what type of financing and what lender will successfully complete your deal.

The concept of ' friendly debt ‘, which can be a vendor take back is a great place to focus , and transaction that include a healthy ' VTB' are generally viewed as favorable . Of course if your lender for the acquisition financing considers the VTB as pure debt that's a different story.

But, as we said, generally speaking a solid VTB component of your transaction leads to a good deal. It's a great way of buying a business, especially if you view the financing of the transaction as a challenge. The reality is that a solid VTV plus the potential for profit in a business has the makings of a solid M&A deal. Quite often of course the VTB structure is much more favorable than traditional bank or commercial finance firm debt, and it gives all parties a reason to succeed, even the seller holding the VTB.

A solid down payment of equity in your own current business, proper M&A financing, and a solid VTB from the current owner or owners simply make for a probably successful acquisition financing win.

There are numerous financial considerations and analysis required for a solid M&A deal that represents a win/ win. They include our previously mentioned debt to equity, as well as other concepts such as cash flow servicing.

In the end result the amount of debt you take on in a merger via a business lending vehicle can make your firm more conservative in nature as you're focused more on servicing the debt than focusing on new opportunities

Talk about some complex scenario - identifying the opportunity, value and pricing your target, and, oh yes financing via a proper business lending strategy. So, as our friend Warren Zevon sang ' send ' lawyers, guns and money ‘, but our recommendation is to focus on # 3 - Money for your merger and acquisition financing in Canada.
Speak to a trusted, credible and experienced Canadian business financing advisor for assistance on your SME M&A financing needs




7 PARK AVENUE FINANCIAL
IS AN EXPERT IN ACQUISITION FINANCING



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/merger_acquisition_financing_business_lending.html

ABL Asset Based Financing - #2 But Trying Harder In Canadian Business Lending!

Is it really that bad to be #2 in anything? In business and in particular business lending it could actually be an advantage sometimes don't you think? With apologies to Vince Lombardi (... 'winning is the only thing ...’) we're talking specifically about ABL asset based financing.

While even we admit ABL lending might be # 2 today behind Canadian chartered bank commercial financing there is no doubt that asset based financing, or abl commercial lending facilities are fast becoming the financing mechanism of choice for thousands of Canadian businesses . Let's examine why ABL trys harder!

Revolving commercial credit lines via asset finance are essentially secured credit lines collateralized by your assets. Could it be any more simple? You use the ' value ' of your working capital assets to generate borrowing capability on a daily basis. By the way, in some cases your fixed assets can be part of that daily borrowing equation also!

Let's come back to that word ' value’ re those assets. That is the true power of asset finance and probably why ABL business lending is so fast growing in popularity. As compared to a bank facility which relies heavily on many other formulas and ratios to determine your borrowing base on a monthly basis ABL finance focuses solely on the maximum amount of real true liquidity in your receivables, inventory, etc .

The hard truth is that ABL lenders actually want you to borrow to the maximum of your facility, because as independent finance firms their only source of income is the finance charges on your facility. It is as simple as that. While Canadian chartered banks (we still love them by the way!) can be on occasion criticized for fluctuating on where they stand on commercial borrowing in a number of industries ABL business lending tends to always be there, in good times and bad.

And speaking of those good times , the risk profile that ABL lenders look at is clearly all over the map - by that we simply mean that your company can be doing great and in ' hyper growth' mode, or you can actually be seriously challenged financially and still be a prime candidate for ABL finance.

In business it's as much about the people, and in asset based lending the management of these firms are typically ultra experienced in asset valuation of your receivables, industry, and your industry as a whole .That is partially why we have seen numerous cases where a commercial credit facility has been tripled when it converted to an ABL facility from a bank facility.

And here’s a little secret about ABL finance in Canada , some of the chartered banks actually have small boutique ABL divisions within the bank that compete with regular commercial divisions within that same entity . How ironic!

So getting back to our # 2 and trying harder scenario, why does this form of business lending seem to work better. It's just that your assets are converted into a higher level of borrowing for liquidity and working capital. Typical rations for this type of facility are 90% of your A/R and 40-50%, or more of your inventory and fixed assets. Now that’s a true borrowing base!

We'll never know why, but the cost of asset based credit lines is always a top of mind priority for our clients understanding of this method of finance. To be honest, the range of cost in asset based financing is wide.

Facilities are available at even better rates than your chartered bank, but in many cases they are equal to or more costly. But don’t forget that it’s about access to capital, not borrowing cost, since you can take that capital and convert it to more sales and profits. It's all about leveraging your assets for growth!

For your higher borrowing power you attain with this type of business lending you must have the ability to report on your assets, so regular financials and constant updating of inventory and A/R is an essential requirement. The collateral for ABL lenders is those assets, not ratios and covenants!

So, in summary, ABL is clearly #2 today in asset finance. Will it be number one, we're not sure we know or care care !... but we are sure that if Canadian business owners and financial managers check out this form of commercial financing they will clearly see the financial benefits of more liquidity and working capital .



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 .Info re: Canadian business financing & contact details :

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

Working Capital and Business Lending in Canada Without the Voodoo!

The other day one of the major U.S. banks released a report around the current ' optimism ' in small and medium sized businesses. God knows we love a good survey about what our competition is thinking!

It's tougher than ever to read through some of the smoke and mirrors, dare we call it voodoo? .. and get a sense of where working capital and business lending is at here in Canada. We're going to do that for you. More importantly we'll give you real world solutions to cash flow challenges.

Optimistic? You may or may not be bullish about your business as many of our clients are still slowly coming out of the recent recession, and from a cash flow and working capital perspective you're more or less hanging on for your life.

If you are forecasting and planning your cash flow needs, say on a 12 month basis your biggest challenge is often how you do get that liquidity squeezed out of receivables, inventory, and purchase orders and contracts. That has been and still is the real challenge.

When looking at your cash flow and financing needs you need to focus in on several key issues and determine how they fit together - typically those issues your ability to collect your receivables and how you are financing them, what your sale growth is going to be, and what type of longer term capital do you need for things like equipment, real estate, etc. Naturally all that has to be benchmarked against how you are currently financing your company.

The U.S. survey we talked about probably mirrors Canada quite a bit... 25% of firms are going to spne on euqipment... most felt cash flow from customers would imporove , and that sales growth and hiring would again resume an uptrend .

As a Canadian business owner you read these types of surveys, see the business news, and yet at the same time still feel a sense of smoke and mirrors, mostly around the fact that working capital and business lending still don’t seem achievable to the extent you want them to be .

You want solutions to your cash flow challenges in working capital. Let's leave the surveys to the pundits and your competition. You want to get back to growing our business and now worrying about working capital pretty well every day.

There are great solutions for working capital via creative business lending in Canada. When we meet with clients they typically are looking for one solution, the ' holy grail' so to speak. In reality we show them that a number of solutions, possibly combined, can get you where you want to be in Canadian business financing.

Those solutions include receivable financing. Heard about factoring but not sure you like how it works... then consider confidential invoice financing... allowng you to bill and collect your own receivables .

Looking at new equipment while at the same time conserving working capital. Want a 5.5% rate and no full owner personal guarantee... consider the government BIL /CSBF loan... great rates, terms and structures .

Have contracts upcoming, worried about financing them. Talk to an expert on purchase order and inventory financing... despite the myth it really is available!

And finally, consider an asset based lending facility... it combines the power of receivales, inventory and equipment... with your firm borrowing against those assets on a daily basis as you need the working capital .

Is business lending dead in Canada. Is it all just voodoo? We don’t think so. You have solutions, investigate them and speak to a trusted credible and experienced Canadian business financing advisor about getting your business on track!

-

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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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