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.

Sunday, July 31, 2011

What’s So Little About the Small Business Government Loan In Canada ! SBL Guaranteed Financing

Repeat The Benefits SBL Loan Financing Today

Information on the Canadian small business government loan program. Why ‘ SBL ‘ guaranteed funding is right for your firm .

Ever wondered how your company never managed to hear about the Canadian small business government loan program? The everyday term for this financing is the ' SBL ' - the ' small business loan that’s guaranteed by the government of Canada. And another thing is it really ' small'? Everything’s relative, but we certainly don't think so, and here’s why!

Industry Canada is the sponsor and governing body of the Canadian government with responsibility for the SBL loan program in Canada. As government folks are wanted to do, they have a couple more formal names for the program, it’s called by them the ' BIL ‘, or ' CSBF' program. Whats our point with all these acronyms? I guess you could say ' call me anything, but call me!"

The SBL loan provides financial assistances to thousands (almost 7500 loans were done in Canada in 2010) of Canadian small businesses. And lets get the word ' Small ' out of the way quickly, the program actually goes to $ 500,00.00 if you want to use it for real estate, in the majority of cases the program caps out at 350,00.00$ . Is that 350k small to your firm ?We've never felt a 350k financing is small, but as always, we'll let you decide, we just clarify and educate !

So whats the eligibility of the program? There are some really basic criteria for SBL guaranteed financing. Your firm can be a start up, or already established. Your actual or projected revenues have to be under 5,000,000.00 per annum.

Although 7500 business took advantage of the program last year can you imagine how many companies like yours there are in Canada with revenues fewer than 5 Million dollars? We can only imagine why the thousands of other eligible firms aren’t taking advantage of this financing. Is it perhaps because they haven’t heard about the program - well they can’t say that now.

Small business government loan financing is great for start up and growing small businesses in Canada. The government guarantees the loan to a significant portion, which is why thousands of businesses utilize this financing when they can get traditional Canadian chartered bank financing in Canada.

Borrowing for the program is focused on equipment, leaseholds and real estate. Software is also covered under the category of equipment.

Other great benefits of the program are that you as a business owner do not have to personally guarantee all of the loan, which in many, if not all! other Canadian business financing is a requirement. Oh, and by the way, rates, terms and structure for the loan, including no penalty for prepayment are additional great reasons to consider this type of financing in Canada.

Want to fast track your SBL small business government loan? Speak to a credible, experienced and trusted Canadian business financing advisor on how you can fast track an SBL financing for your firm.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Friday, July 29, 2011

Don’t Let Business Franchise Financing Approval Stop your Start Up Or Restaurant Dream In Canada

The Secret To Business Franchise Start Up Loans For Canadian Entrepreneurs

Information on business franchise financing in Canada . Whether it’s a restaurant or other type of business, start up, or established you have financing options to ensure success.

You're there... almost. You've made the decision to buy a business - it could be a restaurant or any other business for that matter. So let’s make sure franchise financing is not going to hold you back on realization of your dream and vision as a Canadian entrepreneur.

So how exactly do you find the funds you need. It's actually a process of careful planning around the type of financing that suits your purchase, and finding and working with the right lender to ensure the business is finance properly. Naturally planning and demonstrating you have thought out the financing is key also.

In terms of franchise financing your business - again it could be a restaurant, or one of the hundreds of other franchising opportunities out there in the Canadian marketplace... its important to break down the total financing need into categories, because in most cases each ' category' of your requirement is financed a bit differently . As an example the working capital component, what you need to run the business on an on going basis is usually financed by a traditional offering such as a business line of credit, or business credit cards if it’s a smaller business.

We encourage clients to cover the actual franchise fee out of their own equity contribution to the business, as it's challenging, if not impossible in the Canadian marketplace to finance your actually franchise fees. Items such as equipment, leasehold improvements, software, point of sale systems, etc are very financeable. And truth to be told these items make up the bulk of your financing needs more often than not.

Franchise financing around your business is in fact a 'niche ' or specialized sector in Canada. But the reality is that many of the same principles apply to financing your start up, restaurant purchase, or any other business for that manner.

What then are some of the basics around the process that allow you to get to the financing goal line... successfully! Items such as having a handle on your personal net worth and knowing what you maximum equity contribution to the business will be in terms of your personal financial situation are important.

We won’t say it's impossible, but the reali8ty is that you must have a decent personal credit score and history to be considered for franchise financing for your chosen business. The entire credit history of every Canadian is actually based on one number called a beacon score, and you require a certain ' beacon ' to be approved for business or for that matter any other type of financing. Bottom line, obtain your score and understand how it fits into the big picture.

In your business plan or executive summary ensure you focus on key items such as the following - info on your own experience, information on the industry and type of business you re purchasing, and finally . Perhaps most important, a financial projection.

Ensure that financial projection makes sense from a viewpoint of reasonable profit expectations - with a focus also on how your loan financing will be paid back. The reality is that this document and how it is presented can make or break your financing approval.

While financing in some form could be provided by your franchisor, this in our experience is very rare - they are selling franchises, not borrowing funds to allow you to borrow from them. So review carefully, with professional assistance, your key financing options - these include the specialized BIL/CSBF loan, equipment financing tailored to your asset needs, and working capital options that might come in a variety of financing ' flavours'.

You have a good chance of accelerating your approval by working with an expert - that works in all manners of business. So seek a trusted, credible and experienced Canadian business financing advisor who can assist you in turning the business ownership dream into financial reality.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Thursday, July 28, 2011

ABL Commercial Credit Lines Work - Why Asset Based Lenders Are Your Business FInancing Choice

Climb Aboard A New Way To Finance Your Business

Information on asset based lenders in Canada . Why are ABL commercial credit lines what you have been looking for in Canadian Business Financing .

ABL (Asset Based Lending) commercial credit lines from asset based lenders in Canada are providing tangible proof everyday that they are both an alternative or a first choice for Canadian companies seeking operating and working capital financing.

Let’s look at a documented example of how this facility helped one company. Although our example profiled is a U.S. firm we can assure readers that all comments and data apply to the Canadian business environment.

In our example the company was an importer and distributor, but the reality is that ABL commercial credit lines financing applies to numerous industries, in fact any industry that has receivables, inventories and assets.

So what did the ABL facility in fact do for this firm? It became a business line of credit that was able to ensure the company could grow outside of its sustainable growth rate (the growth rate at which a firm can expand without borrowing based on its current cash operating cycle).

Funds from the asset based line of credit were used, in our example to also reduce long term debt. Simply speaking the company was able to monetize current assets, get more liquidity by doing this, and reduce long term debt - enhancing their balance sheet ratios at the same time.

Many companies in Canada find themselves in the unfortunate position of being delinquent or behind on government source deductions. These arrears are viewed seriously by any lending institution, and in Canada place a severe responsibility on the owners and directors of a company. In many cases, including our example the additional liquidity you get from asset based lenders is used to pay off those government arrears and source deductions which have built up.

Naturally in any company supplier relations and the amount of your payables play a key role in your firms viability. Borrowing facilities from asset based lenders allow you to reduce payables and maintain better supplier relations.

ABL is the therefore the new alternative and are commercial credit lines of choice by Canadian firms of all sizes. Speak to a trusted, credible and experienced Canadian business financing advisor in this area of business financing to ensure the benefits of this financing can pay off for your firm.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Wednesday, July 27, 2011

Understanding Canadian Working Capital Finance – Cash Flow and Institutional Loans & Private Lenders

Commercial Business Cash Flow Financing In Canada

Information on working capital finance options in Canada . What offerings are available from banks and private lenders when you need business loans or cash flow financing.

Having the right information simply becomes a small investment of your time and can turn into tremendous benefits... that are why your ability to understand working capital finance loans from both private lenders and other institutions is noteworthy.

When Canadian business owners and financial managers think in terms of capital typically Canadian chartered banks come to mind. That’s what business people tend to call traditional financing in Canada. But is it always readily available and possible to obtain? Many businesses find themselves in the position of needing to grow, or in some cases simply survive around the need for extra cash flow and liquidity.

The optimal solution is of course simple - have some sort of facility in place to access cash... when you need it! Two choices come to mind - a traditional working capital term loan from a bank - its essentially long term working capital with fixed monthly payments. Alternatively, and in many cases the better option, a non bank facility from private lenders is a better, if not more accessible solution.

And to be clear, let’s define ' private lenders' as that term is often mis understood in the context of a Canadian working capital loan. It may mean other things to you, but in our discussion today we are simply referring to a non bank entity, quite often a commercial finance firm that has a specialized niche in business lending and working capital.

What facilities are offered by these ' private lenders' if we can call them that? They include offerings such as receivables purchasing, working capital facilities that combine the borrowing ability of your inventory and receivables into one facility. Essentially a business line of credit from a non bank entity. Other offerings, somewhat more specialized include purchase order and contract financing, tax credit financing, and what we call the ' big kahuna ' of working capital cash flow financing in Canada - ABL (Asset based lending).

When we think of the facilities as describe above we're talking about the ' current assets ' part of your balance sheet - that’s where the liquidity lies.

Working capital outflows though can also be stemmed by utilizing lease financing or a sale leaseback strategy... that’s for your fixed assets of course.

Thousands of retail businesses in Canada often find themselves in the working capital finance conundrum. In recent years merchant cash advances, or loans against future sales have become a solution for the smaller retail business.

Advantages of a bank loan for working capital purposes are pretty clear - it enhances your commercial credit history, rates are the lowest and most desirable.

So the essence of your subject today is that you're in effect surrounded by working capital finance and loan options from both private lenders and Canadian chartered banks. It's a question of knowing what those sources are, and, most importantly... which one works best for your firm, whether you're a small retail business or a small to medium sized established corporations. (The big boys do quite well on their own, thank you).

Permanent or temporary solutions are available in many forms, as we have noted.Speak to an experienced, trusted, and credible Canadian business financing advisor who can ensure your working capital sources are just steps away.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Tuesday, July 26, 2011

Let Equipment Leasing Finance Be Your Forward Momentum for Asset Financing – Use Lease Companies Today More Than Ever

In Uncertain Times Let Equipment Lease Finance Be Your Sure Thing Asset Financing

Information on equipment leasing finance in Canada . How lease companies and accelerate your asset financing needs.

A condition of advancement. That’s how ' forward ' is defined, and isn’t that whats it’s all about in business and competition. And acquiring assets via equipment leasing finance categorically moves your company forward. It’s the proper use of lease companies in asset finance that we'll examine, with a focus on ' why ‘!

Canadian business owners and financial managers do best when they view asset financing via equipment leasing finance as a ' tool '. It's utilizing that tool to leverage assets for your business sales and profit growth that makes lease companies the logical solution for fixed asset acquisition.

So for what type of asset does equipment finance not work? Quite frankly we cant think of one - whether its the new kid on the block - energy assets , or manufacturing, chemicals, food, planes, construction, auto , public infrastructure ... well .. we think you get the story. All assets can be financed, simple as that.

Whats so hard about understanding the value that lease companies bring to your firms table? It's a simple case of you ensuring you have chose then right asset, and that asset then being purchased on your behalf .. ensuring your ability to profit and grow from the use of the asset.

But that’s not all of course, because the inherent flexibility that comes with leasing gives you the right to acquire the ownership of the asset depending on what type of lease you construct and on what terms.

Advantages of this method of asset acquisition are fairly well known. You are in effect matching the outlays of cash for the lease to the benefits you will derive from the asset. The Canadian lease financing marketplace is on a total roll in 2011 and the asset finance industry is ready for business, yours! Interest rates are low, lease rates are ultra competitive and in many cases can even match bank financing, especially when you consider the processes and collateral you might be required to go through via a bank term loan for an asset .

2 to 5. What do we mean by that? Simply that that’s the typical duration of an asset lease in Canada - anywhere from two years to five years. We can’t remember when we have seen a lease term less than two years, because it simply doesn’t make sense for lease companies - although on occasion 7 and 10 year terms are available for certain asset classes... think heavy constructionb, aircraft, infrastructure, etc.

Clients can be forgiven for usually focusing only on the cash and working capital preservation aspects of equipment leasing finance .If you have limited capital, or don’t wish to disturb other financing you have in place leasing makes sense. Yes it’s true, this method of financing doesn’t deliver cash to your company, but it sure prevents it from leaving quickly... and in large amounts.

It’s of course an understatement to say that we’re doing business in a tech driven environment, so computers, telecom, and other tech assets lend themselves perfectly to equipment finance.

If you're concerned or simply want to become better informed about how to go about achieving the best benefits of this financing vehicle speak to an experienced, trusted and credible Canadian business financing advisor who can assist you in ensuring you're ' moving forward ' via this valuable tool in Canadian business financing.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Monday, July 25, 2011

10 Considerations For Equipment Leasing and Lease Financing In Canada – From Start to Buyout !

Use This Savvy Expertise To Master Equipment Lease Success For Your Company

Contrary to what Canadian business owners and financial managers might think it’s not always about the approval and the rate in lease financing in Canada. Let’s look at ten (yes ten!) other things you need to consider, from the start of an equipment leasing transaction to the end or buyout!

There a number of terms and issues that play a key role in the overalls structure and proper documentation of an equipt. lease in Canada. In some cases they should be viewed as your rights, in some it’s critical you understand your obligations.

Let’s dig in. In Canada the customary point of a starting to an equipment lease is essentially when you the lessee have signed off on an acceptance certificate. Your signature on that document should mean that you are prepared to start payments on the lease, which in Canada typically range from 36- 60 months, with some exceptions based on asset type and your overall firms credit quality. By signing the acceptance it’s critical you understand that you have deemed the asset in good working order, as often times the lease company is not the vendor you have worked with, they are just the financier.

Lease terms as we said are typically 3-5 years in Canada. Many clients fail to recognize they sometimes have flexibility in adjusting payments to a quarterly or semi annual basis - dont always think in terms of monthly payments when you are adjusting your cash flow budgets.

In many instances, certainly for larger transactions you may be asked to provide a certificate of incumbency on the transaction - simply speaking that’s just your firms statement that the signing officer on the lease can obligate the company for this particular transaction.

Warranties on an equipment leasing transaction in Canada. As we stated in the majority of cases, unless you are dealing with a captive finance co owned by your vendor the lease company is just financing the transaction - so they are concerned solely with payment, not functionality of your asset. So ensure you have a solid understanding with the vendor on maintenance, warranties, etc., because; ask we said, these often should not involve the lease financing firm.

Although your asset is leased you should consider that it be properly maintained. In certain asset categories you might be asked to adhere to a specific level of maintenance, also relating to the fact that on return of the asset the lessor might in fact re lease or sell the equipment.

We aren’t big fans of leasing companies in Canada placing ' stickers' or other asset ownership references on the assets you lease. In some cases lessors might insist, but in general we feel clients can negotiate strongly on this point, especially if your firms overall credit quality is strong.

A certificate of insurance is generally required for any equipment leasing transaction, or even a term loan, in Canada. Your insurance broker will typically be very familiar with a standard form that lists the lease financing firm as ' loss payee' in the even of any unfortunate incident, i.e. fire, theft, etc.

End of term. Only a three word phrase but boy is it important in Canadian equipment leasing financing. These three words can make or break you when it comes to ensuring the lease transaction you entered into brought benefits to your firm. The basics around this issue are as follows - ensure you know how to terminate the lease from a legal obligation point of view. If you have entered into an operating lease understand clearly your ability to terminate, return, extend, or upgrade. In technology financing this is all important, but equally important to other asset categories also.

In Canada some lease companies will want a right of first refusal on all your business. We'll be very clear on our feeling on this issue - simply they should have to earn this right, not demand it! Enough said!

In certain instances you might want to be in a position to assign your lease, prior to the end of the term. Typically this is negotiated up front, and requires simply that a credit worthy other entity be prepared to pick up your rights and obligations. Because of how lease financing companies are funded in Canada you might often find your own firm as the recipient of a notice of assignment by your lessor - the bottom line - nothing should really change as your rights still remain under and assignment unless you have agreed otherwise .

Well, that’s it. A lot of issues, some important to your firm, others less so. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with rates, approvals, plus the number of other issues we have detailed than can make or break equipment leasing success in Canada.

Stan Prokop is founder 7 Park Avenue Financial ; see


Originating financing for Canadian companies,specializing: working capital, cash flow, and asset based financing , the 7 year old firm has completed in excess of 80 Million $ of financing for companies . For info / free consultation on Canadian business financing / contact details see:


Paying Too Much For The Wrong Kind Of Factoring In Canada ? Why C I D Accounts Receivable Finance Works

Not Just Another Accounts Receivable Financing & Line Of Credit !

Information on accounts receivable finance in Canada . How to Address a/r factoring pricing to your firms advantage .

We run into far too many clients these days that are utilizing accounts receivable finance in Canada because they feel they have to... as opposed to wanting to .

Lets dispel some of the myths around factoring in Canada, additionally we'll talk about what we feel is the best type of facility (one you haven’t heard of we think!). Oh yes, and we'll address the cost of this financing also.

Most Canadian business owners and financial managers would not describe themselves as ' bankers ' if we asked them what they do for a living. However, welcome to the inner circle of Canadian banking, because when you think about it you're moonlighting as a banker . Why? ... Simply because you’re carrying a higher level of receivables than you probably want to. In effect you're the bank for your customers payables! And you don’t even get the bank pension!

It's around that concept that account receivable finance facilities are built in Canada. Your ability to convert A/R into cash flow for your own firm is critical. Naturally every firm that sells on credit has to make an investment in A/R - Factoring in Canada helps you eliminate or in effect finance that investment- Without external debt.

Although Canadian business often feels they are paying too much for factoring in Canada (rates tend to be in the 1-3% range on a 30 day basis the reality is that you are missing on the ability to take advantage of all funds that are in effect locked up in your A/R. And given that your terms are probably 30 days and most clients tend to pay between 60 and 90 days these days you're clearly tripling your inability to use cash flow to grown and run you business.

That’s where A/R finance comes in. Your ability to receive cash, the same day as you generate sales turns your firm into a commercial ATM machine. The continual flow of cash flow and working capital into your business as you finance your A/R as needed allows for more growth and more profits. Many firms miss out on the fact that a significant portion of the cost of factoring can in fact be offset, sometimes in entirety, by your ability to now purchase more effectively and take supplier discounts, thereby enhancing your relationship with key or valued suppliers.

Whats the best type of factoring in Canada .We think it's one you may not have heard of - it’s called C I D... standing for confidential invoice discounting. Under confidential invoice discounting guess who is control of the program - You!
You bill and collect your own receivables, and with the right type of facility set up you are in a position to not be locked in to any long term contract or breakage fees. That’s important, as a large part of the industry in Canada, (many of which are U.S. and U.K. players) would prefer to ' lock you in '. That’s not what the right C I D factoring in Canada facility is about.

The benefits of accounts receivable finance are significant... the weight of evidence in the constant interplay for working capital now puts you in the driver’s seat. You have total control of your cash flow, and because it’s a monetizing of your A/R you haven’t incurred one dollar of debt on your balance sheet. That’s a true business ' power punch '.

If cash flow and working capital is a constant worry for your firm speak to a trusted, credible an experienced Canadian business financing advisor about moving forward with the right a/r financing facility .. on your terms.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Sunday, July 24, 2011

Your 2nd Best Bet in Canadian Technology & Cleantech Energy Finance

Technology Finance Solutions In Information Tech and Cleantech in Canada

Technology financing as well as ' Cleantech ' Energy Leasing and Finance is a growth sector in Canadian financing and exhibits a strong need for solid financial solutions. Let's examine what you need to know in terms of key fundamentals in acquiring tech and energy assets.

If you are a client that require constant asset acquisition in areas such as computers and peripherals, electronics, IT Services, Medical Equipment... etc you need to be aware that financing decisions you make in fact can be as important as the asset your acquire . It's obvious to many business owners and financial managers in Canada that paying cash for major projects in Cleantech and technology acquisition either doesn’t make sense or in fact is simply not possible.

The hard reality is that due to different tech and cleantech asset types no one finance firm or specific solution will suit all your needs. That's why in Canada, where the financing choices are simply less available than those in the U.S. it’s important to understand who the players are in the asset category you are choosing to finance.

Projects in IT (information technology) as well as the Cleantech area tend to require huge amounts of cash and have significant tax and tax credit implications. It's strongly predicted that energy and carbon tax credits will one day in fact become financeable themselves.

The carbon tax will are levied on all fossil fuels, including gasoline, diesel, etc... and in some progressive provinces, such as British Columbia, plans are already in place to have funds collected that will in fact be ' returned ' via tax credits.

The risk in both managing and staying on top of technology assets as well as Cleantech assets is a formidable one for Canadian business.

When you enter into a financing arrangement for either IT or Cleantech assets you clearly want to understand how they will be used by your firm, and for what duration. The proper financing of these assets in fact can become a competitive strategy.

Issue you should consider in technology finance includes your ability to upgrade during the term of the financing arrangement or lease. Proper ' cost of ownership models ' in both Cleantech and tech finance can be valuable from a viewpoint of return on investment. allowing you to also consider the implication of all those related items such as software, training and support, environmental costs, etc. Very basic lease vs. purchase analysis can often help your financing decision and aid in the proper solution. It’s a simple matter of adding up all your costs and then ensuring your cash flows and cost of capital makes sense relative to the investment you are making.

Technology financing makes sense because it addressses the issue of cost, gives your flexibility, and provides rates terms and structures that make sense to your financial situation and goals.

Whats is then your first and best bet in technology financing and Cleantech finance. Quite frankly it’s simply vendor or manufacturer financing. The ability of the manufacturer or vendor to provide financing to you cannot be overstated. But on the other hand, 2nd best is often a better solution in Canada – that is .. aligning yourself with an independent unbiased financing solution allows you to escape from the ' control' that a manufacturers financing asserts.

That is why we often recommend to clients that they consider expert business financing assistance that is unbiased relative to your tech asset pricing, allowing you to eliminate many of the limitations that are placed when you align yourself with any one specific vendor. Flexibility and added expertise can save you thousands, even hundreds of thousands of dollars depending on the size of your project.

One size fits all does not work in technology financing and cleantech energy finance. Seek a customized independent financing solution that provides a comprehensive finance solution for your tech and Cleantech asset needs.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Saturday, July 23, 2011

Good Decisions Around A Commercial Business Financing Loan In Canada – Canadian Lending Options

Don't go on wondering if you feel you that as a business owner or financial manager you don’t understand your options around Canadian lending around a commercial business financing loan. Let's cover off some key groundwork around possibilities and the players.

In many cases certain types of business financing in Canada should be viewed as a specialty or a niche. The financial borrowings you entertain might be subsets of a certain type of financing. Some specialty areas that you might consider are of course bank debt, typically viewed as the most senior and least expensive method of borrowing if your firm qualifies.

Other more esoteric areas, but still viable, popular, and in fact growing in popularity are areas such as purchase order financing, confidential invoice discounting , asset based lending, bridge financing and mezzanine and sub debt financing . We would venture to say that in some cases you may have not even heard of some of these financing possibilities, let along of course understand the benefits of and requirement around successfully completing such financing .

The major8ty of Canadian business owners think in terms of our Chartered Banks when it comes to revolving lines of credit and term loans for equipment and working capital. However the reality is that you should be also assessing the merits of an asset based lender, a very unique and often independent commercial business financing firm that relies almost totally on your asset base of receivables, inventory and equipment and real estate (or combinations thereof) to provide you with a commercial business financing loan structured as a line of credit. Their expertise and industry and asset knowledge quite often exceeds that of many commercial bankers in Canada, if only for the fact this is their sole focus.

Term loans in Canada for either equipment or cash flow tend to b e three to five years in term duration. On occasion a firm needs what is termed a ' bulge ' or a ' bridge' loan type of lending that satisfied a unique need at a certain point in time for your firm. Typically these loans are then taken out or refinancing under better rates, terms and structures once the initial need around the bridge loan is satisfied - for example a temporary working capital bulge .

Many firms entertain cash flow, or what is known as ' mezzanine ' type financing to satisfy a lending need that can’t be arranged via your senior lender, i.e. the bank for example. Commercial mortgages are also often viewed as a financing vehicle, often in the context of a re financing of real estate for working capital purposes.

Hundreds of equipment leasing and financing companies in Canada also can solve your lending conundrum - acquiring special assets that have value and revenue generation for your firm.

Private equity in Canada has tended to be somewhat under the radar but continues to grow as a commercial lending option. In return for giving up a portion of your ownership the use of private equity allows you to focus on a variety of options, including, but not limited to: growing our business, refinancing your capital base, going private if you’re a public firm, and in many cases allowing you to work out of a distress or challenged period. Naturally a majority or minority controlling interest comes with that equity scenario.

The process involved in any significant commercial business financing loan is rarely different - you want to be in a position to highlight management capability, have reasonable financial target and goals , and willing to go through the proper level of due diligence relative to the size and type of financing you are entertaining.

Consider seeking and speaking to credible, trusted and experienced Canadian business financing advisor with the credentials to assist you in determining the right commercial business financing loan in the context of Canadian lending. The skills and expertise in business financing that an advisor brings will help position your firm for business financing success.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Friday, July 22, 2011

Canadian Franchisee Financing & Getting The Right Finance For A Franchise - Possible In Today’s Economy? Here’s how!

In The Minutes It Takes to Read This You’ll Understand Franchisee Funding & Loans In Canada

Is financing or the lack of knowledge of who to turn to holding you back on completing your dream or vision of finance for a franchise you have chosen? The ' how to ' in franchisee financing in Canada is not as hard as you might think. Let's examine a solid ' battle plan ' and the ' lay of the land ' in franchisee finance with respect to opportunities in the Canadian franchise industry.

The amount of capital you need when you consider how to finance a franchise can often seem formidable. The amount you are able to finance will come from debt (your loan) and your own individual equity into the business... classically known as your ' down payment '. We quite frankly can’t remember when we have not heard the question from any client ' how much do I have to put in ‘. More about that one later.

We caution clients also to think of the financing over the intermediate and long term. By that we mean that yes, you have to have solid funding to acquire the franchise but at the same time start to think also of how any working capital needs might be solved after you have acquired the business .

But first things first, right? So back to our main point today, which is ‘In today’s tough business climate?
Is it still possible to attain the amount of franchisee financing you need?’ We hate to put on our lawyers hat and offer up the answer ' it depends ' but quite frankly we're fairly bullish on the ability for any Canadian business entrepreneur to acquire financing for a franchise.

The key elements of ' successful ' franchisee financing revolving around a small handful of key elements - they are as follows - a reasonable down payment aka ' equity investment ' by yourself as owner. Secondly, the financing must be well documented - this should be a bus. Plan or summary highlighting you yourself, your proposed acquisition, info on the franchisor, industry stats, and a financial plan that makes sense. Only one financial plan makes sense for your lender - the one that shows them how they will be repaid!

The business plan or a significant executive summary outlining what we have just discussed should not be a daunting task. While we recognize that many clients don’t have the experience, tools, (or simply the desire) to prepare such a document it in fact can be prepared efficiently and for a very low/reasonable cost... we would not recommend paying more than 1k or less for a plan that meets and exceeds expectations. Also, be prepared to provide some input into the plan, as no one should know the business and it’s potential more than you.

In Canada franchises in the 350-400k range are financing via 4 main methods. Thousands of businesses utilize the well known BIL/CSBF loan that quite frankly provides, in our opinion, the best rates, terms and structures for small to medium sized franchisees.

Additional financing comes from one or two specialty firms that tend to work only with established larger franchisors with requirements often approaching 1 Million or more per transaction. Also, is it possible just to get ' a loan ' from a Canadian bank to acquire the franchise? We would offer up that it is, if you have significant collateral to pledge, very strong net worth, and a pristine credit bureau record. We don’t see that type of transaction happening a lot, and certainly the idea of collapsing or collateralizing outside investments has all sorts of personal and financial implications.

Your ability to finance any hard assets via equpment financing can often nicely complement or round out a financing package. Again, it’s a case of making the numbers work and ensuring that you have taken some time to analyze the total financing picture. When we sit down with clients we tend to break down the financing into key areas such as ' soft costs ‘(for example your franchisee fee) equipment, leaseholds, and working capital. By identifying a source for all these you have the ability to cobble together a plan that works.

Bottom line, it’s very possible to get a solid franchisee financing package in place to complete your dream acquisition. Common sense attributes such as being prepared and doing your homework go a long way. Consider also talking tow or working with a trusted, credible and experienced Canadian business financing advisor who can help you navigate the franchise finance roadmap to entrepreneurial success.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Thursday, July 21, 2011

Why Canadian ABL Asset Based Line Of Credit Clients Win ! Commercial Revolving Non Bank Facilities Work

What’s Different About Asset Based Lending Line Of Credit Capital ?

Information on the commercial revolving capital facility known as the ABL asset based line of credit . What are the advantages and differences of this facility to a bank business line of credit .

If you speak to Vince Lombardi or Charlie Sheen winning is apparently everything. We're not sure that applies in business all the time, but we think we can prove to Canadian business owners and financial managers that an ABL asset based line of credit is as close to the perfect ' winning ' commercial revolving credit facility that you can obtain. Here's why.

An ABL firm is a business to business lender - yes we know that Canadian chartered banks are also that... but they are operating under a totally different set of rules. That is why small, medium and even the largest firms in Canada utilized asset based lines of credit for working capital and cash flow financing.

The essence of an ABL is the financing, to the maximum amount possible, of your receivables and inventory. Medium and larger firms can actually include a healthy component of fixed assets and real estate into that mix.

The extra financing capability that your firm receives from an asset based line of revolving credit (versus the traditional bank facility) gives you choices. What are those choices? Mostly good things - expanding your business... acquiring a competitor or peer, working thru a turnaround scenario. or simply restructuring to get your firm where it needs to be.

But can't we get the same sort of opportunity via a Chartered bank in Canada? ask clients. In fact we agree that commercial credit and lending in Canada via our chartered banks is in fact on the rise, all recent stats back up that statement. However, 2 simple issues come to mind when we talk over these financing challenges with clients - Would you in fact be approved for a facility via a traditional commercial revolving line of credit... and, as germane, would your company get all the financing it needs.

The hard core reality is that many firms we meet actually find themselves out of favor at the bank, they are either ' capped ' to a pre set limit , or find themselves in the very ' unspecial ' feeling that comes from finding yourself in Special Loans . (Trust us on that, special is taken out of context in this financial term in Canada!)

We do agree with clients that in many cases, when all things are equal, bank facilities might seem cheaper from a short term commercial line of credit.

Actually, in numerous instances an ABL asset based line of credit can actually be cheaper than the bank, roughly the same in pricing, or in a lot of instances more expensive financing... but... and its a big but... you have to weigh the fact that ABL delivers more borrowing power allowing you to enjoy discounts with suppliers and to purchase more effectively.

Any commercial or revolving line of credit that allows you not to have to give up ownership percentage is in fact always cheaper than the reality of looking to equity financing, a partner, merger, etc.

In ABL financing your higher borrowing capability comes with only two requirements essentially, you have to have the assets to borrow against, and you must have reasonable financing and reporting controls to validate the significant amounts you are now borrowing.

If you want to explore ABL asset based lines of credit as a solid alternative to funding your company, either temporarily, or permanently speak to a credible, trusted and experienced Canadian business financing advisor who will work with you on an ABL relationship that makes sense.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Wednesday, July 20, 2011

Time Runs Out In Business Financing – Working Capital Management Analysis & Strategies

If you're like most Canadian business owners you're somewhat skeptical of either the press or perhaps the agenda's of financial institutions you deal with or borrow from .

Yesterday we got one of those newsletters from a bank - the content was mixed... We’re quoting here : ‘Automotive industry rebounds .... Business confidence down... business barometer mix down sharply...business credit trending up ...'

Talk about some mixed signals... and how do we interpret those type of messages in our own business situation and needs when it comes to working capital management and the analysis of that all important business life blood... cash flow?

How you manage your working capital, and how you borrow for it are one of the most important aspects of running and small and medium sized business in Canada. Simply things like billing and collecting your A/R promptly and matching those payables outflows make or break any business.

What are the factors that affect your need for cash flow and what are some analysis and financing techniques to accelerate working capital management. That’s effectively called the cash flow cycle. Did you know for example that many larger firms actually manage their growth, they use simple formula's that any small and medium sized business owner and financial manager can use to determine how fast they can grow based on their operating profits and their ability to manage receivables and inventories without over borrowing . Frankly, you should be doing what the big boys do also, and it’s not as hard as you think.

The three things that affect your need for working capital are your profits, how fast you collect from your customers, and the ability to control operating costs and overheads as you grow. The big corporations call this formula - the ' Sustainable Growth Rate ' - as a business owner you need to accept that growth can often mean running out of cash.

So how do business owners ' accelerate ' working capital management strategies to optimize growth. First, as we said they can use some basic formulas to determine how fast they can growth without outside financing. When outside financing is required a number of options are available - probably more than you thought.

They include receivable financing, working capital facilities that are non bank in nature and combine inventory and a/r financing , and true asset based lending which monetizes on a daily needs basis our current and fixed assets .

External cash flow can also be provided by lesser known, but very viable vehicles such as purchase order financing, securitization and even the financing of any SR&ED tax credits if you're in the manufacturing or tech space. Capital can also be conserved by effect lease financing strategies that finance assets you need on a short term or long term basis.

So, we've been told business is about a bottom line. What's ours today? Pretty simple. Use tools to measure your cash flow needs, plan for growth with working capital management and analysis in mind, and take advantage or cash flow techniques that are traditional and non traditional in nature . Speak to a trusted, credible and experienced Canadian business financing advisor on what it takes to implement strategies that work for your firm.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Tuesday, July 19, 2011

Discover Business Software Financing Options For Canadian Systems & Projects

No secret that in today's competitive environment any advantage business has over the competition is valuable - that’s an understatement. So, if you accept that software of all types’ runs grows and operates your business, doesn’t it make sense that you are up to speed on business software financing options for your systems? We think it does, so let’s explore what you might not know about software finance lease and loans in Canada.

The reality that comes as a surprise to many clients is simply the fact that technology can be leased. In today’s terms that covers hardware systems (servers, pc's, laptops) as well as software (our subject today) and the new leasing asset on the block: solar, wind and cleantech assets.

There are some key issues that differentiate software financing in Canada. Issues that you have to consider and take into account are the types of leases offered in business software financing options, the doc's that come with that lease, and probably of prime importance to our clients, how these leases are priced .

Software itself is a broad term, we refer to software you are developing (yes it can be financed) as well as the applications you purchase. Many transactions in Canada are software only leases and loans. A present surprise to our clients is often the fact that the actual software licenses can be financed also (remember, you use the software, you dont own it).

Many great technology financing occur when you utilize the concept of ' bundling ' - that is to say you acquire hardware and then bundle in numerous soft costs, including software to achieve a blending pricing and maximum financing of your transaction .

In technology finance when it comes to hardware you should often consider an operating lease for the hardware component of your transaction. The software and other soft costs (training, licenses, maintenance, install, etc) are financed at what the industry terms as ' full pay out ‘. By combining the
rates on both parts of the transactions you achieve a blended rate which makes your overall business software financing attractive from the lease and loan perspective .

Let’s use a quick example to illustrate -

You buy a 100K server and related ' hardware ' and agree to finance it a 3 year term. Additionally you require, and acquire 50k of software. What would the monthly payment be on this transaction?

We maintain it could well be in the 4.1k range per month on a 36 month term. That interest rate works out to about 1% or less, because the operating lease subsidizes the software financing.

Want this and other advice on proper tech financing and business software financing options on your systems and technology assets. Speak to a credible, experienced and trusted Canadian business financing advisor with software and tech finance experience. Options you thought you never had will become available, immediately.

Stan Prokop - founder of 7 Park Avenue Financial -

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 :


Instant Financing Access To Canadian Equipment Leasing Company Solutions !

Canadian construction, heavy equipment , transportation , and medical lease financing that works for your firm, today!

You're in for a pleasant surprise if you think it’s impossible to quickly and properly access financing via an equipment leasing company in Canada.

But what does it exactly take to be in a position to know what firms offer what type of financing , who and where are they, and what you need to know to ensure you have access to the proper rates, terms and structures that your Canadian firm deserves . Let’s update you on the current lease ' landscape' in Canada, because it's a whole brave new world out there!

Some of our clients seem to find this tough to believe, but there are lessors out there who are very interested in getting your lease finance business. Therefore you need to know who they are and what type of financing they provide based on the asset type that you're financing. We're going to show you one simply, easy solution shortly that will take care of that quite efficiently.

In Canada banks have traditionally exited and entered the leasing market on a number of occasions over the last number of years. Currently in the 2011 environment you can safely say ' they are in! '

Bank leasing is done through separate divisions and companies of the bank, with the major benefit being their very low cost of funds (after all they are the bank, right?!). Challenges to access bank leasing are simply that the credit quality they are looking for must be quite strong, so if your transaction needs to be structured, i.e. due to your firm’s financial health, then bank leasing might not be for you. Also, two types of leases dominate the Canadian marketplace, capital and operating, and the banks don’t offer operating leases , so if you need a ' lease to use ' ( as opposed to a ' lease to own' ) don’t waste a lot of time talking to a bank lease co in Canada .

Your 2nd best bet, bar none (We’ll share the absolute best bet shortly!) are independent lease companies in Canada. They are non bank in nature, are extremely motivated to get your business, and come in all shapes, sizes, and ownership (many firms are doing business in Canada but U.S. based).

The top characteristics of independent lease Co’s in Canada are they are flexible when it comes to structuring a transaction that makes sense for them... and your company! And you'll find often that when you bank can't, your equipment leasing company can in fact provide the financing you need.

The other segment of equipment leasing in Canada you need to be aware of and maximize are the ' captive ' firms. Captive? as in prisoner? Not exactly. Well perhaps, because captive denotes they are a prisoner to their parent company, meaning that many large corporations set up their own leasing and finance firm to lease their own products. I guess in business it’s known as the double, whammy! They make money on the product, and the financing. Think GMAC as an example as it relates to General Motors.

So, minor problem. How do you as a business owner wade through tens and hundreds of lease companies with respect to where they are, who they are, how they do business, what asset type they prefer to finance, and what credit quality they demand ? !! Want an instant solution and access to an equipment leasing company for your financing needs.

The solution is to seek and work with a trusted, credible and experienced Canadian business financing advisor who knows and has access to the entire lease landscape in Canada. The benefits? Save time, get prompt approvals, and get the best rate, term and structure for the asset you are financing. As the guy says on TV ' we urge you to act at once’!

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Monday, July 18, 2011

Best Rates In Transportation & Rental Leasing In Commercial Trucking In Canada

Is it possible for business owners, financial managers, or owner operators themselves to ensure they have the best rates in transportation and rental leasing in Canada? Commercial trucking continues to be a large part of equipment leasing and financing in Canada: Lets examine some key issues around rates, structures and approvals for maximum flexibility and success.

Asset value plays a huge part of the relationship to winning from the viewpoint of a quick approval and a rate, term and structure you can live with. In many cases the Canadian marketplace does not offer as robust and offering as in the U.S. There we find there are all sorts of financial offerings around transportation leasing - these include full payout capital leases, operating leases, ' Trac ' Leases, etc.

We can safely say in Canada that the majority of leases are full payout capital leases - that is to say ' lease to own '. Typically your lessor will be on the ownership title, leasing the vehicle to you as the lessee

In Canada, or anywhere for that matter, the asset value plays a key role, as we said, in both lease approval and structuring. The bottom line - transportation assets depreciate in value and determining the value at the end of any lease term early in your transaction negotiations is difficult. This is compounded when you are acquiring used transport and rental assets, which play a huge role in the lease financing industry.

Physical condition therefore plays a key role in the financing decision, and in some cases an appraisal might be required. So, as ironic as it seems, some key factors in your final credit decision and approval might well include mileage, tires, safety checks, and maintenance stats. You therefore need to understand as an owner operator or commercial fleet manager that these factors may well affect your payment and play a key role in your lease vs. buy decision.

Some of the high level points of interest you should focus on to understand how pricing is determine in commercial truck financing are the manufacturer and model, the expected useful life ( again, either new or used ) as well as the ability to finance any soft costs associated with your transaction .

Working with a specialized expert in transportation is key to achieving a prompt approval that makes sense in terms of your financial obligation. Not all lessors in Canada have the capability to service and finance transportation rental & leasing that you require in commercial trucking.

A combination of knowledge, financing services that suit trucking, and value added advice are key. Speak to a trusted, credible and experienced Canadian business financing advisor to assist you in achieving and approval and rates that make sense in commercial transport finance in Canada.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Get The Lowest & Best Accounts Receivable Financing Loan Rates In Canada – Factoring Demystified!

We wish. If only pricing and ' rates ' around accounts receivable financing loan rates were more easy to understand, and not so confusingly (is that a word?) presented to clients look for a/r financing, commonly know as factoring. We're quite sure that thousands more Canadian business owners and financial managers would look at this unique for of business financing quite differently.

So if it’s not for the industry itself to explain how things work... you guessed it, it’s up to us!

You're looking at accounts receivable financing because of the value you perceive in both growing, and yes surviving from an operational and growth perspective. Using growth as an example the financial reality is that as your firm does grow you require a greater investment in inventory and accounts receivable.

That investment hampers cash flow and working capital, unless you have discovered a way to get your clients to pay your firm before you have to pay your suppliers and employees. Most of our clients haven’t yet found that magic formula, so factoring has become one of several solutions.

In the majority of cases A/R finance is going to be more expensive than traditional financing you could obtain through a Canadian chartered bank. But no matter what pricing you achieve in Canadian A/R finance you can still offset this cost via supplier discounts you can now take, as well as the reality that you can now compete on equal footing with all your competitors. Bottom l line, you're financed to grow!

But let’s get back to pricing and rates, which is why you came today! In order to be able to afford and use effectively accounts receivable financing factoring you must be in a postion to have solid, at a minimum reasonable gross margins. This can be achieved financially of course via pricing well to your clients, and having respectable overheads.

So what are the key factors that you need to wrestle down when trying understanding factoring pricing?

First of all you need to understand the advance rate. That’s the amount of funds you receive on your invoice that's able to be provided to you immediately after you generate a sale. Typically you want to enjoy the maximum advance rate, which is 90% more often than not. Advances rates less than that are not advisable in our opining, and affect your overall pricing in a negative manner. So don’t ask the question ' whats my rate?’ make that instead whats my advance rate?

In accounts receivable loan financing its all about the discount fee. To most clients that that’s what they think the ' interest rate ' is on the deal. The reality , and this is difficult to understand , is that in factoring financing there is not interest rate, because the transaction is a ' sale ' of your a/r between you and your finance partner . Your receivables are ' bought ' at a discount that discount effectively being your carrying cost on the transaction.

We talked about the advance rate on your financing being an optimal 90%. But what about that 10% holdback? Ensure you get that holdback back when your client pays, immediately. That’s the facility you want to strive for, as the reserve plus the advance rate can significantly impact your overall financing cost in A/R finance.

We're the first to agree with clients that factoring pricing can be complex. One of the reasons is quite simple; the firms that offer it to you make it complex. If you take the time to understand how this financing works, and is priced we're quite certain the benefits will appeal much more clearly to your firm .

Want clarity and simplicity on your accounts receivable financing loan rates. Speak to an expert... seek a trusted credible and experienced Canadian business financing advisor who can assist you in making the right decision s in A/R finance.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :

Saturday, July 16, 2011

A ‘ How To ‘ Primer On Canada’s Government Loan . SBL Small Business Financing Makes Sense

Industry Canada sponsors, but does not administer the SBL small business financing government loan program. Government initiatives are solid source of start up and growth capital for thousands of start up and medium sized firms in Canada. The government small business loan is suited perfectly to provide you a source of funding you might otherwise not be able to achieve.

We also might add that many clients approaching us for assistance and info on financing often ask about ' grants ‘, or info on Community Futures funds . These two programs are also a source of Canadian business financing, but not one we'll be discussing today.

First things first in our ' how to ‘... and that’s simply that Canadian business owners and financial managers need to understand the government is the guarantor of the loans, but not, we repeat ' not' the administrators of the ' SBL' (Small Business Loan) program. That clears up a lot of confusion for our clients, who often mistakenly perceive having to deal with the government on a loan as potentially being somewhat bureaucratic. That’s not the case.

So who does administer and run the program - you might have guessed by now that is our Canadian chartered banks, and some other miscellaneous institutions, but primarily the banks. Adding to the confusion is often the perception that the government crown owned business bank, commonly know as ' BDC ' offers the program. Would make sense right? Guess what, they don’t have anything to do with the program.

The basics of the program are simply that your firm can finance up to $ 500,000.00 under the government guarantee to the bank. (In actuality the government guarantees 90% and the bank assumes a 10% risk scenario) However, you need to understand the500k limit pertains only to real estate; typically the cap on the program is 350k.

What can be financed under the program? It's not as broad as you think. Items financed are essentially equipment, leaseholds, software, etc; the bottom line is assets and software .A major mis conception we often have to explain to clients is that cash and working capital is not part of the program.

Terms? They are great. Really great. Rates are only several points over bank prime , terms can be up to ten years, and oh yes, guarantees, only a limited guarantee is required by the business owner, you in fact are not required to co sign or guarantee all of the loan . We can categorically assure you that thousands of others business in Canada do have the owners personally signing for the full amount of the loan.

Pre payment? Although we find many business owners in Canada ask us about pre payment the reality is that most loans probably run to maturity. But if you did choose to pre pay this is one of the only business financings in Canada that you can pre pay without a penalty.

To qualify for the loan the business owner must have a reasonable personal credit history, some element of a down payment to cover the 10% which the bank is on the hook for, and of course a solid executive summary or business plan that is typical of any business financing request. These can be prepared efficiently for a low cost by a trusted , experienced and credible Canadian business financing advisor, who can steer you through the ' how to's ) of the Canadian government loan for small business financing . You'll want to investigate the SBL!

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Friday, July 15, 2011

Failure & Success – Let Mezzanine Financing & Canadian Subordinated Cash Flow Loans Be The Difference !

Mezzanine financing and subordinated debt and cash flow loans are a solid alternative to many firms who are searching for capital in the ' grey area ‘. Whats the grey area? Simply speaking it can be the ' high ground ' between debt and equity in your firm, both of those having their own challenges to rise. Let’s take a Canadian walk through the high ground!

There are some typical situations in Canadian business financing that strongly lend themselves to ' mezz ' financing. Typically the word ' growth ' will come up often! ... Simply because that’s one of the drivers all too often of the need for cash flow loans financing.

Business financing in general, certainly when it comes to lending is very tuned to ' ratios ‘. We have always tended to call them ' relationships ‘... a lot nicer term we think! But the reality is that a lot of the debt and cash flow and interest coverage ratios your firm currently may possess simply prohibit you from raising the capital you need... today! Naturally as we all know those ratios, covenants, etc, tend to be Canadian chartered bank driven.

Typical mezzanine and cash flow loans tend to be 3-5 years max... from a term perspective. The mezzanine and cash flow loans solutions you consider should be considered as an intermediate option, not a long term one. Sandwiched in between debt and equity subordinated cash flow loans are usually taken out by one or the other of those at the appropriate time.

Given the general nature of security, i.e. your cash flow, and your projected cash flow it seems to therefore make a lot of sense to ensure you have a management team that can convince the cash flow and mezzanine financing lender that ability to repay the loan is there. Common sense 101, right?

So what can cash flow loans be used for? Typical reasons include buying another firm, a buyout by the management team, simply growing the business, and working capital to fund ongoing and projected sales.

There are instances when the owners of a firm wish to recapitalize with mezzanine financing simply to recoup some of their investment... we would offer up that loading the company up with debt requires a strong case to do that. By inference to what we have talked about cash flow loans of this type are rarely for start up or early revenue firms, as those cash flows are somewhat unpredictable to say the least.

Speak to a trusted, credible and experienced Canadian business financing advisor who can determine if this types of financing suits your current profile. A successful mezzanine financing simply compliments and rounds out your full financial package, and provides the middle ground between our two friends, long term debt and equity.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Canadian Franchisee Funding & Business Loans – In Over Your Head In Lenders & Finance ?

All of us in business are sometimes ' out of our element ' when we are required to create a ' win ' in an environment we sometimes don’t fully understand. So we forgive all clients who seem overwhelmed in the area of franchise finance lenders, funding for their new life as a franchisee, and getting business loans that... oh yes... hopefully make sense!

What we want to do now then is make what you perceived as a journey into a ' short trip “! By the time we have met you quite often you have made the decision to purchase a franchise in an industry either intrigues you, or, hopefully more so, one that you are sure you can be successful in.

Franchising today, in terms of total sales, is a mega portion of the economy - the numbers are staggering. Industries such as automotive, home improvements, business and consumer services, food, specialty and entertainment all have great franchise opportunities.

So whats harder, picking a franchise or trying to figure out who are the franchise finance lenders in Canada and whats the best method of franchisee funding? We'll let you be the judge of that.

Start up or acquisition financing of a franchise in Canada does not have to be as formidable as it might seem. You need a plan, some expert help (much of which is free) and you should have a roadmap to succeed. We'll boil down guaranteed success to 3 very simple issues.

The 3 issues that you should focus on or rationalize vis a vis your franchise finance funding are as follows : a reasonable personal credit record and net worth ( in relation to the size of your franchise investment ) , a basic but clear presentation or proposal ( aka ' business plan' ' executive summary') .. and finally, knowledge of who you are going to present it to for guaranteed success . Simple enough?

Your proposal or plan reflects how you present your business - the essence of the document is info on yourself, your franchisor, and your financial plan re sales / profits / cash flow, and info your industry sector. That's not at all complicated, and with some able assistance that type of document can be prepared in days.

Let’s remember we're talking about business loans, not a personal loan when it comes to franchise finance. Typical financings we see come in at the 350 - 500k range - naturally many franchisees select smaller businesses, some larger .

So, who are the franchise lenders in Canada? That seems a mystery to many clients for some good reasons. One of which the largest franchise financing program in Canada was probably never mean to be just that. We're talking about the governments BIL/CSBF program. Thousands of successful Canadian entrepreneurs use the programs for rates, terms and structures that you could only think ' the big boys' get in terms of attractive finance.

Alternatively one large specialty franchise lender in Canada has a significant presence. In many cases they are aligned on a program basis with your franchisor who might be participating in some manner on the financing.

Don’t forget also that many franchise business loans revolve around the purchase of a franchise business from an existing franchisee. In many cases that becomes a true business loan with a focus on what assets are being purchase, is the business profitable, what are the cash flows and future potential of that business.

Franchise finance funding can also be compliment ed by a working capital term loan, or working with a specialized equipment finance firm to acquire assets outside the main franchise loan . Additionally innovative merchant advance funding arrangements can help you with working capital and cash flow.

Bottom line. It's of course that you shouldn’t feel overwhelmed or not in control of a key element of your franchise decision, the financing. You have alternatives, assistance in the form of an experienced Canadian business financing advisor you may wish to consult with... providing you with the knowledge you can be successful in approved funding and business loans for your new venture.

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Thursday, July 14, 2011

Important First Step - Understanding Why An ABL ( asset based lending) Business Line Of Credit Is Different

ABL is a compelling business line of credit that utilizes the concept of asset based lending. But why does this type of financing differ from traditional bank lending?

Simply because when you utilize this type of operating financing your company is ' running on all cylinders ' when it comes to maximizing your financial borrowing ability. Let's examine why.

An ABL facility in effect creates a borrowing umbrella around your assets. This allows you to meet all your short term business operating needs, at the same time addressing key issues of both growth and any seasonality or cycles in your business.

On many occasions if your company has inventory as a key current asset you are going to be in a position when that inventory and your receivables fluctuate dramatically. Typically in our experience a traditional Canadian bank line of credit is unable to hand large fluctuations in business line of credit needs. Typically that’s because the bank lines have fixed limits, and are focusing on your historical needs, not your current ' bulge ' requirements.

The credit qualifications that you might be associating with a typical bank line of credit essentially don’t come into play with ABL asset based lending. In fact you can say all those rations, covenants, outside collateral, personal guarantees, etc are thrown out the door.

We've got nothing against a bank business line of credit by the way. And no one more than us is as strong a supporter of the strong and credible Canadian banking system. It's just that the majority of clients we meet are unable to access all, or even any, of the business line of credit that they need. That then hampers growth, ability to compete, etc.

Clients can be forgiven for understanding how an ABL business line of credit works or how they differ from whats generally available in Canada , That’s simply because the trend toward asset based finance has only received ' traction ' over the last number of years . We’ll also add that that traction, in effect our ' firing on all cylinders ' analogy gained a lot of steam during the global 2008-2009 credit recession when business financing dried up and came to as about as close to a standstill that we can imagine .

The essence of the ABL business line of credit could not be more fundamental - a facility is created under which you borrow against your assets on a revolving basis. You repay this business line of credit as your business fluctuates on a daily basis.

The key difference is simply you must have assets to borrow against ( inventory, a/r, equipment or real estate ) and you must be able to produce proper ( usually monthly) reports on key business metrics such as balance sheet, incomes statement, aged a/r and aged a/p and inventory lists . We submit if your business can't produce these already you might have bigger problems!

Investigate ABL asset based lending. You might well find that this type of non bank business line of credit not only differs significantly from what you thought it was, but moreso, might be the solution you didn’t know existed for your financing needs. Speak to a trusted, credible an experienced Canadian business financing advisor on why ABL works for you!

Stan Prokop - founder of 7 Park Avenue Financial -


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 :


Wednesday, July 13, 2011

Methods Of Financing Working Capital In Canada – Current Assets Leverage For Cash Flow Loans

Isn't it ironic that business can be actually quite good... or even great..? which then becomes a problem only because in business survival and growth it’s all about financing working capital... turning those current assets of your firm into loans or monetization facilities for cash flow.

In a perfect world Canadian business owners want to be able to meet their day to day operations, make any loan or lease payments and be able to plan for upcoming expenses or growth. How could one statement like that induce so much stress!

A lot of that planning comes from the ' current assets ' category of your financials, simply speaking your liquid assets such as cash on hand, receivables, and inventories if in fact your business has inventory. (Some services businesses just have A/R).

Small and medium sized businesses in Canada rely on either capital from their owners personal resources, or their decision to take on loans and debt of some sort.

But what type of loans makes sense when it comes to liquidity? Perhaps a better re phrasing of that question would be ' what is ' good' working capital debt? In our personal credit lives we think of good debt, i.e. a mortgage, and bad debt ' credit cards'!

Naturally considering new ownership or additional equity in your company or business (taking in a partner, etc) is simply a dilution in the long run and somewhat downsizes the overall incentive for all owners to grow the firm.

And when it comes to debt the amount of ' debt' or loans your firm can take on is certainly often limited relative to your own current financials and the state of borrowing in Canada , which vacillates from great to not great as you may have noticed!

So, whats the solution? Is financing working capital the way to go? (As opposed to term loans and more debt) It’s not as complicated as you think. And it all comes back to our friends, those two guys known as ' current assets '!

A large part of working capital financing in your business can come from yourself. Real basics such as ensuring you aren’t paying your payables before you're collecting your receivables... if you're doing that you're simply creating a working capital shortage that you have self imposed.

And let’s discuss your solutions for working capital constraints. We get a huge kick out of receiving newsletters from banks which focus on how to manage your cash surpluses when they are writing about working capital and cash flow. We haven’t had one client come in today with a cash surplus problem, but it's only noon....

Canadian business owners and financial managers challenged with financing working capital have a solid handful of solutions. Naturally in a perfect world (you mean it's not?) you would prefer to not take on a term loan for permanent working capital. But back to that perfect world... that might mean you have an overdraft or bank line of credit. For many small and medium sized businesses that simply is not attainable - or if it is it’s not quite enough.

Real world solutions for financing working capital and current assets, without loans involve what we call the monetization or cash flowing of those current assets, That typically is a working capital facility, non bank in nature (yes they are available and exist!) that allows you to draw daily, as needed on your a/r and inventory in the form of a business line of credit. Larger facilities of this nature are termed ' asset based lines of credit ' - we call them ‘ABL’s ... and them often are superior to bank facilities for a lot of different reasons.

More esoteric working capital solutions, but nonetheless real, are financing your tax credits, purchase order finance, or securitization of your contracts or receivables.

Speak to a trusted, credible and experienced Canadian business financing advisor on the right method of leveraging cash flow from your assets and business. Today would be a good timeframe!

Stan Prokop - founder of 7 Park Avenue Financial -


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 :