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.

Monday, October 31, 2011

A Smart Way To Grow Sales & Raise Capital - Canadian Factor Receivable Loans Financing Via Confidential Factoring

Confidential Receivable Financing the Canadian Way!

Information on receivable loans financing in Canada . How a confidential factoring facility is an alternative to traditional factor finance with even more benefits!

Is there actually a way to grow sales and raise capital at the same time? Seems like a bit of a contradiction, don't you think? But thousands of Canadian firms have turned to receivables loans financing, a specialized sub set of asset based lending.

By factoring or selling their receivables as they generate revenue this factor strategy achieves out two stated goals, generating working capital every time you make a sale. And smarter business owners utilize confidential cash flow financing as a better method than their competitors to make that business financing strategy work even better.

If your firm just quite doesn’t have the track record to achieve all the bank or traditional financing you need then consider such a strategy with the added twist we've suggested, implementing a confidential invoice finance strategy .

Receivable loans financing, as we have said, is a sub set of asset based lending in Canada. It finances what is more often than not the largest asset on the left side of your balance sheet, your A/R!

What makes this financing so different then? A lot of our clients say ' the cost!’, and we'll get to that shortly, because it is a more expensive type financing. But the true difference is the fact it doesn’t discriminate. What do we mean by that? Simply that if you firm is growing too fast, having challenges, etc your receivables are essentially the only qualifier to getting approved.

Utilizing confidential invoice factoring allows you to not have to focus on debt to worth rations, or cash flow coverage, or putting up substantial personal assets under a guarantee - it simply takes for face value the underlying assets , that the a/r!.. and finances them, all day, every day.

And could this financing work any more simply? We don’t think so. Every month, or more often if you wish you create a simple borrowing base certificate on your assets, such as you similarly would have done for your bank. Funds are advances against those receivables, and as you collect them the balance of course reduces, similar to a bank revolving facility.

And now for the difference, i.e. what actually differentiates our confidential invoice financing facility from day to day factoring that your competitors might be using. It’s actually the ' confidential ' aspect we have spoken of. If your competitors are using this Canadian business financing strategy we can most assuredly guarantee you that their customers and clients are being contacted by the factoring firm, and when payments do come in they are being segregated by your finance firm or even remitted to the finance firm directly.

That’s where confidential invoice factor facilities differ. The simple bottom line - you bill and collect your own receivables. You maintain control, and in Canada we tend to view that as a good thing. Most business owners and financial managers are not aware that that type of flexibility as an example is not available in the U.S. at all. And back to that cost issue. Confidential invoice factor facilities don’t cost anymore than regular invoice financing!

So, confused? We hope not. Interested? We hope so! Speak to a trusted, credible and experienced Canadian business financing advisor on the benefits of a confidential receivables loan financing strategy. Satisfy those critical needs your company has, growth and cash flow.

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 :


Sunday, October 30, 2011

Canadian Business Banking Needs? The Edge On Bank Lines Of Credit ! Who’s Best In Canada ?

Commercial bank lines or credit and term loans in Canada

Information on Canadian bank lines of credit . How do you pick the best business banking facility in Canada . What Canadian business owners and financial mangers should consider in Bank financing .

Does it all have to be that mysterious and frustrating? We're talking about achieving success in completing bank lines of credit for your business banking needs in Canada. And with the proper info and mindset, and some tips to follow we think you will have an excellent chance of securing the business financing you need.

We'll also reveal who is the best banker in Canada, so stay tuned.

Canadian chartered banks are all about debt type financing... we're talking about term loans, equipment leasing, and revolving loans that are secured by current assets such as receivables and inventory .

We think where some business owners and financial managers in Canada miss the boat is the issue of knowing where the bank is coming from when it comes to ' secured lending '. For a starter, banks don’t really do ' unsecured' lending so that might be considered as our first tip. And by the way. approaching your bank for equity type arrangements wont work either, so eliminate that strategy from your ' to do ' list!

So, where is the bank coming from? It’s coming from cash flow, with your collateral being the assets that back up that ability to repay. Banks have sophisticated formulas in place that you and I might never really see when it comes to commercial business credit financing, but we can safely assure you that positive cash flow 1.25 times the debt you have to service is pretty well the rule of thumb with Canadian chartered banks.

Canadian banks are often criticized for not taking enough risk. Don’t get us started on that one, but recognize first that banks are regulated by various agencies, and loan and risk quality is constantly being evaluated. If you are looking for a banking type facility that comes with a much higher risk appetite, move into the non regulated area of financial services in Canada... that includes asset based lenders, non bank commercial financing firms, independent leasing companies, receivable financing firms, etc . It’s these firms that take up the ' risk slack ' when it comes to transactions the bank wont do - but of course the financing costs are higher. Surprised? You shouldn’t be.

A really simply way of looking at bank lines of credit is simply that the bank will look more favorable on your firm if it throws off cash, as opposed to consuming it! Naturally our clients then ask ' if I was throwing off cash then I wouldn’t need to be borrowing!”

Think of Canadian business banking as relatively low risk lending - if your firm has a higher risk profile then you should consider asset based lenders, and specialty lenders of all types - receivables, Purchase Order financiers, etc, . They will understand your needs a lot better than the bank.

One of most key points we share with clients around business banking in Canada is that they should pay more attention to the terms, covenants, and rations in their actual credit agreements. It seems to us, silly in fact, to be rate focused when all the Canadian chartered banks are within basis points of each other in their offering to business clients. Focus on meaningful covenants that allow you to work and grow on a daily basis.

You never want to be behaving in a manner as to jeopardize your business because of covenant issues. And another key area you should engage in frank discussion in is the whole issue of personal and spousal guarantees. In our experience there is some flexibility in this area when your case is properly presented. Consider a limited guarantee strategy also.

And finally, whets the best commercial bank in Canada? We actually do have a favorite, but it doesn’t seem right to say. But we can share with you that the best banker and bank in Canada is one who is professional, credible, has respect within their institution, and who is prepared to carry your business case forward in both good and challenging times . Your relationship with that type of banker is worth... well... a lot.

Want some tips, strategies and assistance in securing business bank lines of credit tin Canada that achieve your operating and growth goals ? Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in business banking 101.



We Finance the little guy! P.S. We finance the big guys too!


Saturday, October 29, 2011

Understanding The Canadian Government Business Loan - Federal SBL Loans Work For New & Existing Businesses

The Canada Small Business Loan Program – Yours To Discover!

Information on the government business loan program in Canada. How the federal SBL financing program loans for your new and existing business makes you eligible for $ 350,000.00 in financing for your new or existing business.

As some , certainly not all ( that’s why we're here) Canadian business owners know the federal government has a long standing and very successful business financing program , aka the ' government business loan '. It’s a federal program in Canada, sponsored by INDUSTRY CANADA, and it is probably suited for your new or existing small (New or under 5,000,000.00$ in revenue) business capital needs.

There's just one problem we’ve perceived over the years. Simply that understanding how the program works, and how you get approved seems to be a mystery to a lot of the clients we meet looking for this type of financing.

Let’s examine some of the key underpinnings of the program, focusing on what this great financing program does, and, more importantly, how you get approved.

First of all, talk about a great partner for your loan. Have you ever needed a co signer? Here's one for you, the government of Canada! We heard their credit is excellent! What we mean of course, when we speak to clients about the program is that the government guarantees the majority of your loan to the bank that underwrites and administers your financing. Talk about a good deal. And you thought you might have to ask your brother in law!

Naturally it goes without saying that this incents the banks and some other institutions that offer the loan to provide your firm with financing that you might not otherwise be able to achieve in a normal traditional financing request.

So we all agree it’s a challenging business financing environment out there. So how can government business loans help your firm?

First of all they finance only 3 things, and that always seems to be a mystery to clients who think the program is a cash or working capital loan. It is not! The three items that the program finances are equipment, leasehold improvements, and real estate. Under the equipment category many of our clients choose to also finance software, which is allowed under the program. And by the way, that’s application software, not software you are going to develop yourself.

So how does a business owner navigate, successfully, the program? We assure clients that you can almost assuredly guarantee yourself approval by following a very specific course of action. There are numerous conditions that can negatively affect your chances of approval, and if you know them you can avoid them.

It’s quite frankly all about your proposal, how it’s presented, to whom its presented, and ensuring you have the basics covered. Those basics are as follows - a minimum 10% equity investment in the financing, reasonable personal credit, a business finance plan that clearly identifies you, your business, and some financial projections that make sense relative to the loan amount you are requesting.

So, the bottom line, you can make understanding the Canadian government small business loan complicated, or easy. We're for easy, so if you want some practical direction in getting a small business loan up to 350,000.00 in place speak to a trusted, credible and experienced Canadian business financing advisor on the positive expectation of an SBL loan approval.



Canadian Business Financing !

We finance the little guy ! P.S. We finance the big guys too!


Friday, October 28, 2011

Feel The Freedom ! Success With Canadian Franchise Financing Business Lenders

Our Only Competitive Edge In Business Financing Is Experience !

Thinking Of Entrepreneurship ? Pain Free Franchising Finance

Information on franchise financing solutions and lenders in Canada . Business financing made sense for entrepreneurs .

The ' freedom ' of owning your own business, one that has already proven to be successful is surely exhilarating. That’s why it’s so all important to ensure that you're aware of the options and mechanics that franchise financing lenders utilize for a business financing when it comes to franchising in Canada.

It’s a broad spectrum ! From newer immigrants to Canada to seasoned corporate executives there is no doubt that a franchise purchase represents the new ' Canadian business dream '.

Let's examine some key issues when it comes to financing your purchase, including which the franchise financing lenders are in Canada, and how you can avoid the disappointment of doing it wrong the first time.

Several elements of your personal and past business life come into play when a franchise lender looks at your business proposal. One of them quite frankly is your personal credit history which must be reasonable. ‘What’s reasonable?' ask clients who sit down with us to discuss their franchise purchase and business financing options.

Actually the playing field is very level here, not a lot of mystery as some clients assumes. In Canada two credit bureau agencies dominate the credit history market. All Canadians who borrow or who have borrowed in the past have a 'score '. The passing score in Canada tends to be 650. So you can easily check your score by yourself and determine whether you are in the striking range.

Another typical question we always get revolves around the type of franchise you purchase. Do franchise lenders actually favor certain franchises over others? (Think doughnuts, hockey, and a Canadian franchise name that comes to mind as an example!) We have even seen some studies recently that indicate that there are some internal publications at some financial institutions in the U.S. and Canada that favor certain franchises over others.

We think it goes without saying that some brand names are more attractive , seeming have the ability to be more successful vis a vis cash flow generation and profits, and are viewed as a ' better bet '. That having been said we've worked with numerous clients who have successfully financed franchises that are either new concepts to Canada or less well known. So don’t take a less known name as a ' no' when it comes to franchise financing success probability.

The reality of financing franchises in Canada is that it’s hardly a huge ' collateral ' play. Involved in your purchase are franchise fees, leasehold improvements, and numerous soft costs that quite frankly aren’t at the top of the collateral desired meter!

So your ability to package and present a deal properly, inject some equity into the deal (the proverbial ' down payment ‘) and demonstrate a decent opening balance sheet and cash flows is critical. A solid business plan that meets and exceed the lenders qualifications can be prepared efficiently by any Canadian business financing advisor who is worth their salt!

So, franchise lenders. Who are they in Canada? The banks do the majority of franchise financing in Canada, but the secret here is that the vehicle used to approve your financing is done under a government program called the BIL /CSBF loan. It works perfectly for your needs on franchise financings under 350k. One major international firm also finances franchises under special arrangements with selected franchisors.

You should rarely count on your franchisor to assist in the financing process, other than some guidance and suggestions. So if that’s the case, who can you turn to? Consider talking to a trusted, credible an experienced Canadian business financing advisor who can tailor a financing to your specific needs, and 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 . 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 :


Thursday, October 27, 2011

Canadian ABL Loans Are Solutions To A Cash Crisis and Business Growth Financing ! Look Into Business Lending via a Revolver Loan Facility.


Asset Based Line of Credit Facilities In Canada

Information on ABL loans in Canada and why this type of business lending and financing revolver is the ultimate working capital loan facility.

Talk about two different problems... a cash crisis (or ongoing cash crisis!) and badly needed growth financing. Let's take a look at how abl loans via asset based lending and financing can be the perfect solution for your revolver facility loan needs.

In business there’s nothing more urgent than a ' call to action ' around a working capital or cash flow crisis. At this point it's all about ' righting the ship ' and allowing Canadian business owners and financial managers to get their business finances under control. It's more often than not a case of simple survival.

Naturally putting in a proper ongoing financial solution, such as an abl financing revolved allows you to get your eyes back on running the company normally on a daily basis - we meet with clients who regularly tell us that a huge amount of time is spent on managing cash crises and juggling things such as vendor payments . Bottom line, its time to stop putting out the fires and focus on a solution... that works.

A true asset based line of credit has the ability to allow you get back the confidence that your suppliers, lessors, and other lenders had in your business, and that’s important. It goes without saying that lenders, investors and suppliers truly have the ability to control the destiny of your company if the perception of a permanent cash flow shortage remains.

So, enough about the fear! Let's focus on a solution that works. Simply speaking, that’s asset based financing via a revolver facility that is generally non bank in nature. (Some Canadian banks now offer this facility but the credit requirements and deal size criteria are, in our opinion, exceptionally high).

The concept of asset based lending, aka ' ABL ' is simply securing your assets, leverage them to the maximum that is possible, with the result being greater liquidity for your company. And by the way, don’t think we have just leveraged up a ton of debt on your balance sheet - 100% wrong, we have simply monetized or ' cash flowed ' existing assets... allowing you to borrow against them .

Those assets are typically very clear categories of receivables, inventory, equipment, and occasionally real estate and tax credits due your firm. (Yes tax credits such as the SR&ED credit can be included in your financing package).

So the question then becomes, don’t banks do this already...? And you have tried that possible scenario. The quick take away here is two things. First of all abl loans and financing revolver facilities provide greater leverage on current assets. Receivables are typically margined at 90%, and inventory, often difficult to finance for cash flow, can be margined anywhere from 30-70% as an example. If you were getting 75% from your bank on A/R and nothing on inventory haven’t we just increased your working capital by anywhere from 50-100%?! Wow.

A very simple way to look at this, and we use this example with clients all the time is to simply think of the asset based lender solely looking at the collateral, while the banks will focus on collateral, but mainly historical cash flow, ratios and covenants, and outside collateral via personal guarantees, etc . (As a general rule very little emphasis is placed on personal guarantees when an ABL loan facility is put in place.

Oh and by the way, you absolutely don’t have to be profitable to qualify for asset based lending facilities, which in Canada start at a low of 250k and go to the tens of millions of dollars.

So, cash flow crisis. Growth challenges. Looking for a solution? Speak to a trusted, credible and experienced Canadian business financing advisor on ensuring an ABL working capital facility is right 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 :


Wednesday, October 26, 2011

Buying A Company ? B I M BO Strategies for A Canadian Leveraged Buy in and ( MBO ) Management Buyout

Buying a Company Using Its Asset Base and Cash Flows

Information on the leveraged buy in and management buyout strategy (MBO) for Canadian Small and Medium Size businesses in Canada

B I M BO? Don't panic... it’s not what you think. That’s the acronym that the finance folks use for whats known as ' Buy in Management Buy Out ' for business owners and management who are contemplating purchasing their own or an existing company. Let's look at MBO 101 with a focus on helping small and medium sized businesses in Canada who don’t necessarily have access to the resources and talent to properly complete such a transaction on their own.

We're quite sure that hundreds, perhaps thousands of business people in Canada are at any one time contemplating purchasing their own firm, or one in which they have targeted or are associated with . Larger corporations of course have access to tons of talent with respect to lawyers, advisory firms, etc when they contemplate this type of deal. Typically we open the business news page and see headlines announcing such purchases that have either been done behind close doors or sometimes catching one of the parties totally off guard.

Let's focus on some core basics that small firms in Canada can focus on when it comes to a management buyout or leveraged buy in.

As a business person considering an MBO focus initially on two concepts, debt and equity. In spite of the negative connotations of ' debt ' you can still acquire a firm in a very successful manner by using a combination of either bank loans or other asset based debt that use the assets of the company . Just make sure of course that the right amount of due diligence is done of making sure that you can meet any interest and loan payments out of the cash flows of the on going business! That can't be overemphasized!

By using just a small amount of equity, either your own new equity or existing equity in the new business going forward you are able to leverage a great transaction... as long as your new debt to equity ratio is still reasonable. Debt to equity ratios vary by industry ... a very typical debt to equity ratio for a manufacturing type company is 2:1.

When you get overly aggressive on debt in the excitement of finalizing your transaction you of course run the risk of a business failure. In a perfect world (and trust us, we know its not) you end up with a solid management team, a reasonably financed firm, and lots of potential for profit and growth via new synergies of management, etc.

Business people should also be considering at an early stage how they someday will exit from the transaction. They often see a huge return in the future on the risk and capital they have put on the table, but need to understand how that will ultimately be monetized.

The bottom line - MBO... Our ' management buyout ' or leveraged buy in is often a fabulous opportunity for managers and owners to take advantage of a great business opportunity based on their skills, knowledge, etc. Using assets already in place allows you to capitalize on a great opportunity. Just think of it, you have used the assets of an existing company to pay for it. That’s sometimes called ' bootstrapping’

So, can a great BIMBO strategy work? Absolutely, and it can be financed via a bank, asset based lender, private equity firm or some other more esoteric types of financing. Speak to a trusted, credible and experienced Canadian business financing advisor for help with your BIMBO!!

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 :


Tuesday, October 25, 2011

Choose The Right Canadian Leasing Services and Financing Companies When You Lease Equipment !

Canadian Equipment Leasing Assistance – For Free!

Information on choosing the right equipment financing services and leasing companies in Canada . Maximize benefits when you lease equipment with a partner that meets your asset acquisition needs .

You know you want to. We're talking about dealing. Dealing? Don't panic, our topic is leasing and financing services from lease equipment companies in Canada. Choosing the right partner and type of lease is critical to asset acquisition strategies for Canadian business owners and financial managers.

You've chosen to lease equipment, rather than purchase it, for a variety of reasons. The lease vs. buy decision is a classic business decision that more often than not demonstrates the value of leasing financing. We're all heard the basics, the tax and accounting benefits, flexibility, ease of acquisition with respect to approval, etc, etc!

Of course when it comes to showing those lease obligations it’s getting harder and harder to mask the fact that at the end of the day lease obligations are still debt. Even recent international accounting rule changes have taken away some of the aspects of off balance sheet financing , but the reality is that operating leases still offer a significant technology hedge ( and a lower payment ) than the capital lease .. Or lease to own option.

When you are looking for the right lease equipment companies to deal with its critical to understand their product offering. Are they focused to small, medium or larger size transactions? Canadian business owners and financial managers don’t realize it, but it’s a very, repeat very small handful of firms that handle all sizes of transactions, from 5k to 5 Million, and we tell clients they can waste a lot of time dealing and negotiating with the wrong firm.

Your current advantage as a Canadian business owner or financial manager is that the leasing and financing services available to yourself are quite frankly... booming! The industry has returned to fairly good health after 2008 - 20009 and the industry is full of captive firms, independent commercial firms, bank leasing companies, all of which are a combo of Canadian owned or foreign owned in some cases.

So, is there a way to wade through the industry players and determine which firm is for you, based on your asset financing and services needs? That requires a lot of time, and some solid due diligence. Naturally a better way to address the challenge is to work with an industry expert, at no charge , to determine the best deal when it comes to rates, structures, types of lease you choose, and , today’s topic, who you deal with .

Other ways you can find the right lease equipment companies are of course through internet searches , referrals from a bank or trusted business friend, , etc.

We're quite frankly on the side of letting and expert do the work for you , someone who has the experience and industry and market knowledge to negotiate rates, terms, misc fees, and overalls structure with a focus on one goal - maximizing lease equipment services and benefits for your firm .

So, bottom line? It's not as hard as you think. Speak to a trusted, credible and experienced Canadian business financing advisor on maximizing leasing and financing services 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 :


Monday, October 24, 2011

Profit From This Money Losing Strategy ! Finance Receivables At A Loss Via An Accounts Receivable Financing Loan

Try This Unique Business Financing Strategy

Information on accounts receivable financing in Canada and how an a/r finance loan facility for your receivables can turn a seeming money losing situation into profits and growth

Profit? From a money losing strategy? Before you question our sanity consider this ! Everyday thousands of firms in Canada are selling their receivables at a loss, they know it, and they still have chosen to tap into one of business financing Canada's best working capital and cash flow strategies, despite the cost and apparent loss!

We're talking about accounts receivable financing, and why those thousands of Canadian business owners and financial managers utilize an A/R finance loan (it’s not a loan per se) to fund their companies.

How many Canadian businesses have had their business credit lines pulled or reduced in last several years? We wouldn’t want to count. Getting that letter in the mail from their financial institution either seemed like a mistake, but more probably a shock.

Naturally there are a hundred reasons why their business credit lines were pulled/reduced. It could be external lawsuits against your firm, failing profits, your inability to produce timely financial statements, etc, etc. And believe us, we're not taking the side of Canadian chartered banks, which are among the best run in the world, the bottom line, and any well run financial institution certainly has its rules and policies... but.. bottom line, you need a new financing solution!

Our recommended potential solution. Lose money. But lets clarify - consdier an accounts receiving financing strategy . Your receivables are sold, as you generate them at a loss . A loss? But this loss is then turned around into a working capital and cash flow bonanza, as you now are in ability to be liquid, sell more, generate new profits previously unattainable, and yes, survive.

Receivable finance has been the savior of thousands of firms in Canada, from start up to even some of our larger corporations. While banks, credit unions and other firms have slowed down in commercial financing the receivable finance industry has stepped in to take its place.

So, some really key points. A/R financing is not a loan as we mentioned, your firm incurs no debt. The Canadian commercial receivable finance industry is generally unregulated - the A/R firms buy your receivables at a discount (hence ... your ' loss” and therefore provide you with unlimited working capital as your sales grow. In general it’s recommended your firm have stable or growing sales when this strategy is implemented.

So what about those ' losses ' and the cost. Quite frankly that’s where we spend most of our time with clients , explaining the concept of invoice discounting, or accounts receivable financing loan finance . Your A/R portfolio is financed by your A/R being sold at a discount - In Canada that discount is in the 2-3% range. That 2 -3% is the loss we've referred to. Simple example, you have an invoice for 10,000 - you receive 9800 dollars when you finance, or sell that invoice. You've just incurred a loss, in reality a financing expense.

But, consider this! Here's the essence of our message today, your firm no long has to wait 30-60, or 90 days for cash flow out of that invoice. You can also use the cash to take a 2% discount with your key supplier, and you might also give him a call and say you'd like a 5% price reduction as you are prepared to give them a cheque as soon as they deliver product to your door. You can also now take on that large order you previously were unable to compete with against competitors who have been taking all your business. And those are new incremental profits to your firm via that new business.

Hasn’t our money losing recommendation just turned into a mini profit machine for your firm? We think it has. So yes, your financing costs may double, but the benefits we think are very clear.

So, the bottom line? As usual, we're keeping it simple. Consider all the costs and financial implications of an accounts receivable financing strategy. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in putting together a facility to work for your Canadian company.

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 :


Sunday, October 23, 2011

Get Unstuck On Funding Your Management Buyout ! Financing A Canadian Leveraged Buy In Practically

Proposing A Management Buyout ?

Practical advice on funding a management buyout in Canada . Financing a Leveraged buy in via asset financing strategies .

Successfully engineering and completing the funding of a management buyout via a leveraged financing is a challenging issue for Canadian business people and financial managers who wish to complete a buy in financing to a company they are associated with.

Let’s examine some practical tips and strategies for getting ' unstuck ' on a transaction such as this.

The best ' tool ' you have in an LBO /MBO type deal is of course the seller’s financial statements. That's where it all begins. While year end statements are a must it goes without saying that interim financials help you piece together and complete the story as ' up to date '.

Purchasors and your financiers will want a proper representation of specific assets and liabilities on the balance sheet. Great care should be taken in qualifying key assets such as accounts receivable... from a simple point... are they collectible?!

Naturally there is no guarantee that any existing or future A/R item will in fact be collectible, and no one is going to guarantee that for you. Some solid credit checks on the quality of the A/R base is highly in order, as well as looking at historical payment trends of the client base. You also want to ensure there is no right of set off against the receivables, and it certainly not uncommon for us to see the A/R as often the largest asset on the balance sheet.

A great strategy for Purchasors contemplating a leveraged management buyout funding is to make some sort of agreement on the ability to ' rejig ' the final price subject to A/R collectibility. Naturally owners of the company might be reluctant to do that.

Is there anything trickier than ' inventory ' with respect to classifying quality and true value of inventory, which might of course be raw materials, work in process, or finished goods. Make a solid effort to quantify the quality of the inventory you are purchasing with respect to issues such as obsolescence.

Plant and equipment should always be appraised in some manner on funding a management buys in. This quite frankly protects all parties, and we urge clients to complete an appraisal that includes some component of fair market value, orderly liquidation value, and forced liquidation. Those numbers will vary significantly in any appraisal and play a key role in the way in which assets are financing in a real management buyout. It goes without saying of course that the purchaser should ultimately be comfortable with the quality and condition of the fixed assets on the balance sheet they are contemplating financing.

Don’t forget also to look any leases or contracts that might be in place via the current business owner. You will want to make sure these are assignable to yourself in the event of a completed sale.

In Canada you can complete a successful funding of a management buyout via an asset based lender, or a private equity firm. A great deal occurs when you have a company that is both profitable and has key assets that are financeable, i.e. the receivables, inventory and equipment we highlighted earlier. Speak to a trusted, credible and experienced Canadian business financing advisor for assistance in successfully completing you buy in via a leveraged funding.

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 :


Saturday, October 22, 2011

Heard About Canadian Government Business Loans? Why Lending Under The SBL Loan Is Right For Your New Or Existing Business.

Don’t Forget to Check Out The Gov’t Small Business Loan Program

Information on the ‘ SBL ‘ loan , and why government business loans are the perfect financing and lending vehicle for new or existing businesses in Canada.

Small is big... in fact it’s huge! We’re talking about small business in Canada, and as most business owners know the large majority of all businesses in Canada are in fact ' small '. Small is relative of course. But when as a whole they represent a huge portion of employment and commercial sales it’s about time we acknowledged it.

Government business loans are one way in which our key business segment, the SME sector is in fact acknowledged. Its lending specially constructed for the small business owner; a loan new or existing business that makes sense, and in fact has attractive terms.

The simple reason why the government SBL loan should be so attractive to yourself as a business owner is simply that boy is it hard to get the financing you need, in case you haven’t found that out already.

Yes many alternative finance choices have become more popular... financing such as receivable finance, P.O. finance, tax credit monetization, bridge loans on equipment, etc.. but without a doubt the ' big kahuna' of small business finance is still traditional government business loans.

Even though Canadian banks can, we feel, quite legitimately be called conservative lenders the hard fact is that the financing they put through the government SBL lending loans is actually guaranteed in large part by the Federal government.

To its credit INDUSTRY CANADA, the department that administers the program has stayed to the program. Through recent economic recessions, market turmoil, etc the program has remain unchanged. Unchanged? Well not truly correct, because in fact the program got better!

During the 2008-2009 financial worldwide debacle Canada actually increased the loan amount under the program by $ 100,000... going from 250k to 350k. And the personal guarantee that you are required to make under the program remained the same, only 25%. Try and get any other business financing without a 100% guarantee backed by you personally... its simply not available.

But it’s still a tough environment out there; you need knowledge on which bank to deal with (the banks administer and fund the program under the government rules and guidelines). Additionally you need ' BOY SCOUT EXPERTISE “ ... by that we mean the motto ' BE PREPARED' never sounded better as applicable to ensuring government new business loans are achieved in a timely manner, securing the funding you need.

Simply speaking, knowing the rules, and putting some basic common sense strategies toward those rules allow you to get approved, as well as receiving the loan you need via our vehicle, the SBL loans in Canada.

You can greatly improve your chances of getting a government business loan, aka the ' SBL ‘. Knowing what conditions will in fact not allow you to get the loan is valuable information.

Speak to a trusted, credible and experienced Canadian business financing advisor on getting a proposal and package in place that virtually guarantees you approval under the program if you have covered off some very basic pre-requisites. Government business loans may be the perfect solution to the financing you need - check the program out!





Friday, October 21, 2011

Your Antidote On How To Finance A Franchise Loan In Canada - Secrets of Franchise Financing Companies / Banks

Canadian Franchise Financing Tips and Info

Information on how to finance a franchise in Canada . What do you need to know about franchising companies and banks to successfully complete a loan / financing.

Entrepreneurs searching for their ' antidote ' to the question ' how to finance a franchise ' in Canada seek to unlock the secrets of banks and franchising companies in Canada. We think we have earned the right (via experience) to have learned and now share some of those tips, secrets, and strategies on successful franchise financing in Canada.

You're somewhat close to being successful already when you have chosen to purchase a franchise in Canada, simply because you're buying what is hopefully a proven business model that has a higher probability of success oftentimes than starting your own firm. And it’s a two way deal; because your franchisor needs you to be successful that is how they succeed themselves!

Canada also has solid franchise disclosure rules and regulations, which help protect the investment you are about to finance - and that’s a good thing!

Naturally the goal of your business is to be profitable, so significant care should be done around your investigation into the overall profitability model - remember also that those profits pay back your franchise loan / loans.

To finance a franchise in Canada, successfully, revolves around two key concepts: knowing your start up costs, and being able to assess ongoing working capital needs. The latter is sometimes forgotten or receives less attention, and that’s not good!

Assessing your start up costs and ongoing working capital and cash flow needs involves the financial portion of your business plan. It's not as hard as you think, it’s just a simple case of taking a basic spreadsheet and focusing on the inn’s (your projected sales)... and the outs... your expenses in each category. Those include rent, royalty payments, and a salary draw for yourself, your cost of goods ... etc. At the end of the day it’s highly desirable to have money left, aka ' profit'!

In Canada franchise loans are usually 5-7 year term long; occasionally they might be longer but certainly in our experience 5-7 is the norm.

There is a limited, in fact, only one full service franchising company in Canada that provides financing. They tend to be involved in larger national programs, and can assist with acquisition financing, refinancing of a current location, new builds, and in some cases real state if in fact that’s required. A very heavy focus is placed on traditional cash flow coverage. To non financial people we can simply explain that if your debt is 1 dollar in your business you have to be able to prove or demonstrate cash flow of around 1.25 ( a buffer is created ) to pay back the financing . Transactions from this firm tend to be larger in size.

But what about the hundreds of other firms out there who may not be aligned under such a program? Where do their franchisees go for help? Here is where it’s prudent to talk to two folks; one is a trusted, credible and experienced Canadian business financing advisor who has experience in franchise finance. The other is a guy name ' BILL ‘. Actually, that’s B I L, and it stands for a specialized loan program that perfectly suits what many franchisees are attempting to achieve in a solid franchising loan. It also have very attractive rates, terms an structures that even larger more established firms cant achieve, i.e. lower personal guarantees, no penalty to repay, etc.

So, bottom line. As usual its focus on a franchise model that makes sense and suits your experience. Be prepared for a reasonable equity investment on your part, and seek the services of either a very specialized franchising companies that focus on finance, or, even better, the help of an expert who can package a solution that suits your individual situation. Those are solid antidotes to the ' how to finance a franchise ' question!

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 :


Thursday, October 20, 2011

Forget About A Traditional Finance Loan - Discover Why Canadian ABL Lending & Financing Loans Work.

Change Can Be Good In Canadian Business Financing !

Information on ABL Lending in Canada . Why asset based loan financing is a solid lending solution for a business line of credit finance facility . Asset based loans leverage assets for working capital .

We’re the first to admit ' change ' is one of the most difficult things to cope with sometime, both in our personal lives and in business. Hindsight becomes a great friend, and that’s why we use this analogy in talking today about ABL financing in Canada. When business owners and financial managers discover the true power of asset based lines of credit finance and lending in Canada their first reaction is ' where has this been all my ( business ) life!’

Let's examine some of the key differences, and benefits of asset-based loan financing in Canada, specifically the asset based line of credit revolving working capital facility. It seems simple... and also difficult to realize why this is different than traditional Canadian chartered bank financing. Because it’s simply a business line of credit financing facility secured by inventory and receivables. In many cases both equipment and real estate are added into our ' mix ', leveraging even more assets for working capital purposes.

So why do thousands of business owners utilize ABL loans (they are not loans per se ...more about that later)? The basic answer is that they cannot access this amount and type of credit elsewhere, predominantly at their bank.

So service firms, distribution companies, and companies that manufacture gravitate to this type of cash flow financing for the obvious reason - they can’t get financing elsewhere. In some cases clients have been asked to exit the bank and find themselves in ' Special Loan’ facilities - essentially a holding tank or purgatory for firms that have violated or cant meet bank ratios and covenants.

What size of facilities is available for asset based lines of credit in Canada? Small facilities start in the 250k range based on the overall size of your current assets, predominantly, as we said A/R and inventory. And from there? ABL financing loan facilities go up to the tens of millions of dollars, and some of the largest corporations in Canada have ' forgotten' about traditional bank lending and financing for credit lines, adopting the ABL model instead.

Oh yes... we had mentioned the term ' loans ‘. A true ABL facility is not new debt on our balance sheet; it’s not a term loan, its simply monetizing the current assets in to a revolving line of credit facility, that’s important to understand!

Start up firms in Canada can be financed by ABL lending, as can firms that have significant current operating and financial challenges... the one thing they do have, and need, is ' Assets ' to facilitate the type of lending we are talking about . That’s our other key take away point for clients, that the actual approval of such facilities is not, we repeat ' not ' dependent on balance sheet strength, profitability, or ratios and covenants. Even personal guarantees play a very small part in the approval of ABL facilities, or some of the subsets of this type of finance.

Naturally it helps when you are moving back to profitability via a plan that will work!

Our final point today on ABL loans is simply that it’s all about liquidity. Receivables are typically margined at 90% of your portfolio, and inventory is assessed on an individual basis, often ranging up to 70% in financing leverage.

So should you forgot everything you know about traditional finance business credit lines... maybe not a great idea, but we can assure you that you are missing out if you don’t consider the alternative ! Speak to a trusted, credible and experienced Canadian business financing advisor on the benefits of such a business financing 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 . 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 :


Wednesday, October 19, 2011

Practical and Surprising Methods for Working Capital And Cash Flow Financing For Operating Funds For Canadian Business Owners

Canadian Business Cash Flow Alternatives

Information on working capital and cash flow solutions for operating funds for Canadian business owners and financial managers.

It should be no secret that SME firms that make up the majority of the Canadian economy face the same challenges as some of our larger corporations. Their ability to manage and successfully solve working capital and operating cash flow issues for business probably seems more daunting due to perceived lack of options and the resources to put those solutions in place.

Let’s examine how to address some of those challenges, and where help might lie.

The flow of funds into and out of your business ultimately determines the cash flow needs. That need is driven out of the requirement for you to run your business, pay your bills, produce products and services, and then wait... and hope?! .. to get paid on time.

One of the dangers of cash flow management and use is that it is tempting to use your working capital for fixed asset purchases. That’s not recommended of course, and it’s more viable to look at other methods of asset finance such as equipment finance or term loans for assets required to run your business. In many cases existing assets can also be refinanced for working capital.

The logical solution for additional cash flow needs is of course a bank line of credit, which you can successfully negotiate if your financial statements and personal finances support that type of facility. In higher growth situations more alternative methods of capital rising can be considered - they include purchase order financing, inventory only finance facilities, or the monetization of your tax credits. These are clear options when banks or other lenders require you to put in additional funds into your firm that may not be available from your personal resources. We definitely are always urging clients to try and separate their personal finances from their business assets as that just seems common sense to us... isnt it one of the reasons incorporation exists in the first place?

We encourage business owners and financial mangers to obtain asset financing for their business. As noted, this can come from the alternative sources we mentioned, which also might include receivable financing outside the bank, a true asset based lending facility that monetizes A/R, inventory and equipment into a revolving line of credit, etc. These sort of facilities work perfectly if your firm can’t meet the stringent requirements of traditional cash flow covenants. Banks and institutional cash flow lenders thoroughly investigate your firm’s ability to make payments via ratios and covenants that identify cash flow coverage and debt to equity ratios. If you can meet them... great... if you can’t... consider our alternatives .

Always focus on breaking down short term and long term needs. Short term really focuses solely around your A/R and inventory build up while long term debt is repaid via regular term payments over a long period of time

Our asset based line of credit solution that we referred to above is the optimal solution for asset based working capital and cash flow finance. Receivables are finance dup to 90% of your total A/R, and if your inventory can be fairly easily solid it can also be margined.

If your company is a bit larger towards the high end of the SME sector there are some great hybrid solutions such as mezzanine and subordinated debt solutions. You pay a higher rate for this type of financing, typically in the teens, from a rate point of view, but it is ultimately cheaper than selling permanent equity, particularly if you are bullish on your long term prospects.

Oh, and by the way, the most common sense solution to working capital and cash flow is simply prudent management of those current assets. Keep your profits in your firm, negotiate better terms with suppliers, and strive on a daily basis to reduce A/R and inventory levels. You've just become the savior of your own firm!

Speak to a trusted, credible and experienced Canadian business financing advisor on operating working capital and cash flow solutions for your business - there are more alternatives than you might be aware of!





Tuesday, October 18, 2011

Understanding And Getting Good Equipment Financing Rates In Canada – Don’t Get Fooled By The Lease Interest Rate Game!

The Real Deal On Canadian Lease Finance Rates and Calculations !

Information on equipment financing rates in the Canadian lease finance industry . What you need to know about your lease interest rate when financing equipment and other assets in Canada .

‘Won’t get fooled Again” ... wasn't that a great classic rock song by ' The Who '. It also might be a different sort of battle cry by Canadian business owners and financial managers who want to better understand equipment financing rates when financing assets in Canada. The ever elusive ' whats my lease interest rate ' will now be examined!

The actual rate in an equpment lease in Canada is determined by several factors. Knowing how it’s presented into your deal structure is critical. The actual cash flows that you pay out in the lease, and their timing also plays a key factor in who wins and who loses when it comes to yourself and your equipment lender . Oh, and by the way, we're on your side if you're a Canadian borrower in lease financing - although we recognize the need of course to for the lessor to make a reasonable profit.

In some cases it is of course important to assess the final rate impact of on some miscellaneous charges that you might incur to get a transaction completed. Things such as miscellaneous admin fees, legal fees, and even an appraisal if that is required can of course add up and impact that all important final lease rate .

In Canada we tend to keep things simple. Unlike the U.S. our two basic lease offerings are the full payout lease to own capital lease, as well as the lease to use, or operating lease, also called the Fair Market Value lease. Equipment financing rates differ significantly on those two transactions.

The easiest to understand transaction when it comes to equipment financing rates is the capital lease transaction. It has only 5 elements, term of the lease, interest rate, dollar size of your deal, monthly payment, and end of lease obligation or payment. If you can determine the other 4 you can very quickly and properly assess what your lessors requested final interest rate is. That’s done most efficiently with a financial calculator of course.

The operating lease is a little bit of a different beast when it comes to rate. We can actually make a case that you might never be able to figure out the lease interest rate on a fair market value lease. Why is that? Didn’t we say the interest rate calc was quite simple? Well, the reality is that in an operating lease transaction the lessor makes a decision to invest some of their own funds into your transaction. You won’t necessarily be told what that amount is, so it affects the amount being financing - in effect they have made a down payment for you on the deal.

The good news is that the operating lease transaction will always be a lower payment, and if you run the numbers sometime you might find that the interest rate might even be negative! Again, that’s simply because the down payment has been made for you.

But, as in all things in life, its pay me now or pay me later, because in FMV transaction your obligation is to return or purchase the asset at the end of the lease term.

Another nuance, often missed by Canadian borrowers, is to enquire if your payments are being calculated in arrears or in advance. You can understand that by using the analogy about how people pay their rents and mortgages - both are calculated differently.

Timing of cash flows is also critical in lease interest rate calculations. Adjusting payments to reflect perhaps quarterly or annual payments by your firm dramatically changes the lessors yield, or profit on the transaction.

Naturally all lease interest rates are driven by your over all credit quality. The better shape your firm is in financially allows you to negotiate a much better rate. The lessor borrows funds and marks them up depending on your firms credit quality and the size and nature of the asset.

So, our bottom line today? A lot of different factors go into equipment financing rates. They can dramatically affect the final outcome of your lease from a cost perspective. Consider talking to a trusted, credible and experienced Canadian business financing advisor on achieving the best equipment financing rates in Canada. Or as the song says... 'Won’t get fooled again'!

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 :


Monday, October 17, 2011

Who Is Providing Sale Of Receivables Financing In Canada? Why Factoring Financial Funding Works !

Choosing the Best A/R Finance Partner ?

Information on who is offering sale of receivables funding in Canada and why factoring is a financial funding strategy that can work for your firm to enhance working capital and cash flow .

Hundreds, probably thousands of Canadian businesses are gravitating everyday to newer types of business financing in Canada. One of those is the sale of receivables as a financial funding tool. Otherwise known as receivable finance, or factoring, or invoice discounting ... the bottom line is that you want to know more about this form of business finance, and who is offering it. Similar to many situations we encounter in our personal and business lives it’s important to ensure you have assessed the proper information when making a major financial decision.

Cash flow shortages, fortunately or unfortunately, are an everyday fact of Canadian business. The typical first reaction of the Canadian business owner and financial manager is to turn thoughts to ' loans ‘... or ' the bank '. While those two ' alternatives', if we can call them that might be achievable the reality is that in many cases these solutions are limited, non existent, or not available to you based on your firms current financial position.

Enter sale of receivables financing! By utilizing an invoice discounting strategy you generate immediate cash for your firm. Yes, there are some technical nuances to this type of financing, but one you have those under your belt you have achieved a major business milestone - the freeing up of working capital! That new capital allows you to in most cases to invest in additional inventory and finance ongoing sales without the pressures of a cash flow shortage.

Let's get one key point out in the open right away - and that’s simply that we're keenly aware that the cost of this type of financing often is, rightly or wrongly foremost in our clients minds. The actual cost of factoring and financial funding in this manner is definitely higher than bank or term loan financing of a traditional sense.

First of all, the factoring industry is not regulated per se, that's what it's necessary to pick the right partner firm. Ensuring you get a competitive rate is critical, and even more critical is to ensure you are embarking on this type of business financing for the right reasons. And those reasons? They are growth, survival, expansion, etc. It’s important to also remember that this type of financing is viewed more often than not as a ' bridge' back to traditional financing.

So, the right partner. It's critical. The key factors that will allow you to get the best rate and day to day functionality of this type of financing are the size of your monthly a/r portfolio, its general quality, the actual size of the invoices themselves, as well as the amount of customers - i.e. a few large customers with large balances, or many customers with smaller balances. Those are driving factors in who you deal with and final approval. The best A/R financing rates in Canada tend to be in the 1.5 - 2% range per month - and proper utilization of these funds can reduce that cost significantly, almost getting you close to bank rates in select cases.

In Canada a variety of firms offer this type of service. Our recommendation to clients is to work with firms who offer confidential receivable financing, this sets you immediately apart from firms who offer such financing but impose the condition of notice to your clients on a one of or on going basis.

Common sense business fundamentals apply to this or any other business finance decision you make. Work with a trusted, credible and experienced Canadian business financing advisor who can assist you in partnering with the right firm, at competitive pricing, and under a facility which allows you achieve benefits with control of billing and collections still maintained by yourself.



Sunday, October 16, 2011

Financing Equipment For Your Business? Canadian Leasing Options Demystified !

It’s Not Always About The Monthly Payment !

Information on financing equipment in Canada. Which leasing option is best for your business. Examining Finance alternatives for Canadian business owners who are acquiring assets.

Acquiring assets for your business, from plant equipment to the latest computing technology provides Canadian business owners and financial managers with growth and profit potential. But how much time do you spend on assessing the right business leasing options when financing equipment.

Let's examine the strengths, benefits, and yes, sometime drawbacks on your lease financing options.

We're of course assuming that you conquered the lease vs. buy decision and focused on leasing business assets for the obvious reasons we've discussed in the past: monthly payment flexibility, accessing business credit outside your established bank and other facilities, and using tax and accounting scenarios to your business advantage.

So that puts you there, at the fork in the road so to speak. Namely which type of business financing equipment lease works best, for you. It's actually not a large choice... it comes down to a capital lease or an operating lease. Understanding the make up of those two transactions makes you a winner when it comes to choosing which option works best for your firm.

Let's examine Capital Lease structures... and benefits. Prior to choosing a capital lease option you have a general sense that you wish to own the asset at the end of the lease term. The capital lease, aka ' lease to own ‘effectively transfers ownership to you at the end of the lease term. Hopefully you have picked the right term on your lease, matching use of the asset to a proper amortization. In Canada that typically is 2-5 years, sometimes longer depending on the asset type.

From an accounting perspective, since you have elected the lease to own strategy via a capital lease you are no win a position to both depreciate the asset as well as record it as an asset on your balance sheet. The equipment financing industry in Canada considers full payment of the rentals, i.e. the monthly payment as the full recovery of their cost plus profit, i.e. the interest rate on your lease.

As an aside clients are always asking us about rates on business equipment leasing. Rates vary widely in Canada. How widely? Anywhere from 5 - 25% per annum and boy is that a range. Clients are astounded when we advise them they get to pick their own rate! How can that be possible? Simply because your over all credit quality and the dollar size and type of asset dictates lease pricing. You have got to simply demonstrate that credit quality or address any concerns of the lessor.

But wait... didn’t we say there were two options for financing equipment. The other option is the FMV option, known as the operating lease. Payments will always be lower than a capital lease option, simply for one reason. That’s because the operating lease scenario assumes the opposite of ownership, and that’s ' use '. You want to use an asset, not acquire the responsibility, and risk, of ownership. The good news is that if it turns out you wish to purchase the asset that a properly constructed FMV lease will allow you to still exercise that right, at a fair price.

Confused about the right business leasing options available in Canada? Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in freeing up working capital and maximizing tax and accounting treatments for business asset finance in Canada.

ABOUT THE AUTHOR : STAN PROKOP - 7 Park Avenue Financial


Saturday, October 15, 2011

Which Equipment Leasing And Lease Finance Options Suits Your Firm For Canadian Asset Financing? Does a Loan Make Sense?

Make The Right Asset Acquisition Decision

Information on equipment leasing in Canada . Canadian business owners have two lease finance choices when utilizing asset financing lease and loan strategies .

Did you hear the one about the Canadian business owner and financial manager who couldn't make a decision when it came to equipment leasing and lease finance options. Actually, we're quite sure that same conundrum faces hundreds, perhaps thousands of business owners in Canada when it comes to selecting an asset financing strategy that works... especially for their needs.

Let's examine some of those options and help you out in two clear phases of business financing decisions - the lease or buy decision, and of course picking the right lease finance option if in fact you have made that decision to move forward with one of Canada's most popular financing strategies.

So, lease..? Buy? Which one works for you? A good rule of thumb is to first consider what we can call the useful life of the asset when facing that decision. An even better rule of thumb is to think of purchasing outright if you have a strong level of confidence that the asset will last beyond a typical financing term. In Canada equipment leasing terms, (aka amortizations) are typically 2 to 5 years. (Make that 20 years if you are purchasing a corporate jet, but that isn’t really an everyday purchase!)

So that’s the ' buy ' decision. What factors can impact your decision to purse a lease finance strategy. Here our rule again is somewhat common sense oriented (we love common sense). If you think you wont use the equipment for the after a typical financing term, or if you think it might needed to have an upgrade or an add on then certainly consider an asset financing option via equipment finance leases.

Naturally there are advantages to each of our two lease and buy options. Let’s examine buying first. Purchase decisions, if done via a loan option, typically have blended payments of principal and interest and are simply spread over the life of a loan.

Although loan financing can in some cases be on a 100% basis you typically might be expected to make a down payment, in certain cases sizeable. That down payment of course lowers your monthly loan payment amount. Purchasing an asset outright, or using a term loan keeps the asset on your balance sheet, enhancing your overall fixed asset based. In many cases you can take advantage of depreciation and tax scenarios to enhance the ownership of an asset.

Lease financing. The benefits are somewhat ' classic ' in nature. In the majority of cases the asset is 100% financeable, with down payments being minimal. You have just completed a great obsolescence hedge, especially when acquiring tech type assets - think computers, servers, cloud financing, etc.
Don’t let the lease or buy decision confuse your asset acquisition strategies. Speak to a trusted credible and experience Canadian business financing advisor who can assist you with your business finance needs.

About the Author: Stan Prokop - 7 Park Avenue Financial


Friday, October 14, 2011

Start Up To Established Company – Who Qualifies for The Canadian SBL Government Loan - A Great Business Loan For Your Firm

Everything You Need To Know Re: SBL Financing

Informatiion on the Canadian SBL government loan program . Who qualifies and how to successful utilize this financing for your start up or established business . Business Loans For Your Firm.

Government ... Business Financing ... those two terms shouldn’t raise fear and apprehension in the minds of our clients. But... guess what? They often do! And that means they might be unable to access the Canadian government loan. SBL loans are quite simply, in our opinion, the absolute best method of financing your start up or small business venture .And the word ' small ' is relative, as our program pertains to businesses with revenues under 5 Million dollars. That’s not chump change, right??!

Canadian business owners looking to either start a business or expand their current business spend a lot of time seeking financing to complement those two goals. Ironically the one entity they often think can't or won't help or assist them in fact is the only entity that is set up to absolutely help them. Why, because it's actually Canadian chartered banks that take the hand off from Industry Canada to approve and administer the BIL/CSBF program in Canada. We'll keep things simple and refer to it as the SBL loan!

So who qualifies for these loans, financing things such as equipment, leaseholds, software, etc? Canadian citizens or those legally allowed to borrow in Canada are eligible to receive such financing. Naturally you can not have defaulted on a loan in the past, and you must be up to date with your income tax filings and any balances owing Canada Revenue Agency. That makes sense , doesn't it - receiving an SBL loan from the government and being in good standing with them re your personal tax filings, etc.

As we said, it’s the banks and a few other select institutions that administer and fund the government loan program. Over 7000 businesses just like yours received funding in the 2010 timeframe as an example.

So do banks ' like ' the program and recommend or steer clients toward the program. We have got our own opinions on that. While the government guarantees the majority of the loan to the bank we find that many bankers aren’t either fully up to speed with the loan approval process... and, heaven forbid...they feel it is ' a lot of paperwork '. Good commercial and small business bankers in Canada ( yes , they exist, trust us on that one please ) view SBL loans as a way to help you achieve business financing for a start up or relatively new business when they otherwise might be constrained to help you within normal bank confines .

The government loan program caps out at 500,000.00 for real estate, and 350,000.00 for equipment, leaseholds, software, etc. Loans are pegged to 3% over the current Canadian prime rate. Each loan is adjudicated for approval under the exact guidelines of the program.

We spoke earlier of clients having a fear of properly dealing with government, a business financing process, etc. Can that be avoided? It sure can. Seek an expert such as a trusted, credible and experienced Canadian business financing advisor who can literally fast track you through the entire process within a matter of days, with your co operation of course. Unlock the power of SBL loans to realize your business potential.

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


Looking For Business Financing For A Franchise ? Here’s How Franchising Financing Companies Work

Here’s How The Last Guy Financed His Franchise In Canada

Information on business financing for a franchise in Canada . What types of franchising finance companies can help you complete your purchase and how are most franchises financed in the Canadian marketplace.

It's often always about ' the other guy '. How did he, or she, get their franchise financed and completed so successfully? Let's examine business financing for a franchise in Canada. How do franchise financing companies or other institutions assist franchisees such as yourself to be successful in acquiring and growing a business?

It's of course ' the money ' i.e. the financing that is often the stumbling block to self employment, owning your own business, and financial success. And if you feel you are on 'the outside ' of business financing in Canada we can only assume that roadblock is quite formidable.

That’s when clients we talk to are quickly surprise that just a few key basics immediately puts you ' in the game ' with respect to completing a business franchise acquisition . A good place to start is ensuring you have a respectable personal credit history - it is pretty close to impossible for you to complete a franchise acquisition without being able to demonstrate that you have managed your own personal finances successfully.

At this point you only need two other things to be successful, the ability to prepare and present a finance proposal that makes sense, and, secondly, to ensure that proposal is in front of the right person.

The right person? That often is one of the biggest challenges faced by Canadian entrepreneurs looking for companies and organizations that offer true business financing for a franchise. In Canada there are only one or two specialized franchise finance firms that offer full service franchise financing. Those services might include acquiring a new franchise, refinancing a current business, acquiring real estate for the actual franchise, and of course financing equipment and potentially leaseholds to complete a purchase.

Thousands of entrepreneurs just like yourself seem to think that the Canadian chartered banks don’t fully support the financing of a new franchise. They are 100% right and 100% wrong! That's because the banks in Canada are the facilitators of the Government of Canada Small Business Loan. Over the years this business financing has been found to perfectly suit franchisee's such as yourself who are looking to acquire a new or existing franchise.

But why is the Government program so successful. 3 reasons. Great rates, terms and structures. Although the program is capped at 350,000.00 that amount certainly covers 90% of the franchises we see from a viewpoint of financing to a turnkey situation. Terms are typically 5-7 years, personal guarantees are nominal, and the best part, rates are very competitive.

To successfully complete business financing for a franchise, via an independent finance firm or the government program you need a clear business and financial plan. An experienced Canadian business financing advisor familiar with franchises can complete that for you quickly, and at a low cost. It’s a clear recap of you, the business, and the financial potential.

Franchisee's in Canada cant escape having to put their own investment into the business - that can range from 10-40% depending on a couple of key factors such as asset mix, size of transaction, and the proper execution of some clear financial projections .

Speak to a trusted, credible and experienced Canadian business financing advisor on the proper method to achieve franchise financing success. Do your homework, be properly prepared with your proposal, and get on track to independent business ownership via the franchise model in Canada.

About the Author - Stan Prokop
Canadian Business Financing

Thursday, October 13, 2011

Why A Canadian ABL Business Credit Line Is Your New Plan B For A Cash Flow Facility

Canadian Business Financing – Doing It Right The Second Time!

Information on why the ABL business credit line facility for cash flow and daily working capital needs if revitalizing Canadian business financing and providing a solid alternative to traditional financing .

Fortunately, or perhaps unfortunately .. most business owners and financial managers in Canada are familiar with Plan B. Thats the alternative when Plan A didn’t work! That's why we think this is an excellent analogy for consideration of an ABL business credit line for your daily operating line of credit and cash flow facility.

Frankly, things have never been hotter in the asset based finance industry ; ABL financing and its subsets ( receivable financing only, equipment financing only ) provide significantly more amounts of liquidity when they are benchmarked against their PLAN A competitor, Canada's chartered banks.

So how is this achieved, when both solutions, the asset based line of credit and the traditional commercial bank line of credit strives to do the same thing? It’s simple. Increased borrowing leverage on your assets .Typically this is 90% of your receivables, (not 75% you are getting now) and market value leverage on inventories based on raw materials, work in process and finished goods margins.

The other factor in PLAN B's success is simply that these facilities grow as your business grows, pretty well automatically, as the entire premise of and ABL cash flow business credit line facility is based on the business credit line growing lock step with your sales and assets. The bottom line - the financing decision is made on your sales and assets, not the overall strength and structure of your balance sheet and income statement.

Surprising to many, but not to us, is that some of the largest corporations in Canada are utilizing this type of financing, abandoning commercial bank credit facilities in the process. We don’t make any bones about it - if your firm feels its being served well by a commercial bank revolver borrowing facility then by all means stay with that low cost solution. If that isn’t the case, well you know the drill... consider PLAN B!

Let's also spend a minute on cost of ABL cash flow business lines of credit. We hate to sound wishy washy but rates are better than, equal to, or more costly than bank facilities. That kind of covers the bases, right? We simply mean to say that depending on the size of your facility, where your company is at in terms of success and failure, and most importantly, who you deal with ultimately determines your cost structure on an asset based line of credit.

The other interesting note to make about our PLAN B solution is that while we're specifically talking about an ABL as just a business credit line the reality is that it can be used for a management buy out, leveraged buy out, acquiring a competitor, etc. That’s true flexibility.

So why isn’t this type of business financing in Canada more well known? We ponder that pretty well every day. Part of the problem is that the actual players in the industry are limited, some are foreign owned, and some are highly specialized in deal size, industry appetite, etc. But we can assure you an ABL cash flow lender exists in Canada that is suited to your needs.

Current economic challenges in Canada and the world for that matter place a tremendous strain on business capital liquidity. Speak to a trusted, credible and experienced Canadian business financing advisor on why PLAN B can help your firm survive, and grow!

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 :