Receivables Purchase Finance In Canada . Don’t Get Caught Misunderstanding AR Financing strategies And Costs

Canadian Receivables Purchase Financing


Information on a receivables purchasing finance strategy in Canada . What does AR Financing cost and how to make it work in an optimal fashion.




Receivables purchasing financing in Canada. Thousands of businesses in Canada utilize AR financing when the economic climate and their particular situation does not allow them to ' extract ' the type of financing they need for their working capital and cash flow.

Is it really positive to stay ahead of the proverbial ' cash flow shortage ' 8 ball? We think there is and at the same time your firm may now be in a position to take advantage of growth opportunities it could barely even consider, let alone realize on previously.

So why is AR financing so misunderstood in Canada. Our own opinion is that its just simply poorly explained when it comes to the mechanics and the cost.

The reality is that if you know 3 basis numbers around your business, and they are numbers you should know you are in a position to determine the cost of financing A/R, and the opportunities you might be missing by not considering a receivables purchasing finance strategy.

Those 3 business elements we are speaking of are simply the size of your receivables, your day’s sales outstanding, and the interest or financing rate.

Let's examine quick example. Let's say your annual sales are 2 million dollars and you are collecting your money in 65 days, which certainly is a typical time period these days. And lets say you are being financed by a bank and the interest you are being charged is 5 %.

The Total cost to finance your A/R is, then, 2 Million dollars times 5% divided by 365 days= 17 thousand dollars.

So, is that a great number? Putting on our lawyer hat, we will ay ' it depends '. What you need to do then is determine what the average really should be for your company or industry based on its selling and collecting terms.

Rather then demonstrate another more complicated calculation lets just say that if you can reduce the amount of receivables you carry the impact of actual DSO can go a tremendous way to maintaining your company’s general cash flow health .

If managed properly a receivables purchase AR Financing program can fund all your short term capital needs. In fact you can consider growth opportunities that were never available before, while at the same time ensuring you can meet payroll, product purchases, and expansion.

In Canada AR financing is provided by independent commercial finance firms. For facilities in excess of 250k you can even get the true benefit of AR finance, which is immediate cash flow while at the same time maintaining full responsibility for customer relations, collections, etc.

If your company requires immediate cash and you are unable to obtain bank financing for any variety of reasons speak to a trusted, credible and experienced Canadian business financing advisor for your operating capital needs.





Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

The SR&ED Bridge Loan – The ‘ Hushed Truth ‘ On ( SR ED )SRED Tax Credit Financing Loans In Canada

SR&ED ( SRED ) Finance is… Alive and Kicking!

Information on the SR ED bridge loan in Canada. SRED Tax credit financing is a valuable way to enhance cash flow. SR&ED loans were and are available during recent program changes .



The SR&ED bridge loan in Canada. Did it almost become a hushed secret at a time when the very existence of the SRED tax credit seemed in doubt?

The real secret of SRED loans in Canada is that they were available for your tax credit prior to the current budget, and, guess what. ? .... They remain in place today for your tax credit financing strategy!

Most Canadian business owners who utilize the SR&ED program in Canada were keenly aware that the very existence of the tax credit seemed in doubt in 2012.

Well, the dust has settled and if we had to say there was a general consensus we would have to say that in general there's a status quo around the program. Many firms who felt they would do ' better' or ' worse ' under the new changes are finding that it’s a case of ' it depends ' - so it could have been a lot worse.

Thousands of Canadian businesses received Billions of dollars every year under the program, the formal name of course being Scientific Research & Experimental Development. Hence SR&ED. Your firm’s ability to demonstrate you have improved a process or processes, or come up with new technology or software qualified you for Sred.

We’re not ( fortunately ?) accountants , we're financiers, so we'll let you talk to your SRED consultant or advisor on the various rates changes that took place, some up, some down , under the program . We would note that the biggest change seems to be the fact that capital expenditures don't qualify under the program, but salaries and materials and portions of your overhead still qualify.

We'd love to take a poll one day on how many Canadian firms know that SRED Tax Credit Financing exists in Canada. We'd venture to say is clearly the majority, not the minority. So if we had to reveal that ' hushed secret ' on this major Canadian tax credit incentive it's simply ' Hey, you've got an options on your SR&ED tax credit .. You can wait for months, or much longer for you refund cheq. . OR ... you can finance your claim.

If you do have a claim that's prepared by an experienced and credible SRED consultant that claim can easily be financed. The basic rules around that are as follows - The SR ED bridge loan gives you approximately 70% of the face value of your claim. No payments are made during the loan period - at final approval and payment of your claim by Ottawa and the province you receive your remaining 30%, less financing costs, a simple application and you ability to provide the SRED tax credit as collateral is all that’s required.

So is SRED dead? It looks like it isn’t. We can hear the sigh of relief among all those SR&ED consultants who provide the majority of the writes ups on claims in Canada.

And, don’t forget. SRED tax credit financing loans are here today, they were here yesterday, and they will be here tomorrow.

Speak to a trusted, credible and experienced Canadian business financing advisor on help for SR ED bridge loans for working capital and cash flow for your Canadian firm.









Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

Cracking The ( SBL Loans ) Code . Fast Track Your Approval On The Canada Government Small Business Loan

Secrets To Success On the SBL Government Guaranteed Loan

Information on SBL loans in Canada . How entrepreneurs and Canadian business owners can increase Canada government small business loan approvals for financing success.



SBL Loans in Canada. How can the Canadian business owner or financial manager ' crack the code ' when it comes to the Canada small business loan. It’s of course a government program that helps businesses get the financing they might otherwise not be able to achieve.

Let's examine some crucial tips, dare we say ' secrets ' around cracking the secret code known as ' approval' on a program which has helped almost 8000 different businesses annually to either launch or grow their business.

We think we can all agree that if you don't understand the program offering then you clearly can't formulate a proper plan for approval

First of all Industry Canada although sponsoring or ' underwriting ' the program is not the direct lender under the program. So, bottom line, no trips to Ottawa required. (We lived there for ten years though and it’s highly recommended for a vacation!). So if the government loan is not obtained from the government, who do you get it from? The answer is a Canadian chartered bank, and several other miscellaneous instantiations, but essentially it’s the banks.

Since there's virtually a Canadian chartered bank on any business corner in Canada cracking the code on that is easy, right. Not so fast, partner!! The reality is that you need to find a commercial/business banker that is attuned to the program, understands it, and has the ability and credibility to sponsor and recommend your loan. That banker is best obtained via a referral from any trusted Canadian business financing advisor of yours, or even your accountant or lawyer.

To crack the code on successful approval we can summarize by saying that you need to have a solid understanding of:

Eligibility

Amount of Financing Available

Repayment Terms

Usage restriction of the funds (this is critical and widely misunderstood)

The approval process

Businesses in Canada with revenues fewer than 5 Million dollars, even if they are a total start up are eligible for the Canada Small Business Loan. (The government calls it the CSBF program / BIL)

Financing up to 500k can be sought, but that amount pertains just to real estate, so typically the cap on the program is 350k.

Repayment terms and structures are excellent - Terms of 1-7 years are generally available, 5 is a typical term we see all the time. Rates are essentially 3% over prime, making that a great rate anytime, even better in the current low interest environment.

Proceeds can be used not for cash or working capital, but for equipment leaseholds, software, computers, architectural design fees, etc.

The approval process consists essentially of a need for a crisp busines plan or executive summary, a detailed cash flow analysis and repayment plan, and miscellaneous info on yourself and your business that you would associate with any financing application.

Need help to ' crack the code '. It's not as big a secret as some maintain. Speak to a trusted, credible and experienced Canadian business financing advisor for help with ' the code '!







Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

Canadian Franchising - Key Components Of A Successful Loan For A New Or Existing Franchise

Financing A Franchise In Canada

Information on successful components of a franchise loan for a new or existing business in Canadian franchising .



Canadian franchising. Got your act together? The act we're referring to of course is your ability to successfully secure a franchise loan for a new or existing franchise in Canada.

Let's focus in on some critical components of what to do and with whom!

It's not as hard as you think to turn one of the most successful business models (franchising) into a successful financial solution for the acquisition of your business. Naturally you have the option of building or inventing your own business model in any industry but surely utilizing a proven method success already in place has significant appeal.

And the financing for your franchise can be focused on any number of industries where the franchise model is prevalent. You ability to be able to generates profits while duplicating the franchisors success is not limited to geographic issues , and , more importantly , the need to invest large amounts of capital when in fact you don't have to under the franchise model .

Many clients we talk to are looking at either acquiring an existing franchise as opposed to a new unit. There are advantages to both and we are pretty sure based on experience that neither, new or existing offer any superior advantage.

But our subject is of course focused on the financing re: your franchise loan .of that new or excising business. The one positive thing when you are considering a resale by an existing current franchisee is of course that you have access to financial performance of the existing owner.

That typically includes several years of financial statements and a proper disclosure of assets in the business. If the owner still has debt outstanding in the business that debt, in the form of bank loans or equipment leases or working capital loans, must be addressed in the context of your purchase and refinancing.

In the case of a franchise which has hard assets and leaseholds, (as opposed to a service business) an appraisal of those assets at fair market value is both recommended and in fact probably required.

We also point out to clients early in the process that they structure their purchase as an asset sale as opposed to a share sale , as share sales are exceptionally difficult to finance other than on an all cash basis - and then of course its not a financing per se, its a ' cash sale ' . A cash sale may or may not be the right thing to do. Too much equity certainly lowers your overall return on investment and ties up your personal assets, quite often permanently.

Don't forget also to address employee issues with respect to financing liability of any severance, termination scenarios, etc.

If you finance your Canadian franchising purchase via a government SBL loan (the preferred solution for many franchisees) an appraisal of an existing franchise is certainly required. If in fact a new or turnkey unit is under consideration you require a detailed business plan focusing on your experience, the industry in which you're going to participate, and a proper financial forecast that ' cash flows ' in a positive nature in order to retire the debt satisfactorily .

Other things you should focus on in your plan are customer profiles, competition analysis, etc.

Having a formal or informal network of business advisors, lawyer, accountant, and banker certainly helps.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who has the ability to turn your Canadian franchising dream into a success franchise loan resolution for a new or existing franchise.








Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

Time To Unleash An ABL Asset Line Of Credit Revolver Loan Insider Your Company? A Revolver Loan Works

What’s The Difference And Focus in ABL Financing?


Information on why an ABL revolver loan is a powerful tool in Canadian business . Finance Your Firm Via An Asset Line Of Credit



Don't you just hate them? We're talking about the ‘cash flow crowd’. That's why an ABL revolver loan via asset line of credit finance is quite simply, a way to beat that crowd at their own game.

However, all sarcasm aside, the concept of cash flow and servicing cash flow is a key driver in business credit. That's where the ABL line of credit goes against the grain. This time worn method of business revolving credit is a great solution for asset intensive businesses that cannot always meet those stringent cash flow requirements.

As we said, its all about assets, so if your firm has them, specifically A/R, inventory and equipment you're in a great position to qualify for this method of Canadian business financing for your credit line. It's been around a very long time, but quite frankly simply got more popular in recent years.

And just because it’s an alternative source of finance absolutely does not mean its anything approaching a ' lender of last resort '. The proof? Some of the largest and most successful corporations in Canada utilize it! And we’re talking public companies and private.

So why do business owners and their finance managers gravitate to an ABL revolver loan. It can be summed up in one word, flexibility. Can they be cheaper also, when it comes to financing rates? The reality for the majority of businesses is that it will be more expensive, but the trade off here is simply more liquidity. But for the record, there are numerous circumstances when ABL pricing meets or exceed that of the Canadian chartered banks. It's basically a question of overall credit quality and deal size.

Many ABL type deals are used by investors and business owners to complete a buyout transaction. That can be in the context of an acquisition or a change in overall ownership.

We do remind clients though that although the focus isn’t always on cash flow as with a bank line of credit focus the reality is that there is more monitoring and reporting when it comes to an asset line of credit finance facility . That might also include some appraisals prior to setting up the facility.

The positive trade off to that is simply that you have access to more liquidity - with receivables typically margined at 90% and inventory and equipment margins significantly exceeding Canadian chartered bank margins. The bottom line is that it’s your assets driving your access to liquidity, without being hampered by ratios or covenants.

Speak to a trusted, credible and experienced Canadian business financing advisor on why the ABL line of credit can unleash the power of liquidity for your Canadian business.






Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


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

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

Financing A Business In Canada ? What Finance Company Or Solution Works Best?

Change Your Company’s Destiny With Solid Financing Strategies & Solutions


Information on financing a business in Canada. What solutions are available via a bank or finance company to solve the needs of Canadian firms in search of capital.



Financing a business in Canada. One of our favorite writers recently reviewed a U.S. report focusing on the ability of a company to finance its business in the U.S. . . . The report was portrayed as a current ' pulse ' of the market, including input from business owners and entrepreneurs.

That got us to thinking ... hey... this is Canada. Would that current ' pulse ' of the market be similar? Let's take a look and hopefully provide some insights into Canadian business financing.

A recurring theme in the U.S. report was actually the concept of ' vanishing finances. The average business owner, certainly in the SME (small to medium enterprise) market, like its U.S. counterpart in many ways still isn’t fully recovered from the 2008- 2009 world debacle. Canada, like the U.S. saw sources of financing change considerably. Unbelievably, even many rational sources of financing simply ... disappeared.

So how did U.S. business owners address the disappearance of funding sources for their business, and in Canada what changed also? Here's where it gets a big ugly ... as the majority of respondents indicated that they had to inject additional personal equity in their business, and even resort to business and personal credit cards to fund their firm.

We still meet many busines owners who rely to some degree, sometimes significant, on credit cards to finance their business. This sometimes is a hugely double edged sword, as they do get some additional capital, but it’s sometimes at the expense of their good personal credit rating. Bottom line, if you can, it’s important to separate your business and personal life when it comes to finances.

Business lines of credit are the life blood of most firms, whether you're a small, medium or large when it comes to revenues. In the U.S. on 30% of businesses in the SME sector reported they had access or could qualify for a line of credit from a bank or finance company. One alternative that was stated as solution was the use of home equity lines of credit for busines finance. Again, it works, but not a preferred strategy!

When times are tough who can we look to from help? ' I'M FROM THE GOVERNMENT AND I AM HERE TO HELP ' As skeptical as we are of that statement the reality is that thousands of firms in Canada, ( and probably hundreds of thousands in the U.S. ) utilize the government loan program , In Canada we call it the ' SBL ' , in the U.S. its the SBA .

In Canada the cap for revenues on your firm vis a vis its ability to access the SBL is 5 Million dollars. That covers a lot of ground in Canada, and you can borrow up to 350,000$ for much needed financing for equipment, leasehold improvements, computers, software, etc. We encourage every SME business to check out the program.

So, is the situation all that bleak? We suppose it’s the glass half empty/half full saying... we'll let you decide. But you clearly can empower your company by checking out great solutions when it comes to financing a business in Canada. They include bank credit lines, receivables finance, equipment leasing, asset based lending, tax credit monetization, securitization of receivables, and cash flow working capital loans .

Whether from a bank or commercial finance company you just might find that behind those doors are some solid solutions you perhaps didn’t even know existed.

Speak to a trusted, credible and experienced Canadian business financing advisor on sources of finance for your firm.






Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com

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

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

Business Leasing & Equipment Finance Canada – Do You Know These 4 Secrets Of Lease Financing ?

Don’t Overlook These Lease Finance Benefits !


Information on business leasing in Canada . How to maximize the benefits of equipment finance via lease financing tactics to finance new or used assets .



Business leasing and equipment finance in Canada. Does your firm take advantage of these 4 secrets of lease financing in Canada, thereby maximizing the benefits of an already proven business finance tool used by 80% of North American ( that’s Canada too by the way !) business.

Let's focus on some of the advantages of leasing, thereby giving you some great reasons to consider entering into a lease when your firm acquires assets. Yes there are other ways to acquire assets - they include term loans, or putting in additional equity into your company but time and time again Canadian business owners and financial managers come to realize that lease finance is competitive and offers some of these ' special ' advantages that arent available elsewhere .

So, is lease financing the right decision? Let's examine secret # 1 - which simply speaking is your ability to get 100% financing on. And even if a down payment is in fact required 90% financing, as an example surely isn’t a bad thing. Oh and by the way, the additional costs that you might have to incur in acquiring an asset, i.e. delivery, installation, training, maintenance, etc. can easily be bundled into your transaction. If you went the term loan route many of these softer costs couldn’t be financed and therefore drain your cash flow.

Secret # 2 in business leasing. It's your ability to be a ' hedger '. A hedger? We mean of course a hedger in terms of an inflationary environment. As you make your payments over time the lease company that receives your cash of course recognizes that’s its worth less over time whenever there is positive inflation in the economy. They lose, and you win. Naturally this is probably not the greatest economic decision driver when you acquire and asset but its one more positive in the lease advantage scenario. And since lease terms are available anywhere from 2- 7 years typically you keep on being the winner.

Secret # 3- In your kingdom of business, cash flow is king. We all know that .The drain on cash flow in your company can be offset by utilizing lease financing. Firms with good credit ratings can get great rates these days, and even firms that have credit challenges are able to take care advantage of ' structured ' transactions, allowing them to acquire the asset under perhaps a shorter term or higher monthly payment.

Secret # 4- The lease financing transaction typically is complimentary to your overall banking and debt strategy. Banks or other institutions might have what we call ' negative covenants ' about how you run you business from a financial ration perspective. Leasing can often address your other loan covenants with lenders in a positive manner, but we do caution business owners and financial managers to review their covenants prior to entering into a lease.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in maximizing asset finance needs.







Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


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


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

Receivable Finance & Cash Flow Factoring – 8 Questions 8 Answers On Receivables Finance Solutions In Canada

Your Questions Finally Answered On A/R Finance In Canada

Information on receivable finance and cash flow factoring in Canada . Answers to questions you need to ask before entering into the right receivables finance strategy .


Receivable finance in Canada. Boy do we get a lot of questions around this single method of financing receivables in Canada. Another term for the same subject is of course ' cash flow factoring’

So let’s take some of those often asked questions, 8 in total and... You guessed it, answer them!

Question # 1- Does a Canadian start up or early stage company utilize receivable finance? The answer is a resounding yes. The reality is of course that same business is often ineligible to obtain most other methods of Canadian business financing by the very nature of the start up. Since cash flow factoring focuses on the asset of receivables it makes sense it’s a good solution for a start up firm

Question # 2 - Can you set this type of facility up on your own without the assistance of anyone? Again, it’s a resounding yes. However, due to the fragmented and generally misunderstood issues around the subject it would make often more sense to use a Canadian business financing advisor who is aware of the issues, pitfalls, and pricing around A/R finance. Another point is that this method of financing is clearly not all about price after you get into how it works daily mechanics, etc.

Questions # 3 - another great one. Does all of your A/R investment need to be financed at all times? The answer is no... This is clearly one method of financing your business that is essentially ‘pay for only what you use '. Although some facilities might require a minimum usage essentially it’s your call as to what A/R and when to finance.

Question # 4 - Are there contacts involved with respect to committing to such a facility. The answer is that certain facilities require no contract how most cash flow factoring firms do often require a commitment from your firm. That can often be negotiated and allow you to have some flexibility built into it. The reality here though is that you typically will use this type of finance for a year anyway as you move towards a more traditional bank borrowing.

Question # 5 - Does a firm have to have good financials to qualify. In general the answer is no. Unless your firm is in a death spiral past financial challenges your firm faces do not preclude you from obtaining receivable finance. As a rule if your sales are stable or growing you're an excellent candidate for cash flow factoring.

Question # 6 - Who exactly provides cash flow finance in Canada. For a starter it’s not the banks when it comes to invoice financing. There are firms that are very small in nature, some are subsidiaries of U.S. firms, and some are substantial on their own, and Canadian owned. Pricing, qualification, deal size, etc all vary so here again it makes sense to work with someone who is knowledgeable about industry players, their offering, and reputation. Again, beware of the ' low price ' carrot - it’s often, if not always, what it seems.

Question # 7- Pricing. Ah, we though you would never ask. As a general rule factoring in Canada is sin the 2% range, sometimes more, sometimes less. The industry views this monthly rate as a discount, i.e. it buys your A/R at a 2% discount to its value. You can offset this cost by purchasing smarter, taking discounts from suppliers, and selling and collecting more, thereby increasing your profits. And don’t forget, you're simply not carrying receivables for 60 or 90 days anymore, but it makes total sense still to stay on top of your collections to reduce costs to finance.

Last question, Question # 8 - what is the actual difference between A/R finance and a bank facility. As a joke we could say ' the ability to get one ‘! But the reality is that we've partially answered that one already. Receivables finance is the purchase of your sales and receivables as you make that sale and invoice. Banking is simply offering financing that takes your receivables as a back up collateral. That's a simplistic answer, but it’s a basic one.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in your receivable finance and cash flow factoring needs.







Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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


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

Restaurant Financing In Canada - Your Hospitality Loan Finance Primer . Now You Know How!

How To Address The Financing Of A Restaurant In Canada

Information on restaurant financing in Canada . Putting the right hospitality loan in place might not be as difficult a finance challenge as you think !

Restaurant financing in Canada. Let's talk about some common sense financial approaches to getting the right hospitality loan finance in place for your chosen restaurant business. Oh, and by the way, that might be a franchise business, or it might be your own unique concept; there are advantages to both.

We use the term ' financial approach ‘. We can almost see our clients grimace when we use the term as it conjures up things like accounting, financial statements, etc. The reality is though that many entrepreneurs we meet in the hospitality industry are running on a bit too much emotion and ego and a need a little more of a financial approach to simple basics around a restaurant such as cash flow, profits, return on investment, etc.

It's really the cash flow potential of a restaurant that will determine a common sense price for you, and down the road that same metric will be a key driver in the valuation when you want to sell the business .

Getting a solid handle on the cash flow around your business allows you to be successful in several areas. Those areas include refinancing, selling your businesses, and, as we said determining if your initial investment in the business is reasonable when it comes to total return to yourself. That total return is usually viewed by the entrepreneur in two ways, the salary that he or she can take from the business, as well as the equity that the restaurant is hopefully building up in terms of valuation.

Quite frankly getting a good handle on the cash flow of the restaurant, independent or franchise... allows you to make a proper choice when it comes down to several businesses that you might be looking at .

When a lender, or yourself looks at the financial projection, or the actual financials of the restaurant they are looking to get a sense around normalizing the cash flows, as many restaurant owners take out a salary that might be higher, or lower, than the industry norm.

Be carefull in your projections, or analysis of an existing restaurant that items such as personal vehicles, salaries to family members, and advances to owner’s dont distort the true profit and loss of the business.

The ability to service lease and loan debt is critical in restaurant financing. Real care must be taken to ensure you are capturing all the debt of the business and that you feel comfortable with the overall cash flow.

The amount you are required to finance a restaurant in Canada varies, and typically it’s anywhere from 10-50% from a viewpoint of owner equity.

Due to the higher risk surrounding perceptions of hospitality loan finance care must be taken to source the proper financing. Typical financing programs that best suit Canadian restaurant finance are the SBL Government business loan, aka the 'CSBF' loan, as well as lease and equpment financing that can be easily accomplished via an independent lease finance firm.

Typical payback scenarios are 3-5 years, sometimes longer, depending on the size of the business and the loan. Leaseholds are best financed under our aforementioned SBL program.

Take a practical, not an emotional approach to your restaurant financing challenge - it will pay off in the long run. For specialized assistance speak to a trusted, credible and experienced Canadian business financing advisor for your hospitality loan finance needs.



Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

Damn You SBL Canadian Government Loans ! Secrets To Unlock Federal CSBF Loan Success

Solid Tips and Info On The Canada Small Business Loan –
P.S. – It’s Not That Small


Information on the SBL loan program in Canada . Can Canadian government federal loan guarantees help finance your business . Here’s how! CSBF loans work.



Damn you SBL Canadian government loans !That's one battle cry of Canadian business owners who we meet that are either desperately seeking knowledge in the area of the federal Small business loan or who feel frustrated around what they feel the process is to successfully secure such a loan.

A better cry they w would prefer would probably be ' Release the coffers ‘. They would of course prefer to be among the many thousands (approximately 8000) of businesses in Canada that annually are successful in complete the gov't small business loan.

So whets the difference between winning and losing when it comes to securing a government SBL loan? Several factors come into play... let’s discuss some of the important ones.

It's no secret of course why business owner seek this loan. it has strong rates, terms and structures that quite frankly even large corporate borrowers can secure. What do we mean by that? For one thing, the majority of private businesses in Canada have to ensure the owners are prepared t personally guarantee their loans and credit lines. That’s the same Canadian government loans, except, and it’s a big except, your guarantee is limited to 25% of the loan. Talk about a good thing!

Another point in the SBL scenario is that the majority of loans and leases in Canada cannot be prepaid without penalty. By utilizing federal government loans for your business you can prepay with penalty, if you're fortunate enough to be able to. While many Canadian business owners and financial managers would like to be in a position to do this, quite frankly if you are financing assets and leaseholds at good rates and terms why wouldn’t you want to use valuable cash flow elsewhere, such as growing your business .

Many Canadian businesses do not feel the banks are pro lending when it comes to smaller and medium sized businesses. By the way, the actual revenue cap for the federal SBL loan is 5 million dollars, so we do acknowledge that that eliminate many larger firms who certainly wish they could secure the SBL loan.

Whether or not you have confidence in the banking system when it comes to corporate lending is a whole different discussion , the reality is that that lack of confidence should go away when you're applying for a govt small business loan .

Critical to successfully securing the amount of financing you need under this great loan product is the ability to find and work with a banker who understands the program. This unfortunately is a problem businesses should have to deal with, but are faced with when it comes to the SBL program. In our opinion many bankers simply don’t understand or want to bother with the program. It's important to secure the services of a great SBL banker who recognizes you as a client the bank wants to have, and keep.

Some other great secrets around being 100% successful in SBL loans? Not as complicated as you think.

Understand the nature of the program and what it can and can’t do

Prepare a solid proposal that provides ALL of info required on an SBL
Application - there are 6 or 7 key basic criteria

Anticipate questions and any worst case scenario

You may wish to increase the chances of your SBL Canadian government loans process by doing something very simple - secure the services of an expert - Typically a trusted , credible and experienced Canadian business advisor who can fast track your transaction, and , by the way, one who probably knows the best banker in town anyway!








Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

Looking For Franchise Business Funding ? Stay In The Loop On What’s Important For Canadian Business Lenders When It Comes To Franchising Loans

What You Need To Know Franchise Loan Financing In Canada

Information on franchise business funding in Canada . What take aways you need for business lenders around your franchising loan .




‘In the loop’ ... it’s of course being informed and up to date on a subject. So when it comes to a decision such around franchise business funding and staying in the loop on issue surrounding franchising loans, lenders, and other related issues what could be more important ? !

The whole issue of purchasing a franchise and then sourcing franchising loans to complete that purchase is clearly a journey these days... we like to think about it as simply basic steps you can implement in an orderly fashion.

It should be no secret that the franchise you ultimately choose, whether it be in hospitability or service business has to match and complement your financial resources. Naturally related to those decisions are key areas such as suitability of the business when it comes to work experience, fields of interest, etc.

What many franchisees may not realize is that your actual experience in the business is certainly one key factor that a franchise lender considers with respect to a final approval of your transaction. This is probably most evident in the hospitality area, when it comes to a restaurant as an example.

While we personally believe a solid mix of business and marketing skills should make a strong case for a positive supplement to your franchise loan approval the hard reality is that in many cases no experience in an industry often raises a red flag with lenders when it comes to probability of financial success in the business. In any business management experience, rather mis - management is cited as a case for business failure, and this is equally so in franchising in Canada.

Your own investment in the business, i.e. your equity or down payment is of course a strong motivator for you to make the right decision. Although we see some franchisors providing what we could call at best ' guidance ' to your financing needs it should be clearly understood that you're on your own when it comes to franchise business funding in Canada . The one caveat is that in some cases franchisors have a program established with a financial institution of some type, but this is absolutely certainly no guarantee of final approval.

Doing the right due diligence around the financial aspects of your purchase is critical. Understanding revenue potential, profits after your salary that would define a reasonable return on investment, and the ability to finance the business on an ongoing basis are key to being ' in the loop. This can be accomplished through research, talking to current franchisees in the system, and getting some solid advice or mentoring from your accountant, lawyers, or business peers.

Franchising sales account for a huge part of the Canadian economy. Financing your franchise via a specialized loan program such as the Government SBL/BIL program allows you to limit your liability while at the same time having access to solid rates, terms and structures. It quite frankly the ' proper ' financing for your franchising business loan.

Speak to a trusted, credible and experienced Canadian business financing advisor on which type of financing best suits your needs... and , as we said, you'll be ' in the loop '!






Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

Does An ABL Loan Deserve A Full Chapter In ‘ The Book Of Awesome’? Asset Revolving Line Of Credit Facts For Canada !

Here’s What You Get With An Asset Based Line of Credit


Information on why the ABL asset loan and revolving line of credit in Canada is a perfect solution for interim and long term financing needs .


Is an ABL loan, i.e. an asset revolving line of credit really a candidate for a position in the business Book of ' Awesome '? We think so. Here's why.

While many forms of Canadian business financing have been around for, well... almost ever... an asset based line of credit is somewhat of the new kid on the block in the context of financing vehicles for business owners and financial managers in Canada.

A key emphasis in various forms of business financing is the concept of ' cash flow' when it comes to repayment of your loans and borrowing facilities. That’s where the ‘asset crowd ' differs; the asset based line of credit focuses on assets not necessarily cash flow.

So why are more and more Canadian firms, start up, small, and large in size using this method of business lines of credit? Simply because if your business has solid assets in receivables and inventory it immediately qualifies for ABL loan finance. While we do use the term ' loan ' often in the context of our description of this method of finance in reality its not a loan per se, its a monetization of the asset on the left hand side of your balance sheet .

And by the way, although we specifically mentioned A/R and inventory it can include fixed assets and real estate, even tax credits as part of the mix. But truth is told receivables and inventory make up the majority of the asset based line of credit.

So who in fact uses, and considers this type of finance. It certainly runs the gamut, from wholesalers and distributors, major retailers (here the focus is on inventory), manufacturers, etc. If there is a bottom line, whether you are a service or product oriented company ....it’s simply that if you have A/R and or inventory you qualify.

A quick note that some of the largest and most recognized companies in Canada (and the world) utilize ABL.

Several types of Canadian business financing in Canada are considered somewhat ' alternative ' when they are bench'marked against traditional business lines of credit. However our perception is that the ABL loan becomes a bit more popular everyday - it's absolutely positively not the ' last resort ' scenario that some seem to make out.

Pricing on the asset revolving line of credit differs. While it absolutely can be competitive with bank pricing for firms of that quality quite often it comes at a higher cost , but, and its a but but ( so to speak!) it provides you with significantly more liquidity. That's because margining of a/r tends to be in the 90% range, even higher on occasion, and inventory financing within you facility can range anywhere from 30- 70%... which in some cases is 30-70% more than you are getting today !

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in determining if ABL is right for you. You just might now understand why an ABL loan seems to definitely qualify for its chapter in the Book of Awesome.







Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

Discovered ! The Cheapest Cash Flow Financing And Business Liquidity Solutions In Canada !

Working Capital Financing Cost – Not What You Thought


Information on the cost of cash flow financing in Canada and what business liquidity solutions are available as Canadian business financing alternatives .


So, are you ready? What in fact is he lowest cost (we kind of hate to use the word ' cheapest ‘) when it comes to working capital needs.

The answer? The best source of financing is actually ‘Reducing the need to finance operating needs'!

Changes that you can make in your business today can actually significantly reduce the need for sourcing traditional and alternative methods of finance.

Is your firm in fact limping along in today’s somewhat turbulent times - there doesnt seem to be a day when bad news externally seems to affect our businesses. There has probably never been more of a focus on cash and the ability to get capital for and into your business. Naturally one option is to stop spending or growing, but that’s the least desired solution by the average Canadian business owner and financial manager.

What's more difficult for you? In many cases it's simply managing it, and that gets more complex every day. When you think of it, if you had the ability to borrow or finance less and you were able to manage your current assets more effectively you have simply made yourself more competitive out there in your industry.

So the essence of our theme today is simply managing current assets - cash, receivables, inventory, prepaid more effectively.

Talking to our clients makes the situation even clearer. Why ? Because they profitability with liquidity when it comes to assets and asset management. You must be able to convert current assets into cash.

So how do you accelerate those cash flows? You do that by monetizing current assets when you need to, and focusing on faster collections. Monetizing those inventories and receivables can be done via traditional bank lines of credit, or the alternative: A/R and inventory credit lines from non-banks in Canada.

The best way to think of this is to focus on the fact that as your current asset accounts grow cash generally goes down. Increasing your payables is a nice offset to that, but it’s a tender balancing act when it comes to suppliers, employees and government remittances being paid on time!

Since your profits are embedded in your accounts receivable collecting them more quickly simply enhances your self cash flow financing.

Business liquidity solutions in Canada come in many forms. They include bank operating lines, asset based credit facilities, and working capital term loans. More costly solutions , but equally or even more effective sometimes are receivable financing strategies, inventory and supply chain finance, or even monetizing longer term receivables such as a SR&ED credit that may be due your firm .

If you want to explore the best cash flow financing and liquidity solutions speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with advice on internal and external strategies to enhance cash.








Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

The secret of cash flow financing and business liquidity solutoins . What if you had both the knowledge and access to low cost Canadian business financing solutions in Canada .

Canadian Business Financing: Are You Making Best Use Of Equipment Leasing And Canadian Asset Finance ?

Canadian Business Financing: Are You Making Best Use Of Equipment Leasing And Canadian Asset Finance ?

Are You Making Best Use Of Equipment Leasing And Canadian Asset Finance ?

Maximize Canadian Business Financing With Lease and Asset Financing Options


Information on equipment leasing and finance in Canada . Why asset financing is logical solution to fixed asset acquisition




It's a simple question really... is your firm making the best use, and taking advantage of the use of equipment leasing and finance when it comes to asset acquisition?

Just the use of your owner and management time in sourcing solid lease finance solutions can sometimes sap your business strength! When you think of it there are probably about 5 key steps in equipment leasing and finance strategies you employ.

First of all you must decide on which solution works best for your firm, in the context of what’s available in the Canadian marketplace. Here there are a plethora of firms, many specializing in either specific assets or deal size.

Step # 2 is simply getting a ' package ' of relevant info together - that might include equipment quotes or invoices, as well as the financial information you might be required to provide that demonstrates that the deal ' cash flows' in the eyes of your lessor .

A challenge faced by most business owners is that asset finance lease approval is heavily focused on historical and present cash flow. If you don't have those then your transaction will have to be ' structured ' in some manner. That might mean a down payment, a shorter amortization, or additional collateral or guarantees.

Step 3 is the idea of presenting your package to a lessor that makes sense for your firm. Don't forget in Canada that the equipment finance marketplace is really broken down into 3 categories - small, medium and larger size transactions. Small in general might be termed as under 100k... mid we could say is up to the 500k range, and larger ticket transactions can be financed in the million of dollars if suitable credit and asset criteria is in place .

Complimenting these three asset lessors are of course captive firms who actually manufacture the product and then offer financing to your firm. The computer industry is a good example of this type of lessor - and by the way they offer the best rates, terms and structures given they are incented to approve your transaction, allowing them to make a sale at the same time!

Step 4 in our whole process is the negotiation process. Here you'll be asked to potentially provide more information and clarify what type of transaction works for you in the case of the asset category. Knowing the benefits, advantages and potential downside of capital or operating leases is key to your success at this point.

As you head into step # 4 remember that lessors in Canada have numerous ways to enhance their yield, at your expense. So understand some of the nuances of terms such payments in advance, or what the down payment or security deposit does to your pricing, and the lessor yield.
Companies with decent credit history have more negotiating power than they think, given that it’s currently a very competitive market in Canada when it comes to asset finance.

The last part of your transaction, our step # 4, is simply documentation and legal requirements around the transaction. This involves the lessors registration of collateral, waivers from any other secured creditors, etc.

If you're a Canadian business owner or financial manager that simply doesnt have the time to prepare information, negotiate, and then select from hundreds of capital sources in Canada for equipment finance then consider using the services of a trusted, credible an experienced Canadian business financing advisor . Just going through the whole 5 step process we have outlined sometimes becomes a job in and of itself - so consider some expert help when it’s available.







Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

Where Cash Flow Factoring Fits In The Jungle Of Business Financing And Short Term AR Finance

What Cash Flow Strategy Fits Your Company Needs?



Information on AR factoring as a short term finance strategy for cash flow in Canada.




No shocking news to the business owner or financial manager... but it's a jungle out there when it comes to Canadian business financing!

A lot of options and a lot of confusion... right? So where exactly does cash flow factoring ... i.e. short term AR Financing fit into the picture. Let's try and clarify.

Fundamentally it’s not that complicated... but there is a a lot of misinformation out there about pricing and daily mechanics... so lets clarify.

Essentially you are borrowing against receivables. Easy to understand so far, right? There are different reason why clients we talk to consider this option. For some its really basic... they want to eliminate themselves from the whole process of credit and collections.

For others it's simply a case of being unable to access traditional financing, or even better traditional financing in the amount they need. That applies very specifically to companies in high growth mode, or perhaps they are even a start up.

By selling your receivables to a third party, typically a commercial finance firm, you receive immediate cash and your facility is repaid as those receivables are collected.

In a perfect world you want to keep / retain the rights to the servicing and collections of that AR... your firm wants to be in a position to collect and service and liaise with your valued clients. There is a way to do that in Canadian receivable finance.

The whole process of a short term factoring strategy is pretty fundamental - you simply sell something for less than it's worth. In this case it's the receivable Using a $100,000.00 receivable as an example you invoice the client as soon as your firm has performed its product shipment or service - and you receive , that same day approximately $90,000.00 . You receive the other 10k, less financing costs, when your client pays... and typically that discount is approx 2 per cent if you are billing on a 30 day period.

The Canadian business owner and financial manager quickly realizes that if your customer is paying relatively promptly you have just created your own large cash flow machine.

So the biggest advantage to factoring in Canada is simply ' immediate access to cash ‘. You do have that financing charge , but surely you haven’t forgotten Business Finance 101 that says that you are in fact incurring costs to carry that receivable already .. And if you had the cash the same day you invoiced you would be in a position to buy more and sell more, generating even further profits instead of wafting 1-3 months to collect that AR!

Shorter term financing via an AR Cash flow strategy can also include that ' confidential ' component we discussed - allowing you to bill and collect your own receivables without notice to any client, supply, other lender, etc. Typically you can't have both a bank and factor strategy in place, but the reality is that many clients simply can't access bank finance, so they gravitate to cash flow factoring.

Speak to a trusted, credible and experienced Canadian business financing advisor on clearing up the ' jungle ' of Canadian business financing when it comes to a cash flow strategy.





Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

Fixing 3 ( More ) Parasites Of Business Cash Flow . Solutions For Management Financing Challenges In Canada

Power Up Business Cash With These Solutions and Tools!


Information on business cash flow . Fixing management financing challenges so your firm never runs out of cash and working capital .



Parasites of Business cash flow in Canada. We wrote recently on 2 specific parasites concerning management financing challenges for your business. They were, specifically, mismanagement of your cash flow cycle, and... Secondly, poor use of operating leverage.

That word parasite conjures up an image of a ' leech ‘...or ' sponge ‘. It seems somewhat appropriate then to perhaps address 3 more of those parasites of your business cash and working capital challenge.

We'll start with # 1, which is the concept of ' Financial Leverage '. A good way to think of that is that it’s the idea of how different types of financing affect you use affects your net profit. To finance your firm it always comes down to the fork in the crossroads - ie debt or equity. If your firm can pull off acquiring and managing as much debt as possible in a solid manner you naturally restrict outside ability to dilute your equity position.

Essentially that’s a good thing. The only problem is that your lenders want to get paid, either periodically or on a revolving basis. Ultimately its one of the most important ' big picture ' decisions you have to make in running and financing your business.

Potential parasite #2 in our analysis today is the concept of maturing debt. Along with that comes another business decision (boy, there seems to be a lot of important decisions to be addressed today!) which is the idea of taking on debt on either a short term or operating basis. You also don't want to be caught in the additional common situation of having to guess where interest rates must go

Potential parasite # 3 is the idea of current asset management. Here's where things can really go wrong, and generally speaking, fairly quickly.

Did you know that as a business owner and financial manager you have minute by minute access to one of the most powerful tools in business analysis... we think, in the world. Simply speaking, it’s the understanding and analysis of your ongoing receivables and inventory. Your ability to track sales and inventory should have bells going on in your head when things feel like they are going awry. Simply monitor over time your sales to receivables ratio, and in the case of inventory ensure your inventory isn't trending up when your sales are not!

The real ' quality ' of your profits / income is ultimately related to your management of these 3 potential parasites.

In Canada you can fix, eliminate, or control these parasites in a variety of ways. They include a term cash flow loan, receivable and inventory financing, true asset based lending facilities, or the monetization of tax credits such as the SR&ED credit.

Speak to a trusted, credible and experienced Canadian business financing advisor on how you can find and deliver on solutions to management financing challenges.



Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

Don’t Make These Blunders When Financing A Canadian Franchise . Franchising In Canada … Done Right!

Are You Doing The Right Things When It Comes To Franchise Financing In Canada?


Information on franchising in Canada. Financing a Canadian franchise requires not making certain costly mistakes



A blunder. We're told it's about ' acting blindly ‘... ‘without guidance'. Can you actually afford to make a blunder when it comes to financing a Canadian Franchise? Talk about a costly mistake.

Let’s examine some ways in which you can avoid making those serious mistakes when looking at franchising in Canada and the financing needed to complete that purchase. And by the way that includes buying a resale franchise, or of course a new ' turnkey ' operation.

It goes without saying that you need to do your homework in order to ensure that Murphy's Law doesnt kick in... ‘What can go wrong ... will '. We're also often asked if there is a difference in working with a Canadian franchisor as opposed to a U.S. founded organization. We certainly don't think so... and the reality is you may well be dealing with a Canadian master franchisee anyway. That's of course a Canadian or Canadian organization who has secured the U.S. rights for Canada.

Identifying the right amount of capital required for your business franchise is critical. That of course involves the initial franchise fee, as well as the amount then required to facilitate the entire purchase. That might include equipment, leaseholds, inventory, etc.

It's at this time that many potential Canadian franchisees make their first ' blunder ‘. They forget to consider longer term working capital. That’s the funds required to run their business on a daily basis, re operating costs. Remember that your business can't grow without a proper base of working capital.

And coming back to our debt and equity scenario, spend some time understanding how the right mix of personal investment and debt plays out relative to leverage, risk, depletion of personal resources, etc.

There is a danger in making a sizable non refundable deposit if in fact you are ultimately unable to complete financing for your Canadian franchise. And talk about a sinking feeling if you complete a transaction and ultimately find you are not suited to the nature of the business with respect to the personal satisfaction that comes from creating and growing your own business.

There is probably no better ' homework ' when it comes to a Canadian franchise opportunity than talking to other franchisees within the system you are considering - they might also provide valuable insights into how they financed their franchise and what obstacles you might need to overcome .

We're not so sure you can call it a blunder, but it's certainly an over expectation if you think your franchisor will provide or significantly help you with the financing of your purchase. In fact you might be surprised that it’s the federal government, via the CSBF program that in fact finances thousands of franchises in Canada. Avoiding blunders in making that program successful for yourself is a whole other subject.

Avoid those blunders we're talking about when assessing your options in franchising in Canada when it comes to selection and finance of your business.

Consider also speaking to a good franchise lawyer, accountant or Canadian business financing advisor who can assist you in eliminating costly mistakes and enhancing chances for success.








Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

2 Signs Your Business Is Going Broke And Your Solutions For Fixing Business Cash Flow Problems

Solving Business Cash Flow Problems .. Today Or Before They Happen

Business Cash flow problems can be solved with the right info an Help . Solutions for business liquidity before you hit the wall!


Can you spot (or have you spotted already) business cash flow problems inside your firm? A better question might be - have you got some solutions to those problems! We've got some insights into both today.

Business failure, temporarily, (or otherwise!) often comes back to cash flow and working capital. In some cases it's an ongoing situation that saps management strength - at other times it's a time bomb inside your firm, seeming ready to explode at any time as you hit the proverbial cash flow shortage wall!

Your ability to perceive this challenge and correct it is of course critical.

Let's get to the meat of the matter... jumping right into the matter. Here are 2 key areas or reasons why you might be ' going broke ‘, and maybe not know why. The term ‘ going broke ‘ is a bit unsophisticated .. but anyway …here goes!
Your ongoing challenges might involve one of these, or both . We'll let you make the call.

Sign # 1- your cash flow cycle. Simply speaking it’s the relationship around the ' in’s and outs' of your business. It's the time cycle between collections and payables. We met with a CEO yesterday of a larger firm who commented that in his cash flow cycle they typically get paid by clients before suppliers are paid. They are in the food industry - and that would be typical. When that issue is reversed, i.e. suppliers needing to be paid before clients pay you face a cash flow cycle problem.

And by the way, you need the right mix of those ' current assets ' when it comes to turnover. When your a/r or inventories become ' bloated ' that's a sign of ' going broke '.

Sign # 2- Leverage. It's a common term that the business financial folks use. It's essentially the fixed costs in comparison to the profits you can earn from selling more. As you look to buying more assets, or even buying a competitor that leverage issue becomes critical. Buying more assets and taking on more fixed costs just puts more pressure on you to breakeven, let alone make a profit.

Too much leverage ultimately will lead to business failure.

Remember also that one of the biggest misconceptions in business is that profits aren't cash. Lenders in Canada generally aren't impressed by romantic, slick company names, high ambitions and future profits. They focus on cash flow and the quality of earnings - when you track income and cash flow over time they should gradually come together.

Our final advice - seek out the ' bad news ' in your cash flow problems - and understand where they are coming from.

Solutions in Canada are abundant - depending on where you are in the business maturity cycle - i.e. start up, growth, mature, etc. Those solutions include solid banking support, receivable and contract finance, inventory and P.O. finance solutions, and asset based lending and equipment finance.

Speak to a trusted, credible and experienced Canadian business financing advisor on how you can utilize these to... dare we say it... not go broke!



Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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