Debt Financing In Canada
Information on sources of debt financing in Canada . Business Loans In Canada for the right reason !
Debt financing sources in Canada. Most business owners and financial managers would agree that a little creativity can sometimes go a long way in helping a business achieve the stability and financial resources a business need to succeed.
Let's take a quick ' tour ' around some of those sources which include term loans, leases, and some other less known types of financing.
The reality is of course that different sources of debt meet different needs, so you need a sense of the ' lay of the land' when you're evaluating solutions.
It's also all about not ' wasting time ' and there is no better example of this in Canada than spending a lot of time, and in some case dollars in pursuing Chartered bank financing in Canada that will not happen .
Canada's chartered banks are the backbone of Canadian business finance. They are trusted proven providers of capital... if, and it’s a huge if, you can meet their criteria. However in fast moving or tough economies, while the banks would in fact be the best solution for you business, the reality is that on occasion they aren't suited to very specific needs.
Are there some quick ways to evaluate your ability to positive secure bank debt? There definitely are, and if you feel you can meet 4 - 5 key criteria then you should absolutely pursue Chartered bank debt in Canada.
What are those criteria then? Simply speaking they are profits, assets and collateral, sound operating ratios, repayment with outside collateral ( personal net worth issues, etc ), and finally your ability to summarize all that, typically in the form of a business plan or executive summary .
Banks look for positive cash flow. When you line up ' cash flow lenders' with ' balance sheet lenders ' banks typically are in the cash flow line up, required a positive cash flow ratio of typically 1.25: 1.
When it comes to collateral required for loans banks focus on the more liquid ones, such as receivables and verifiable inventory (not always inventory though).
Operating and liquidity ratio calculations play a key role in bank loans. They include leverage via debt to equity calcs, our aforementioned cash flow ratio, working capital rations, etc.
You can absolutely be expected to be asked for a personal guarantee when it comes to bank debt financing in Canada. Other sources of financing may also include personal guarantees, but they play less of a role in final approval.
You have to be able to summarize a bank proposal effectively. This can be done via a Canadian business financing advisor, your accountant, or some other third party. It’s critical to put forth a realistic financial and operating document that demonstrates repayment and viability.
Other sources of debt financing for business loans include asset based lenders, lessors, the government SBL program, cash flow loans, etc.
It's clear that it becomes a case of identifying what you need, and what you realistically can qualify for.
Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in identifying sources of debt finance and loans in Canada that make sense ... specifically for your firm!
CANADIAN DEBT FINANCING EXPERTISE
Stan Prokop - founder of 7 Park Avenue Financial –
http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/debt_financing_sources_canada_business_loans.html
Stan Prokop
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