Looking For Bank Financing In Canada ? Commercial & Corporate Banking Success Strategies

How To Approach Your Need For Bank Financing


Information on accessing commercial corporate banking facilities in Canada . Banking financing success tips for the Canadian borrower.



Bank financing in Canada. Should it be a mystery to the Canadian business borrower seeking a commercial corporate banking facility? We don't think so, and here's why.

It's no secret that the Canadian chartered banks are typically the first ' go to ‘solution for both debt and operating financing. Because of our strong centralized banking system the product and service availability in Canada for commercial borrowers covers a broad spectrum - business lines of credit, term loans, etc.

So what are some of the reasons that your firm’s ability to seemingly tap these great sources of capital seem unattainable? It comes down to understanding where the other side is coming from, and we can guarantee you that the ' other side' is focusing on first: CASH FLOW... and second ' Collateral. And those two items by the way are pretty well in order of priority!

Another point that needs to be mentioned and addressed in either your discussions or presentation (verbal or otherwise) is the concept that those cash flows must have some sort of level of predictability.

Many of the products and services offered by banks in Canada are also offered by what we term ' non bank ' commercial lenders. They are not regulated. Banks of course are strongly regulated in Canada (we hope!). The reason they take a bit more of a conservative approach is that they are constantly balance their own capital, profits, and general liquidity. It would seem they have the same challenges as your firm!!

The emphasis on those points we have mentioned above relates to how they address lending criteria, when it comes to types of assets financed, cash flow coverage, and personal guarantees. The Canadian business borrower needs to understand that its bank criterion that determine your loan pricing, rates, and where you stand in the banks credit scoring model. (Investment grade is good ... if you're in special loans that’s bad).

Many Canadian firms that accessed bank financing might in fact find themselves being placed in the ' special loan ' category we mentioned above. Your bank facilities are recorded as none performing, and in general the bank wants you to leave. Not all the time... most of the time. Business borrowers who find themselves in special loans are very salvageable when it comes to exiting a bank relationship. Often they might simply be ' out of covenant ' and that can be addressed by altering criteria of a non bank lender. We often speak to clients that are in Special Loans that are in fact courting other banks .It’s our experience that banks don’t purchase their competitors problems; it’s as simple as that. So non bank solutions are the best for the exiting of a Special loan scenario.

Another key premise to get under you belt is the fact that bank pricing is pretty well the best and lowest priced financing in Canada. Banks don’t have upside on your deal - they just want to get paid. So address your presentation, (again verbal or written) with a focus on repayment and stability and management experience. If you look at the financial statements of most banks we think you'd find that commercial borrowing isn’t the real profit center.

How do you find the best corporate bankers in Canada? Please not we said bankers, not banks. You do that by developing a relationship with sources that know who these specific bankers are.

As a final note, because you're getting the lower rates in Canada we don’t recommend posturing for the last basis point in rate reduction. Instead focus on covenants, guarantees, and relationships.

Bank financing and commercial corporate banking is great financing. It's available to many, but not all. If you do qualify speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in forging a facility that makes sense for your firm.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS BANKING FINANCE 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/bank_financing_commercial_corporate_banking_canada.html