Business Purchase Financing Tips . End The Confusion On The Type Of Loan You Need To Buy A Company

Conventional and alternative solutions to business acquisition financing in Canada.

OVERVIEW – Information on business purchase financing in Canada . When you buy a business or competitor what type of loan and financial approach is required . Key issues to consider and focus on.



We've spoken of buying a business and the types of purchase financing and loan that will help you accomplish that goal.

If you are using a more traditional approach and utilizing a Canadian chartered bank to finance the purchase we highlighted key elements of a successful close - management depth and experience, a strong business plan, and solid financial projections.

Don't forget also that typically in a more traditional process, i.e. through a bank you will also be required to provide personal financials and the guarantees that come with that. At the end of the day you want to be viewed as an owner or management team that has a strategy and objective, and that you are going to truly focus on growth and profits.

That issue of personal guarantees always comes up in client discussions. While we can in a general sense that any business purchase in the SME sector in Canada will come with that personal guarantee of the owner we can also quite safely say that you have some negotiating power on that issue that you might not know you had.

Are there any alternatives in the whole issue of the personal guarantee? We can offer up that different banks and finance firms have different focuses on the personal guarantee, and the reality is that if you are dealing with an experienced credible banker that has credibility with the bank underwriters you definitely have someone on your side in this issue.

As a final comment you can focus on some restrictions to your guarantee commitment, and you can even have a long term objective with your banker of then focusing on a release of the guarantee sometime in the future.

When we get down to the actual finance structure of your transaction it's critical to focus on the key assets of the business - accounts receivable, inventory, fixed assets, and in some cases real estate. One key issue that you want to determine early on is the issue of ' concentration ‘... for example if a huge part of the business volume is coming from one or two customers. This ' concentration ' issue alone can sometimes make or break your financing on the deal.

Cash flow is the solution that will take you to the goal line if there are not enough assets to complete the financing. On the other hand if cash flow is light or poor the actual assets might be the one element that allows you to successfully complete a purchase.

At a time like this it's actually useful to have a short list of the key elements that a bank or finance firm will focus on when it comes to approving your transaction - In ' old school ' terms they will be character and management depth, cash flow, collateral, current financial condition, and growth plans.

If you can't, or choose not to finance the business purchase through a bank numerous other solutions are available. They include :

temporary bridge loans

An asset based loan or non-bank credit line

unsecured cash flow loans

receivable and inventory financing

Never forget you have the option to go ' ' conventional' or ‘alternative’.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with the right type of loan when you buy a firm and are seeking business purchase financing.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS PURCHASE FINANCING AND LOAN 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 10 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-purchase-financing-buy-loan.html





7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com













Stan Prokop