Solutions For Optimal Financing Of Capital Structure In Canada

Substitute Failure For Success In Canadian Business Financing

OVERVIEW – Information on implementing financing solutions for optimal capital structure in Canada .



Financing your capital structure might sound like a bit of an esoteric or technical term for many Canadian business owners and financial managers - in actuality its easier to understand than you might think, and .. Important!

The general idea of capital structure is for the business owner/manager to have a strong sense of whether money is coming from, or could come from your suppliers, your bank and other lenders, or your own owner equity in the company. It's those three that comprise your capital structure!

The manner in which you finance your capital structure makes you successful, or drives you into bankruptcy.

We prefer the former by the way!

In some ways you might be managing your capital structure quite uniquely and successfully already. Case in point - supplier terms. Just getting a supplier to allow you to pay anywhere from 60-120 days brings you a solid source of cash at minimal cost. Hopefully the ultimate cost isn’t the relationship you have with your suppliers of course!

Canada's chartered banks, asset based lenders, lessors, or working capital firms such as receivable finance and PO based finance firms are your short and long term lenders for capital structure as it pertains to debt. And that debt of course is short term, or long term, depending on the nature of the borrowing.

Another point to be made is that the debt you undertaking within your capital structure has collateral attached to it -and there's only so much collateral to go around. A positive aspect of debt is that you can leverage it to maximize returns on capital and investment - if done properly. A great rule of them is that your long term debt is not greater than your shareholder equity. And when it comes to total debt a typical bank requirement is that it should exceed equity by no more than 2 or three to 1. Otherwise debt becomes a burden .

If you are looking to purchase a business for example its important to understand that financing will come from a combination of lenders, your firm or you personally, and potentially the seller - aka the Vendor Take Back.

In talking to a bank about financing your capital structure they are going to focus on cash flow stability. Banks and other lenders use a simple cash flow analysis tool called ' coverage ' and they like to see cash flow exceed debt coverage by 1.25:1 typically.

Lenders, i.e. banks and other commercial finance firms will at the same time look to the balance sheet for collateral - which typically is going to come from receivables, inventory and fixed assets and even real estate.

Getting a handle on today’s subject will help guarantee business success. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with financing solutions within your capital structure.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS FINANCING SOLUTIONS


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/capital-structure-financing-solutions-optimal.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