Top Methods For Financing Your Company In Canada - No Plan And No Objective Equals No Results
OVERVIEW – Information on business financial strategies for funding the Canadian business . Knowing what type of finance solutions works when is key to operating and growth success
Business financial strategies in Canada.When it comes to funding and achieving lending success for your business it’s always important to understand the pros and cons of various financial solutions that will work for your company.
Some of those methods will work, some won’t... and if you don't have a game plan
we can assure you your chances of wasting time, and failing are... well lets say .. excellent! But spending management business time and not achieving your financing goals isn’t our recommendation, so let's discuss the fixes.A large part of the fix is understanding the need and having a plan. No secret there. The need is often very clear - your objectives might be to increase sales revenues, introduce new products, become technologically more competitive, etc
It's also critical to understand your current financial strength. Knowing how well your business is operating is key, and there are many basic analysis tools you can use to get a sense of:
1. How well your business is doing from an operational financial perspective
2. How bank and the many other commercial lenders will perceive your firm from a funding perspective.
Is there in fact a plan and process that allows you to successfully achieve external financing? We think there is and that process revolves around some key planning basics:
Ensuring you have a solid package of information that your proposed lender will need - those key basics includes interim financials, year end financials, a cash flow forecast , and a management and company bio . And if you don't have the time or expertise to put that together (a good package of info is a winning package) then there is a lot of expertise via your accountant or an experienced business financing advisor who can assist.
In some cases the winning business financial strategies revolve around cobbling together a number of financing sources - in many cases there is no one ' catch all ' that will solve different types of financing needs. Oh and by the way, a lot of the financing you think you might need in fact isn’t not required if you are turning over your assets properly (inventory, receivables, etc), allowing you to turn paper profits on your income statement into cash flow on your balance sheet.
Corporate finance text books talk about ' capital structure '. That's simply getting a handle on balance your debt and owner equity in a manner that reduces taxes but still allows you to fund your company daily and grow. Simply said, but hard to achieve! But truth be told your ability to find the right amount of debt to balance against the high cost of giving up equity ownership is a winning final strategy and should be your goal.
Business financial strategies for your funding needs will always revolve around what stage of life your company is in, i.e. start up, high growth, mature, turnaround, etc.
Some of those lending solutions:
Receivable financing / invoice discounting
Inventory and PO finance
Sale leasebacks of owned assets
Equipment financing via capital or operating leases
Bank lines of credit & Non bank asset based lines of credit
Working capital term loans - secured/unsecured
Other less well known solutions includes:
Confidential invoice financing
Tax credit monetization - SRED, etc
Royalty financing
Government SBL loans
Securitization
Mezzanine finance
Knowing which finance solution works for your firm is part of the ' no plan, no objective = no results' we have talked about. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can ensure that business lending is a success for your funding needs.
7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS FINANCING EXPERTISE
Stan Prokop
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