Business Start Up Financing . Basic Rules For Startup Loan Funding

Cracking The Start Up Financing Code In Canada




OVERVIEW – .Information on business start up financing in Canada. How does the entrepreneur achieve the loan funding he or she needs for a new or early stage business



Business start up financing in Canada . Whether it's traditional, alternative, or just plain creative Canadian entrepreneurs want to know some of those ' basic rules' for ' cracking the code' to finance success. Let's explore some of those methods - and by the way some of these solutions can also help you grow an existing company.

It's no secret that that many business owners feel the door has closed on their chances of getting all the financing they need. Is that necessarily the case? It certainly doesn't have to be when it comes to a number of funding sources that allow you to access real world funding when you know what’s available and who to work with.

Canadian banks widely tout their offerings and expertise in business financing. However where the rubber hits the road is when the entrepreneur slowly realizes the capital he or she needs is harder to get and feeling scarcer all the time.

Business owners can of course dip into personal savings and assets to fund their business. This is typically done by tapping into home equity and registered savings plans. That is certainly not optimal, and always against our own preaching to clients relative to separating your business life from your personal finances.

The hard reality of startup funding is also that quite often not one single source of funding will get you all the loan financing you need. It might in fact come from a variety of sources, when, cobbled together, allow you to reach start up nirvana.

That brings up the point of proceeding with your business venture when in fact you don’t have the necessary funds you need. It can certainly be a double edged sword when you are unable to execute on your promised business plan, or vision.

We're primarily talking about debt financing here - equity financing on the other hand might be available from angel investors, friends and family, even that rare breed, the venture capitalist. If there are some basic rules for start up financing they often are somewhat non financial in nature - it’s simply maintaining our patience, flexibility, and the ability to downsize some of those earlier lofty goals.

A fundamental resource for start up success in Canada is in fact the bank, but it’s not what you think. We're talking about the government small business loan, aka the ' SBL ‘. While many SBL applicants may not become some of the largest corporations in Canada they can finance and grow a successful, profitable business in the SME (small to medium enterprise) sector in Canada.

The SBL loan has a lot of appeal to the start up. It includes very attractive rates commensurate with start up credit quality (let’s be honest - that's minimal!), long amortizations, no repayment penalties, and, can you believe it, a personal guarantee that is limited!

You can in fact approach a bank for a traditional (non SBL) bank loan, but be prepared with a solid business plan, demonstrable strong personal credit and collateral, and copies of purchase orders or contracts that make sense to a Canadian chartered bank.

Many entrepreneurs finance some or all of their start up with credit cards, both business and personal. While rates can in fact be attractive a real danger exists when problems arise and a personal credit crisis ensues, often taking years to correct.

There are some creative ways to finance startups - they include royalty agreements, or loans from strategic suppliers. In general suppliers are a valuable part of your start up loan consideration, as their capital via terms they extend is in fact real cash flow. Even SR&ED tax credits can be financed for real cash flow, allowing you to recover early stage R&D expenses.

Other more creative situations include business incubators, and even the new kid on the block - crowd funding.

So, can you crack the code on start up financing? Numerous realistic and viable options are available, as we have shown. Some work great, some work well in connection with others. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your loan and funding needs for any new or early stage venture.



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 :



7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS START UP FINANCING




CONTACT:
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