Business Finance Options In Canada . How To Assess Commercial Loan And Financing Alternatives In Canada

Making These Mistakes When It Comes To Financing Alternatives?

OVERVIEW – Information on business finance options . What commercial loans or asset monetization strategies work, or don’t work in Canada



Business finance options in Canada. How does the Canadian business owner and financial manger assess commercial loans and other needs for growth and survival? What are the alternatives when it comes to business financing? Let's dig in.

More often than not it always comes down to those two words ' cash flow'. While everyone accepts the importance of that term sometimes it's difficult for the owner/manager to assess the importance as they are wrestling with growing revenues or profit issues.


So how does the business owner ensure that the right type of financing is in place? While traditional bank commercial loans are often perceived as the ' go to ‘in reality all types of business financing, both traditional and alternative can address your needs. Oh and by the way, you don't need to take on more debt all the time, sometimes it’s a case of managing or monetizing your existing assets.

Simple better asset turnover in accounts such as inventory and receivables significantly enhance cash flow. And just using the right financing for the right need makes your firm a better cash flow and working capital manager.

Take the replenishment of assets such as equipment as an example. Using lease financing as an options can provide a multitude of positives around replacing assets to enhance your operations and competitiveness. Using effective lease strategies to their maximum allows you to grow your business. Some of those very basic tools include the effective use of operating leases, matching the term of the lease to cash flows and useful life expectancy of the asset, etc.

While the ' go to' for asset acquisition in Canada is leasing almost 80% of the time as experts tell us, business owners in the SME sector can also acquire equipment via the Government small business loan . It offers big guy corporate benefits to the little guy, and that’s a rare thing in the Canadian business landscape. For example, under this program terms of 5-7 years are available, personal guarantees are limited to 25%, and there is no charge to repay the loan early. Sometimes even the big guys can't negotiate that one!

Many business owners in the Canadian business landscape, certainly in the SME (small to medium enterprise) sector are unfortunately not known for their planning skills. As a result they are not always proactive in addressing financing needs until a crisis. Other challenges they have include the inability to understand what options are in fact available - therefore they spend hours, days, weeks and months chasing financing options that are never meant to be.

Many business owners, again we're talking about the SME sector often do a poor job of separating their personal financial life from their business life. Issues such as business credit cards or using home equity lines to finance their business can backfire in a big way. We encourage owners, whenever possible, to separate business and personal finances. After all, isn’t that one of the main reasons you incorporated anyway?

Business finance options in Canada include:

Receivable financing
Inventory Finance
Supply Chain/ PO financing
Working Capital term loans
Unsecured cash flow loans
Canadian chartered bank term loans and operating lines of Credit
Equipment financing/bridge loans
SR&ED Tax credit financing
Specialized franchise loans


Which one or what combinations of these are right for your firm? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist your in assessing alternatives that make sense for your business.




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.
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Stan Prokop