Acquisition Loan Challenges Solved : Leverage Finance Loans Are Time Tested

Top Methods To Acquire A Business In Canada Via Financing Options That Work

OVERVIEW – Information on acquisition loan financing in Canada. Purchasing a business can be effectively completed via a number of different solutions including leverage finance loans

Acquisition loan needs arise quickly when you or your firm has found the right business to purchase or merge with in Canada. Leverage finance loans and other financial solutions can provide the necessary capital to successfully conclude a business purchase. Let's dig in.

Naturally the stage or condition in which your targeted purchase is in varies -it might be a smaller firm doing well, or a larger firm experiencing severe business challenges, not the least of which might be cash flow or profit shortages.

Buying an existing business in any condition, large or small, comes with complications. At the heart of what you need to address are key issues such as:

Valuation

Negotiation

Employee/Culture issues

And finally... FINANCING!

The risks around completing a transaction incorrectly are of course significant - including of course financial loss. However the reasons to complete a business purchase successfully are compelling - they might include:

Enhancing personal income and net worth

Acquiring business assets at an attractive price

The ability to compete more effectively in your industry

The concept of leverage finance loans is a compelling one. Although the term might mean different things to different people we're talking here essentially about using the right type of financing and debt - in some cases more than might be typical to acquire a business. In some cases the debt you take on might be more costly than ' traditional' bank debt more commonly associated with buying a business.

The good news about alternative debt and higher than normal leverage is that often it allows you to complete a transaction and then after an interim period you can ' re-balance ' the balance sheet with other forms of financing, perhaps lower cost bank loans, etc.

In some cases the debt you might take on is ' mezzanine ' in nature - secured by ' assets ' or ' cash flow' with rates in the ' teens ' this appeals to smaller businesses that can't access bank or stock market capital.

Think of your proposed transaction as having ' layers ' of financing, but always ensure that your business plan and cash flow addresses the realistic ability to repay /service the debt. A good part of any cash flow will always be going to repay debt in an acquisition - so clarity is key here.

The exact nature of whom and what you are purchasing will dictate what type of financing is needed. It might be monetizing assets through asset based loan agreements , utilizing the Govt guaranteed business loan, or cash flowing assets such as receivables, inventories, tax credits, equipment refinancing /leasing, etc.

If you're looking to ' SOLVE ' acquisition loan needs with the right types of leverage finance loans or other financing vehicles which are ‘ time tested ‘ , while minimizing risk and maximizing opportunity consider seeking out and speaking to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with finance solutions, document issues, etc.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN ACQUISITION FINANCE AND LEVERAGE LOAN EXPERTISE






Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:
7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Franchise Financing Loans In Canada : Achieving Franchise Finance Success Depends On This

Looking To Be A High Achiever In Franchise Loan Success?

OVERVIEW – Information on acquiring franchise financing loans in Canada . Franchising finance is successful when the franchisee has mastered these critical issues

Franchise finance success in Canada - What business person /entrepreneur wouldn't want to be a ' high achiever ' in the one area that is critical to success - franchising financing. Let's dig in.

The good news in the franchise industry is that the few rougher years after the 2008 recession appear be quite well over - that has made it easier for potential franchisees of new and existing franchises to acquire the capital they need - if.. And it’s a big if... they know how to go about it.

The most common ' type ' of loan for a franchise is a ' term loan ‘. It's a fixed payment loan that is amortized over a period of usually 3-7 years. These loans are acquire and achieved through only a small handful of sources - a specialty franchise finance lender , ' the bank ' ( more about that later ) and a combination of commercial financing options that , when cobbled together put you on the path to loan success .

All these solutions might include one, or a combination of equipment and leasehold financing, working capital, credit lines, etc,

How you navigate the landscape of franchise lending (landscape in some cases might mean ' minefield ‘!)

will depend on your ultimate success in securing capital.

One key component of the franchise acquisition is the owner equity, aka ' down payment ' component. While there is no right amount that broadly qualifies all franchisees a typical range is between 25-50%.

KEY POINT - In some cases you only need to demonstrate you has access to capital, not necessarily provide it.

Your down payment, loan amount and ongoing finance needs are best set out in the financial portion of your business plan. This document should lay out in a clear manner the cost of the business, your loan amount, your on going incoming cash flows, your loan payments, and , most critical - the timing of your cash inflows . For example while many franchises in the hospitality business are ' cash businesses ‘ other franchises might be selling on credit terms - whereby they will only collect their invoice sales 30-60 days later .

In Canada there is a major government program that finances a huge amount of franchises. The program is called the CSBF program and finances loans up to 350k on very reasonable rates, terms and structures. The Canadian government guarantees a very large part of the loan to the participating bank.

If you want to be a ' high achiever ' in franchising finance success consider seeking out and aligning yourself with a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who will ensure the correct options relative to your situation will be explored.. And achieved... making you that ' high achiever ' in the explosive franchise industry that is such a big part of the Canadian economy.






Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :



7 PARK AVENUE FINANCIAL = CANADIAN FRANCHISE FINANCE EXPERTISE




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Factoring Receivables This Way Makes Your Firm Untouchable When It Comes To Cash Flow And Account Receivable Finance

And Now For My Next Trick .. Turning Receivables Into Instant Cash

OVERVIEW – Information on factoring receivables in Canada . Using specialized offerings in Receivable Finance provides cash flow and working capital supremacy for your business . Account Receivable Finance tricks of the trade







Factoring receivables in Canada is a method in which your sales are turned into automatic cash. The good news is that no magician is required. And one or two little known tricks of the trade will allow you to maximize the benefits of A/R finance. Let's dig in.

By the way, we're the first to admit, and educate clients on the fact there is no replacement for ongoing proper management and due diligence on the receivables you generate from sales. We're never more amazed when even clients with great customers of high quality neglect the ongoing importance of turning that AR investment into cash for operations and growth

And yes, there are other additional ways to generate cash - i.e. working capital term loans, refinancing of assets , bridge loans , monetizing any SR&ED tax credits etc ; but on an ongoing basis your investment in A/R is the next closest asset to cash on the balance sheet - enough said .

Why then is factoring receivables so popular. Part of the lure of this method of Canadian business financing lies in the fact that it's a simple process. Once your initial agreement is in place (with the ‘right’ commercial lender) you have the ability to raise capital in any amount commensurate with your sales growth. At the right cost, and using what we feel is the best way to utilize factoring (we’re talking about CONFIDENTIAL ACCOUNT RECEIVABLE FINANCE) you have just turned your company into a cash flow machine.

What then are the advantages of Confidential AR Financing? The largest benefit should be self explanatory - it's in the ' MIND YOUR OWN BUSINESS ' category, allowing you to finance your cash flow needs without your suppliers, clients etc knowing your financial strategy. 99% of receivable factoring in Canada requires that your clients be notified in this whole process. That is not the optimal strategy sought by the Canadian business owner and financial manager.

Utilizing Confidential Receivable financing is your method of a sales line of credit really; comparable to a bank facility but at a high cost. The trade off is that you have all the capital you need when you can't access it through traditional sources
Here's a good example of how the cost of this method of business financing works.

Let's use a $ 10,000 invoice as an example. When you are in a position to invoice your customer for services rendered or product delivered you would pay approx 200.00$ for a 30 day ' loan ' on that balance. If your customer pays in 60 days (unfortunately many do!) the finance charge becomes $400.00. Remember though that cash in your bank is now used to generate more sales, grow profits , and you can even reduce your financing costs by using part or all of those funds to take discounts with your own suppliers - who now suspect you're ' cash rich '!


If you’re looking to maximize the benefits of the ‘ right ‘ A/R finance solution seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your working capital needs.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN RECEIVABLE FINANCING EXPERTISE



Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Equipment Leasing Rates In Canada : Lease Costs And Your Next Interest Rate Just Got Better

The Complete Guide To Not Swearing About Equipment Lease Rates In Canada


OVERVIEW – Information on equipment leasing rates in Canada . Lease costs and the interest rate are dependent on a number of factors – Here’s what you need to know






Interest rate and equipment lease costs seem to be a major mystery to the Canadian business owner and financial manager. That doesn't have to be the case. That type of confusion has left some business people cursing about leasing cost!

Lease costs are dependent on a number of clear factors that seem to be not generally known when companies use asset leasing to acquire assets. If you want to take advantage of Canada's most popular method of acquiring business equipment you need to understand what's behind the pricing. Let's dig in

There are a number of factors in lease finance costs - as we've said too many owners/managers focus solely on the ' interest rate ' which is rarely the most important part of a lease, especially as the size of your assets grow in $ or numbers.

At the heart of any transaction is understanding the actual calculation of a lease rate. They are: term, financing rate, asset cost, monthly payment, end of term obligation. When you know any 4 of those you can pretty well calculate the missing piece of the puzzle. In fact most lease companies in Canada quote only monthly payment, not the interest rate. And to add to the confusion the way in which the rate is presented may not always be the same! (Next time you are quoted a lease rate ask the lessor if they have quoted you in ' advance' or ' arrears ‘)

We've advised in the past that the owner / manager has two choices in types of leases offered - the ' CAPITAL ' lease to own, or the ' OPERATING' lease to use . Because operating leases are in fact rentals many business owners may be surprised to know that the actual rate calculated may be negative - i.e. below 0! That's because the lessor is betting you will return the asset and they can resell or refinance it again.

The term of the lease will of course drastically affect the monthly payment - being approved for a longer term (amortization) will in fact lower the monthly payment - that longer term of course increases the finance profit for the leasing company.

Credit quality drives the majority of lease costs rates in Canada. Rates are very competitive if you are dealing with lessors that directly compete with each other. Financing approval is often as important as the ‘rate ' to many clients we meet and work with.

We mentioned that interest rates aren't the be all and end all in asset financing. That's because lease documentation, financial statement impact and tax impacts are a key part of a true lease financing deal.

Understanding the terms and conditions in your equipment lease transaction is also critical - end of term obligations, maintenance issues, and other ' nuances ' affect your ultimate cost to finance.

If there is one way to step delicately through the lease costs minefield in Canada its to seek the services of a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assure you that your next lease finance transaction will just get better.



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


http://www.7parkavenuefinancial.com/equipment-leasing-rates-lease-cost-interest-rate.html






Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com





















' Canadian Business Financing With The Intelligent Use Of Experience '





























Stan Prokop

Startup Loans : Don’t Read This If You Don’t Want To Know How The Canada Government Business Loan Works

Confused About Govt Business Loans ? You Shouldn’t Be

OVERVIEW – Information on startup loans in Canada. Start Up financing via the government business loan provides key financing to make your venture successful

Startup loans in Canada bring one of the largest challenges any entrepreneur/business person will face. That challenge in many cases can be complete eliminated via the Government Business Loan - often called the ' SBL ‘. Yet confusion many times still reigns supreme when it comes to this program, how it works, how to access it, and... Oh yes, how to be successful.

As we have hinted, SBL loans allow you to get within reach of the initial financing you need fro any business start up. A startup can take many forms - starting from scratch, buying or acquiring a franchise, even buying an existing business and ' starting over ' (sometimes called a ' restart '). In other cases other financing can already exist that you have arranged and the govt business loan simply supplements that.

Many of the challenges you face on financing are preceded by other issues you have already faced prior to financing ; for example selecting a business location, negotiating a premises lease, doing your due diligence and research on your transaction , etc.

Putting the right finance solution in place for your venture means two things, arranging initial financing and ensuring and allowing you will have some working capital and cash flow for your ongoing operations and growth .

One of the main misconceptions of govt business loans in Canada is that they in fact can provide working capital and cash flow. They can't!! The program is specifically formulated to address only 3 asset categories -

Equipment

Leaseholds

Real estate

In the case of purchasing an existing business or franchise an appraisal of existing assets and leaseholds provides the basis of collateral for your new SBL startup loan.

In business you don't necessarily get all the chances you need to be successful, so government loans provide a solid base on which to start, operate and grow your company or franchise.

We've been somewhat amused for years because clients always want to discuss or focus on ' interest rate ' on any new financing they are seeking for start ups. While a rate must be competitive and allow you to of course pay the loan the reality is that start up financing outside the govt loans is difficult , if not outright possible to achieve . Yet the SBL program provides a very competitive rate (3% over prime) and even allows you to repay without penalty. Even traditional financing won't allow you to do that.

SBL loans work fundamentally because they are government guaranteed. Canadian chartered banks which offer and specialize in the loan like the program because the majority of the loan is guaranteed by the Canadian government. Almost 8000 businesses annually take advantage of the program.

If you are looking to turn dreams into reality for your Start up seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with this and other finance solutions.





Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN GOVERNMENT BUSINESS LOANS AND STARTUP FINANCING EXPERTISE





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

ABL Asset Based Facilities Reinvent The Credit Line : Get In Charge Of Your Business Credit Line

What Are The Real Benefits Of A Non Bank Business Line Of Credit ?



OVERVIEW – Information on the business credit line option in Canada. ABL asset based facilities offer key benefits not typically available in revolving bank lines.. here’s why and how

Business credit line needs can often fully be satisfied through an ' ABL ' asset based credit facilities. They are ' non traditional ' in nature only because the sole ' traditional ' solutions is Canadian chartered bank facilities. Yet they deliver on everything you need and more often than not... more. Let's dig n.

When the Canadian business owner / financial manager thinks of revolving credit facilities they rarely think ' outside the box ' so they are quite surprised to find out from us that all business assets can be combined into one total borrowing facility that revolves based on day to day business needs, seasonality, ' bulges ' in sales growth and cash flow requirements. Hence the name ' Asset Based Line of Credit '.

They two issues that immediately need to be table when it comes to focusing on a business credit requirement are ' facility size ' and the cost. We can clarify and explain the cost issue very quickly - ABL costs more 99% of the time; but the benefit is unlimited access to credit needs based on your sales. It's common knowledge that business borrowing costs today at the bank level are the lowest in recent history.

But ' cost' should never be the only factor when it comes to business borrowing - so when ABL offers all the capital you need to run /grow your company we're suggesting you listen.

Oh, and by the way, have we forgotten to mention that thousands of companies actually cannot qualify for either any, or all of the financing they need at certain critical times. That alone is a good reason to entertain Asset based lending facilities.

We are not presenting the ABL solution as the 'be all and end all ' method to finance your credit line needs, but it clearly is a logical alternative to traditional borrowing. The spectrum of users of ' ABL ' is very large, from start ups to the largest corporations in the world. Naturally it's those larger corporations that represent the small percentage of applicants that can actually achieve bank or better pricing.

To qualify for ABL your firm must be able to produce regular financials and report on the current assets in your business in a regular manner - typically monthly, on occasion even weekly. That typically is not as bad as you think - it’s just about providing regular reports on aged payables, receivables, and inventory lists. We suggest to clients that if you can’t provide those reports you're in bigger trouble than you think... if not today... tomorrow.

ABL business credit lines provide 90% financing on A/R, 30-70% finance of inventories, and even combines the value of your unencumbered fixed assets. At the end of the day that simply means anywhere from 50-100% more borrowing power on an ongoing basis. Remember also that this facility, unlike the typical bank line grows as your sales grow, and is not fixed, which typically is associated with a bank credit line.

If you're looking to feel ' in charge ' of your working capital and cash flow needs and want to explore the real benefits of ABL asset based credit lines seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success
who can assist you with your reinvention of credit solutions.





Stan Prokop - 7 Park Avenue Financial :
http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN ABL ASSET BASED CREDIT LINE EXPERTISE







Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Federal Government Loans In Canada : Different Rules : Different Objectives : Great Results From SBL Government Lenders

You Might Not Believe These 4 Uses For Government Small Business Loans In Canada

OVERVIEW – Information on federal government loans in Canada . SBL government lenders can help you achieve various business financing and acquisition goals – here’s how

Federal government loans in Canada are truly an ' all purpose ‘financing solution for various types of finance needs. The ' SBL ' (small business loan ') from government lenders have a number of great uses - we're going to cover off 4 of them. Let's dig in.

Different objectives in Canadian business financing more often than not requires different solutions - so that typically means different rules around what works, what doesnt and what's required. But uniquely to the SBL loan it has the ability to ' fix ' at least 4 different financing needs.

Let's recap those 4 uses of the program - They are:

Purchase an existing business

Start a business

Buy an existing or new franchise

Finance leasehold improvements to your premises


We've spoken of ' government lenders ' in the program. In reality there is just one government lender and that’s our Canadian banks. They are essentially the ‘delivery vehicle ' for your SBL financing needs. There's a little irony here in that the same loan you COULD NOT get from a Canadian chartered bank is suddenly ... AVAILABLE!

The simple reason for that is that the government, via INDUSTRY CANADA essentially guarantees the majority of the loan to our Canadian banks. In recent years that has meant that every type of business in Canada, in almost all industries has received billions of dollars of loans annually - recent stats are that about 8000 companies apply and are approved under the program.

At the end of the day it's simply an ' incentive ' for our banks to lend to the SME sector. One technical point is that if your firm has either over 5 Million dollars of actual or projected (in case of a start up) sales revenue you are disqualified for the program. Luckily that 5 Million $ threshold still covers tens of thousands of firms that can still access the loan. In fact govt stats tell us it’s these firms that are powering a huge part of the economy.

If you're serious about getting approved for the right amount and in a timely manner it's necessary to give the banker and the program what they want. The good news is that list is not that large.

Essential elements of a solid loan package include:

Business plan / cash flow
Owner bio
List of assets /items to be financed/acquired
Personal financial info on the owner (reasonable personal credit is a must)
A Premises lease identifying your business location


If you feel you're unable to access the right banker or put together a proper package consider seeking out and speaking to a trusted, credible and experienced Canadian business FinancingAdvisor with a track record of success who can fast track you to federal government loans success.



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN SBL GOVERNMENT LOAN EXPERTISE





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop