OVERVIEW – Information on business loans an alternative financing solutions in Canada . Solving the quest for capital and needs for Canadian business owners from start up to high growth
Business loans and capital funding
for Canadian business is often ' top of mind ' for owners/financial managers in the SME sector. But what are the differences in types of loans, and, even more importantly, is a loan really the solution to your financing need. Let's dig in.
Borrowing for that ' loan always conjures up Canadian chartered banks as a possible solution to your financing needs. Business people tend, for some reason, to view the bank as their ' supermarket ' for financial needs .However banks are very reluctant to finance start up or newer businesses without collateral. Remember also that when it comes to equipment and other asset needs (i.e. technology, etc) equipment lease financing is a very solid alternative. No or minimal down payments and favorable amortizations make leasing the chosen provider for almost 80% of all businesses in North America.
Let's get back to that 'start up ' or early stage company need. One area the banks do come through on is the Government Small business guaranteed loan, which has Ottawa guaranteeing a large portion of your loan to Canadian banks who participate in the program. Each year billions are funded via this loan.
For businesses that invest in R&D thousands of firms take advantage of the SR&ED refundable tax credit program. Your SR&ED credit can also be monetized in the form of a bridge loan, eliminating the waiting period for your refund.
Another reason for popularity of this program is that it only finances two asset categories - equipment and leaseholds. Typically leasehold improvements are very hard to finance, ergo the popularity of the Small business loan. Although Cdn business tends to associate ' government ' with red tap and delay there is NO direct contact with the govt - its all done via your bank.
Many businesses are profitable, growing, and sometimes a combo of both. While owners/financial managers associate finance needs with a ' loan ' in reality they should be looking for a business line of credit that satisfies working capital and daily cash flow needs. It's important to know the difference between loans and asset monetization!
Alternative or ‘non bank’ lenders offer multiple solutions for ' loan ' needs. These financings include bridge loans, tax credit loans, and asset based business credit lines that work just like a bank facility - in fact they almost always are more generous when it comes to borrowing power. They also move... quickly! Additionally non bank and alternative lenders are open to taking on more risk, which of course means a higher cost of borrowing.
Looking to waste some time? You then must be one of those business owners /mgrs who focus on equity or venture capital. The hard reality is this type of financing is probably only suitable for a couple thousand businesses in Canada, if that , among the millions of small and medium sized businesses. However, if you're able to demonstrate hyper growth and unique products and services an equity investment is possible, although it’s important to remember debt in the form of loans is always cheaper than giving up ownership in your business.
Companies that have strong sales and purchase orders or contracts can also take advantage of PO Financing or Sales Royalty finance solutions. These monetize sales, and when you've generated receivables these can also be financed without the necessity of taking on debt via a ' loan '.
If you're looking to get properly ' caught up ' with business loans and the different types of capital and funding available to your business seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can help you take that one of your ' TO DO ' list!
7 Park Avenue Financial :
http://www.7parkavenuefinancial.com
7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS LOAN FINANCING EXPERTISE
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 '
ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.
Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.
Stan Prokop
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