Business Finance Solutions In Canada : Cash Flow Financing for Working Capital Is Not Pay What You Want : Here's Why!

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The Magic Number ? What is the Right Amount of Capital For Your Business?

Information on cash flow financing solutions in Canada. Business finance success depends on the right amount of working capital to run and grow your business - here's your why and how !

Business Finance Challenges ? Every business, new or existing, is continually attempting to determine what the right mix of ' capital ' is for that particular business. New business owners, unfortunately, are often misguided by literature around ' low down payments ', or low owner equity injection.

The whole premise around the business dream is quite often pitched as putting the minimum amount down, or into the company, and thereby reaping large rewards on asset and profit appreciation in the firm. The arithmetic is appealing - the less you put in the greater will be your per centage appreciation or return on investment. Let's dig in!

Business owners either invest their own funds, or borrow from banks and other related finance firms. New business owners have additional challenges as traditionally the banks have not stepped up to the table to fund the small business environment. They of course prefer external collateral, which in most cases is unavailable, or based around the owners reluctance to pledge personal assets for a business venture.

So the crux of the matter is simple - how much to borrow, how much to put in or invest. Whats the right mix? Commonly this is known as the ' debt' or ' equity ' conundrum.

Bankers and financial personnel have addressed this business owner challenge in a number of ways. One common way is to simply compare the relationship, or ' ratio ' of debt to equity in any firm, either new or existing. If a firm has higher debt levels they are termed highly ' leveraged. Each business owner or corporation eventually determines the right mix of debt or equity. There are always extremes of course. Many large, successful, and well known corporations carry large amounts of debt but are still of course profitable and growing. Interest payments are tax deductible. On the other hand firms with little or no debt simply divide the profits up among the owners of the firm, as debt payments in their case are either non existent or nominal.

What is the right mix of total capital for the business. The answer is simply as follows: there is no right answer. Two companies or business owners can have completely different outlooks and philosophies of how to achieve the final company goals in revenues and profits. Since future results are never known it is incumbent on the business owner or their financial advisor to perform some level of proper analysis around the right ' operating leverage '., i.e. our main focus in this article: ' What is the right amount of equity and debt for my firm?'

No perfect calculation or debt to equity ratio exists. And lets be realistic, even a firm with no debt can fail if it loses market share or is in a failing industry.

There are however 4 ratios, we have called them ' relationships' calculating optimal leverage regarding debt and equity. They are as follows:

Debt/equity

Debt/total assets

Long term debt/total assets

Current assets/Current liabilities

By using the current actual numbers, and projecting what these ratios might look like in great, good, or bad times will assist any owner or financial manager in determine what the optimal relationship for debt and equity is in their firm.

In summary, any new, existing, or even public firm must continually weight the right amount of debt and equity in the company. More equity means less profits to be shared by more owners; more debt means that future alternatives have limitations and the firm can make less mistakes given its debt load. Careful analysis of the right mix of equity and debt capital is a must for all companies of any size. 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 the right business financing solution.



Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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

Equipment Financing In Canada : Your Hot Tip On Leasing Assets & Winning Lease Finance Strategies

We’ve Hacked Into The Equipment Financing Tips & Strategies Database ! Take A Look

OVERVIEW - Information on equipment financing in Canada. Leasing strategies are explored and tips are provided on lease finance and asset acquisition solutions for Canadian business owners

Equipment Financing Problems? Canadian business owners and financial managers continue to view lease equipment financing as a solid alternative for equipment and asset acquisition in Canada. Let’s dig in.


Leasing and equipment financing have been key to Canadian business for well over 60 years, if not longer. It is simply the method of acquiring assets and paying for those assets over a period of time – A current popular ‘buzzword’ on leasing is ‘profiting through use of equipment ‘. As a general rule most business owners would like to use assets, not necessarily own them. That brings us to one last buzzword, which is ‘if it appreciates buy it, if it depreciates, lease it! Let’s dig in.


When we meet with business owners they often ask us for strategies and ‘how to ‘with respect to financing their assets. If the vendor or manufacturer you are working with does NOT offer financing then your job is to simply focus on obtaining the best price and delivery date for the asset you are acquiring.


We referenced above the manufacturer not offering financing - We categorically encourage any company to take advantage of vendor financing or manufacturer financing that is available, if it is available! Why is that? Manufacturers and vendors either set up captive finance companies, or work with others to implement financing of their products for some very specific reasons. Primarily the reason is that companies do not wish to lose sales and profits by not offering a financing option.


Also, when you lease through a manufacturer you are in effect under their control for a number of years with respect to their ability to offer service, upgrades, maintenance, etc. So the bottom line is that if you can take advantage of manufacturer financing, you should!


One of the only reasons you might not be able to take advantage of manufacturer financing is that your firm does not meet the financial and credit criteria of the vendor. In that case you simply need to work with a trusted, credible and experienced leasing advisor who can source the appropriate financing for the asset with a rate, term and structure that approximates your credit quality. In general we advise customers that when a vendor or manufacturer has a financing offering the credit criteria to qualify in general is quite high.


Because leasing in Canada has the potential to be viewed as complex we try and approach working with customer in a very consultative manner.
Why can Leasing in Canada be viewed as Complex? We are of the opinion that if a lease transaction is a good transaction it creates a win win environment for both your firm and the lease company. To do that various aspects of business need to be tabled - those aspects are:

Taxes

Accounting

Credit

Rate/Term/ and Structure of the lease itself

When your firm has properly addressed all of these issues at least in a very basic manner your business will have created a proper lease transaction. When all of the above issues are addressed then your firm is in a position to benefit from a lease financing scenario. The benefits of leasing are generally well known – they are:

Flexible and lower monthly payments -in cases where you utilize an operating lease these payments would be significantly lower than a term loan

Ability to upgrade and return equipment

Maintenance and service are many times included in a lease financing

Little or no cash down payment

Discussing these issues with out customers usually brings out the clear fact that not all the benefits of leasing in general apply to every firm. Quite frankly some are more important than others to each Canadian business.

In summary, when contemplating Canadian Equipment Financing work with atrusted, credible and experienced Canadian business Financing Advisor with a track record of success
.

Determine what your financing needs are and focus in on which benefits you need to maximize to make your financing work to optimal advantage . And then, as we said, you will ‘Profit through use, not ownership’!




Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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

Securitization & Other Cash Flow & Business Financing Solutions In Canada

Here's the Good Stuff On Securitization & Other Cash Flow Solutions

Information on securitization as a cash flow financing tool in Canada . Business finance solutions can come in non traditional formats that still provide solid working capital needs for Canadian corporations

Business financing in Canada comes in many forms . Securitzation is a financing term that is not commonly used by the average finance person, let alone the average lay person who has no detailed knowledge of business financing and alternative financing. The term ' securitization' became increasingly well known during the financial and liquidity crisis that the world experienced in 2008/2009. We discovered that one of the main causes of the world wide financial collapse was, in effect, the securitization and marketing and sale of mortgages.

Securitization is an alternate form of funding for corporations. When it works well it is an excellent source of funding for many organizations. Securitization is a form of structured finance.

How does it work? A company or organization takes certain assets that are desired by various investors. These assets are most typically receivables, contracts, car loans, credit cards, mortgages, etc. The quality of these assets is key in the entire securization process. We watched the financial world fall apart when people discovered those securitized mortgages that were bundled in the United States had a very low credit quality.

One of the reasons investors like securitized assets is that the risk is spread among hundreds, probably thousands of different borrowers. This diversifies risk. We continually here how one needs to diversify to control risk, whether in business or in our personal financial affairs. The cash flows that come out of that pool of assets backs up the quality of the investment by the buyer of the securitized asset.

For a transaction to be properly securitized there has to be a strong level of predictability in the repayment of the loans, leases, mortgages, etc.

How are Securitizations structured? The assets become known as a' pool 'of assets. Financial analysts or the credit rating agencies ( Standard & Poors, etc ) assign a credit rating to this newly created SPV. ( Special Purpose Vehicle ). Investors buy this pool of assets because they theoretically understand the asset quality and the risk. There are many subsets to the risk which we wont cover in our article - for example concentrations of assets or customers, etc

The pool of assets is usually ' serviced ' by the seller. He collects and maintains the portfolio - of course it has he who also created the portfolio of assets. The ongoing collection of the portfolio flows back to the investors who purchased it.

Securitization has become more and more popular because it has provided great liquidity to the financial markets.

In summary, the securitization flow chart is as follows:

A seller creates the assets
A SPV is formed around those assets
Investors purchase the SPV
A trustee monitors the flow of cash, collections, etc.

Of course as one can imagine all sorts of lawyers, accountants and financial analysts have a healthy hand in various aspects of the above process flow!

The benefits of securitization can be summed up as follows:

* It provides cash flow to many companies who would otherwise have to wait years for customer payments, etc
* Profits from the sale of the pool of assets allow a company to grow and create more assets
* When properly structured there are certain balance sheet enhancements - i.e. the company selling the pool gets cash but does not take on debt.

If you're focused on alternative forms of business financing including :

A/R Financing

Non bank asset based lines of credit

SR&ED Tax Credit Financing

Unsecured Cash flow loans

Royalty Finance

Bridge Loans

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 innovative cash flow solutions that work for your firm.




Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :


http://www.7parkavenuefinancial.com


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

Working Capital Financing In Canada : Which Cash Flow Loan Or A/R Factoring Solutions Works For Your Business?

Looking for a Laser Like Cash Flow Financing Solution?

OVERVIEW – Information on working capital financing in Canada. Whether it’s a factoring cash flow loan or other finance solution numerous options exist for the business owner/mgr

Factoring / Canada – these two words , relatively speaking , are new to each other. What is behind the sudden increase in popularity and usage of this age old financing concept which has been in place for hundreds of years around the world? Let’s get laser focused

First of all, it’s simply a new choice for Canadian business owners and financial managers – they either have been financing their receivables with their bank, or in many cases, have been unable, for a variety of reasons, to negotiate such a facility. The challenge for business financing in Canada is even more difficult based on a company’s smaller size coupled with the current challenging business environment of 2010.

Factoring in Canada, if you have the proper facility put in place, allows you to provide your firm with virtually unlimited cash flow based on your ability to generate valid receivables as you grow your business . For small and medium sized businesses this is absolutely critical – they didn’t coin the term ‘cash is king’ for nothing!

While the concept and general practice of factoring in Canada seems simple once the business owner learns about it we feel the greater challenge is simply to determine what the best factoring solution is for your firm. That is where an experienced, trusted, and credible financial advisor might be of great assistance. Factoring, if entered into in an improper fashion, can be very paper intensive, and also have significant ramifications on how you run your business, and how your business is perceived by others – by others we mean bankers, suppliers, and yes, even internal staff.

As you contemplate a Canada factoring solution it is necessary for you to ensure you have , at a minimum, covered off the basics - A good starter is simply ‘ Does my firm qualify for such a financing facility?’

Your firm clearly should be labour or product focused – very capital intensive industries sometimes are not the best candidate for a factoring facility in Canada.

While no one wants to finance a firm that is in somewhat of a ‘death spiral ‘the exact opposite of that often makes the firm a very solid factoring prospect – that is to say you are growing too quickly, with annual growth perhaps much more than the traditional 10% or so that we see in stable commodity oriented industries in Canada. High growth and factoring make the perfect marriage. Why is that? Simply because growing sales, if managed well, mean growing profits, and traditional financing strategies such as bank lines or working capital term loans are not a good fit for explosive growth firms. With explosive growth you get all the cash flow you need from factoring.

Many industries that are cash flow and labour intensive, a solid example would be freight companies or staffing / placement agencies require cash flow frequently through the month. A properly set up factor facility will allow your firm to generate cash flow from your receivables whenever you need it.

In a lot of firms there as seasonal issues, big contracts, and generally what’s known as ‘bulges ‘in normal requirements. Factoring solutions fit these sorts of bulge needs perfectly.

We meet with business owners that come to us that are start ups or relatively new – they are not aware they are often great candidates for factor financing (also sometimes called invoice discounting) but they clearly have discovered they are not candidates for traditional bank type financing that requires solid balance sheets, historical cash flow, and good operating ratios that typically the institutions such as the Canadian banks look for.

You also are a perfect candidate for Factoring in Canada if you have receivables from large slow paying customers. These larger firms might be good profitable customers for your business based on just the issue of sales volume, but they clearly tie up your working capital when your firm is not paid in 60, or sometimes even 90 days.

In summary:

Factoring is relatively new in popularity in Canada, it is gaining traction quickly. Careful analysis should be spent of whether your firm qualifies for such a facility – it has to work for you and the lender. If in doubt, and many are , because anything new can be perceived as complicated , enlist the services of a trusted, credible and experienced Canadian business Financing Advisor with a track record of success in this area of Canadian cash flow financing !
P.S. Numerous other cash flow financing solutions may also work for your firm – These include :


Asset based credit lines

SR&ED bridge loans

Unsecured cash flow loans

Sale Leasebacks

PO Financing

Royalty Finance




Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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

Business Financing Solutions & Bank Loans In Canada : Solving The Term Loan Challenge

Everything You Wanted To Know About Bank Term Loans and Alternative Financing Solutions

OVERVIEW – Information on the term loan process in Canada. Here’s what you need to know on achieving success with business financing solutions that include bank loans and other working capital and cash flow alternatives

Business Loan expertise ? Most business owners and financial managers know the story - the bank has the money, you need it. Term loans can be a tough negotiation for any business owner. Part of that is simply because the final conditions imposed upon the bank can be somewhat restrictive.

As simple as it may seem, the business owner has to think like the banker - that allows one to reverse the negotiation stance to some degree. Also, it's all about 'strategy'.


We would point out also at the outset that there are a number of banks, and an equally larger number of independent finance firms that offer term loans. The business owner should ensure he is aware of the market players, and who offers what. The goal tends to always be the same though - get the largest loan at the best rate. Not easy to achieve!


Business people as we have said, should have a solid strategy in the entire process, and believe me it's a process.

Borrowers can benefit by doing research into the banks current market and objectives in commercial finance. There will be issues and objections raised by the bank on the owners submission - they should be dealt with in a manner that keeps the loan submission positive in nature. Thousands of books are written on the art of negotiation, and no business owner can expect to reasonably get the full amount with all terms that he or she asked for.


Term loans are generally for long term assets. They are paid by future cash flows and earnings. That bring two bear two key source of information that should be properly prepared - what has the business done financially, and what has it he potential to achieve - i.e. a forecast.


Banks focus on cash flow - so they will want to carefully look at what the risk is to those future cash flows. Business people should be prepared to talk thoroughly about their own particular industry, many industries are currently out of favor - example: automotive; many are sought and in favor: 'Green' industries - (solar, et al).


The owner should anticipate what risks the bank or other lender will perceive in their industry - they should be prepared to talk to those risks. Owners should also remember that although they need this term loan now for this asset, that the bank will also want to look into what else they might need in the future, which might have the ability to restrict the cash flow somewhat.


Unfortunately more often than not the lender looks to historical cash flow to reflect future cash flow - therefore is a company has lots of changes in sales and profits over the years the why's and wherefores around these need to be discussed and presented.
While the focus is definitely on cash flow the balance sheet will definitely come under scrutiny. Weaknesses in the balance sheet need to be tabled and discussed.


Banks love 'ratios'. We have called them 'number relationships' .
It is highly recommended that the business owner review and understand some of those 'ratios 'which will come under scrutiny. Typically those are liquidity, operating, and fixed asset coverage ratios.


In summary, all banks and other finance firms have very similar and basic analysis models around term loans - they involve industry and financial statement analysis, focusing as much on the past and future as the present. It behooves business owners and financial managers to understand some of those metrics used by banker, which should, in the long run, limit loan restrictions and get the business owner the capital he or she needs.


By the way, although our conversational focus has been term loans it’s critical for business folks to understand numerous other cash flow, debt and working capital options are available to your business . Those options include:

A/R Financing

Inventory Loans

Asset based bridge loans

Non Bank asset based lines of credit

Unsecured cash flow loans

SR&ED Tax credit loan finance

Royalty Finance

PO Financing


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 term loan or cash flow needs.



Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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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

Financing Solutions For Franchise Financing In Canada : Solving The Franchising Loans Challenge !

Your Crash Course In Franchise Financing Loans In Canada

OVERVIEW – Information on business finance and franchise financing in Canada. Financing solutions via franchising loans have some key requirements

Franchise Financing in Canada
is a key part of the total solution that the entrepreneur needs to put in place when considering the purchase of a new franchise or an existing unit. How do you get approved for that financing and who offers these loans? Let’s dig in.

Proper franchise financing, coupled with a solid franchise opportunity helps the entrepreneur assure financial and personal goals will be attained.

When we meet with business owners to discuss their Canadian franchise financing needs they often reveal they have contemplated purchasing their own business for quite some time but that financing was an obstacle. We firmly believe that financing should not be an obstacle to success.

The hard reality of franchise financing is actually very simple - that is that if you have a reasonable personal investment into the business ( we'll discuss' reasonable' later ) , and a decent work and credit history that are some great options for franchise financing in Canada .

Many new entrepreneurs are industry or work focused, and they don’t consider themselves ' financial types '! That simply emphasizes the point that you should be working with a trusted, credible, and experienced franchise financing advisor who can both guide you through the best solution, and in fact get you the capital that you need . It should not be any mystery that a combination of a strong proposal and application geared towards the type of financing you need almost guarantees total success.

If you don’t have a business plan or financial projection for your business you must realize you absolutely need that document. 9 out of 10 of our customers don’t have that plan, or recognize the importance of it. In that case we work with the customer, and prepare the plan based on input from you on your projected revenues, profits, expenses, etc. In our experience a winning plan is geared towards financing and not marketing and advertising.

We do get a little concerned when many new budding entrepreneurs come to us with no industry experience in the business they wish to purchase or enter into. That generally speaking is viewed as a negative, it does not mean you wont are financed, it simply means it’s a negative point that has to be taken into consideration.

Our experience in franchise financing with Canadian entrepreneurs is that a careful well thought our business plan, cash flow forecast, business summary give you a 95% chance of financing success.

In Canada our firm uses a three pronged strategy to finance franchises - we utilize the CSBF program , working capital term loans, lease financing, and oh yes, the 4th piece of the puzzle - your own investment .

We had referenced previously that your personal investment must be reasonable, there is no absolute number that can be tabled here - simply that an owner equity investment of 10 to 30, perhaps more per cent investment usually carries the approval. We can’t over emphasize that each franchise financing differs with client needs re amount, structure, types of assets being financed, etc.

So, our final bottom line - Be prepared, consider seeking out and speaking to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success . Have credible info and demonstrate you know your business. Soon you will be on the way to franchising success!


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 - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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

Franchising Loan Solutions In Canada : Sourcing The Right Franchising Financing Lenders

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Franchising Loan Solution In Canada : Stalking Those Elusive Franchise Lenders

OVERVIEW – Information on sourcing franchising loan needs in Canada. Locating the right franchise financing lenders for your needs is a challenge you just might need some help with

Franchising loan needs of course involve franchise financing lenders. That search for the purchase of your business can seem very elusive to many entrepreneurs, particularly those that are new as franchisees.

How then do we find the right lender for our needs, and who in fact are those lenders. We supposed you could say we're stalking those funders that participate in franchise financing - but not in a creepy way of course! Let's dig in!

The majority of business owners would normally think that Canadian chartered banks probably offer their best chances of securing a franchise loan to purchase either a new or existing business. In some ways they could not me more wrong. If your bank does not have a formal ' program ' in place with your franchisor financing will be, shall we say... challenging! Banks prefer very established names that come with a brand and a lot of ' unit ' success in the market. (Think golden arches and rolling up cup rims)

Where the banks do play a key loan in franchise funding is via their partner in the transaction - the Canadian govt! That's via the Govt of Canada Guaranteed Small Business Loan program which makes the transaction less ' risky ' given that the govt guarantees the majority of the loan in case of default. That type of backing makes any loan ' low risk ' for sure!

One point of clarification: Your bank will of course consider financing your franchise choice outside the Govt Small Business loan program. (By the way, the new 1 Million dollar limit on this program isn’t exactly small) However that will require full disclosure by yourself of your personal finances, tax returns, sources of income/savings, etc.


While banks could provide the maximum amt of funding you need at absolutely the lowest cost it's safe to say that many franchisees would prefer to separate their business and personal finances when it comes to risk. Also if your bank is not willing to consider a pure franchise loan on its new merit it is often difficult to establish a new relationship within a short period of time based on your funding and timing needs.

Other sources for your franchising loan needs. They include a small handful of specialized franchise lenders who again also focus on programs they have in place with major franchising chains. These loans can be complemented by financing for various other lenders including leasing companies, working capital providers, etc.

Not sure you want to be a ' stalker' when it comes to tracking down franchise financing lenders? One alternative is to 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 originating the best funding to start or continue your entrepreneur journey.


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 - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com




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