Tweet
Turning Business Financing Conspiracy Theories Into Real World Accessible Financing Solutions For Your Company
OVERVIEW – Information on business loans and company finance options in Canada. Funding via short term and intermediate term financing is key to business growth and success
Business loans and financing for their company must surely make some owners/financial mgrs feel like there is some sort of ' conspiracy theory' out there relative to their ability to access finance options and funding solutions successfully. Our point of view? That doesn't have to be the case, so... let's dig in.
Some business folks particularly start up and earlier stage companies (including franchises) should definitely check out the Canadian Govt Small Business Loan Program, which, by the way, has the federal govt guaranteeing the major part of your loan. The short term recap on this program:
Great rates
Nominal personal guarantees
Fluid structures and repayments re terms, etc
It's no secret that thousands of new and emerging private companies successfully access this program every year.
The downside to the Govt loan program is that many businesses are not seeking the asset or leasehold financing that the Govt ' SBL ' loan program provides. They're looking for cash flow and working capital sources!
Believe it or not working capital loans are actually available from what people consider traditional sources. One of the Crown Corporations within the Canadian government actually focuses very significantly on cash working capital loans. These loans are structured as term loans, have fairly competitive rates, and repayment terms of 5 to 6 years. They are also unsecured, which means they rank behind and senior lender or security you might have in place.
The only commitment to repay is the guarantee of the company as a promise to pay, and a full or partial guarantee by the owners personally. We point out that the majority of business loans and financing in Canada does in effect require some level of guarantees from the owner as well as a general positive personal financial history of the owner/ owners.
Understand your businesses overall cash and capital needs often comes to the root issue - the financing of receivables and inventory.
Those are the key drivers of any working capital need.
The ' holy grail ' of financing and funding your business? Growing your business, reducing inventories and turning them faster, and increasing receivable collections.
Increasing A/R either via more efficient methods of collection, of selling your receivables as you generate them ( that's called invoice discounting or factoring ) is the most optimal way to generate working capital financing .
Naturally the challenge in doing all that is to ensure you can still maintain your projected sales and profit growth!
If your company has a significant inventory investment at all times you can obtain direct loans in Canada against that inventory. Bank financing traditionally is the route many larger and established businesses take when they required working capital for inventory purchases. However when your firm can't qualify for the full extent of financing that you need then a direct inventory working capital loan is best.
Our recommended working capital loan is actually not a loan that adds additional debt to your balance sheet. It's a facility which margins your receivables and inventory to proper market valuations. This generates the additional cash flow and working capital you are looking for, and, as importantly, doesn't add debt to the balance sheet. For companies that can't access any or all of the operating cash they need these ' Asset based Non Bank Lines Of Credit ' are the golden solution!
The best way to generate your own working capital loan to your firm is to improve collections and delay payments to suppliers. The latter must be done carefully of course, so as not to mismanage vital supplier relationships. However, clearly it's every man and woman for themselves when it comes to business financing, so you should focus on negotiation the best payment terms you can with valued suppliers who will usually extend solid payment terms when they see you as a viable and long term customer.
Bottom Line? Real world accessible financing is no conspiracy theory - seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your funding and finance option 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
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Office = 905 829 2653
' Canadian Business Financing with the intelligent use of experience '
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
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.