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Looking To Avoid Business Financing Disasters?
OVERVIEW – Information on business loans in Canada. Whether you’re exploring a bank loan or the new frontier of financing alternative solutions you need this information
Business loans in Canada have owners/financial mgrs treading some specialized ground. How can the financing alternative solutions available be accessed if they aren't understood. Even bank loan scenarios have some critical factors attached to them. Let's dig in.
Let's examine three things you need to know that will allow you to feel that bank financing in Canada is not insurmountable. The general sentiment among small, medium, and in some cases large corporations is that bank financing is both difficult and challenging in the Canadian marketplace.
Let's examine three key points that will assist most business owners with overcoming obstacles to Canadian bank financing .They are as follows -
1. Are you looking for operating financing or term financing with your bank - there is a difference!
2. What are the key issues around bank financing access?
3. What are the requirements to obtain specialized alternative financing?
The reality is that traditional financing, aka ' the bank ' requires the spirit of a true working relationship. It should pretty well never be all about just rate of course, as terms are critical also. Bankers focus on relationships while alternative financiers are more 'transaction' ' timing' focused!
A line of credit or a bank term loan? Is there a difference? There definitely is! If you are looking to either purchase an asset or expand your business your focus should be on the preparation of sufficient data to support that financing request.
We feel strong that to be considered for such financing you probably should have an established relationship with the bank already, either on a personal or a corporate basis. It would also help if you had already established some form of operating facility.
In many cases your firm simply needs an operating facility. If you are an established business, have growth and profit potential, and a relatively clean balance sheet you are in a position to negotiate an operating facility for receivables. Typical facilities margin your receivables at 75% and inventory typically might come in at 40%. We encourage clients to carefully discuss what we will call 'bulge needs 'with your banker.
Remember that it's challenging when you find out that banks can't support temporary increased needs, often called ' bulges ;.This is in many cases where the client and bank relationship falls apart, because the business owner assumes that the bank will support increased temporary needs for the business.
Whether you're focused on bank financing or alternative finance the basics should always be available - financials / cash flow / business overview -plan, etc.
Having a primary lender is often the most desirable financing alternative. However, be aware that in today’s environment numerous alternative finance solutions are readily available - They include:
A/R Financing
Inventory Loans
Asset based non bank credit lines
P O Financing
SR&ED Tax Credit Loans
Sale Leasebacks
Etc!
Knowing what financing works for your business, as well as what's available and approval criteria is key to avoiding financing and cash flow disasters. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow & business loan 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
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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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