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Information on the availability of special loans financing in Canada . If your business line of credit or commercial loan has been called here are your options
Special Loans Solutions For Canadian Firms – A business line of credit alternative
Options .Yes! Strategies and solutions - a double yes! Let's examine some real world solutions around the difficult situation of both being in and emerging from a special loans environment.
Typically the assets that have been used to finance and qualify your for your business operating loan of credit and/ or commercial loan are receivables, inventory, misc working capital accounts, and equipment . These assets have of course been collateralized by the bank under both a demand loan and general security agreement.
When we meet with clients who are facing a special loans financing requirement they typically have been up for review and renewal of their credit facility and have been advised that the facility will not be renewed under the favorable terms they have been receiving. Moreover other severe ramifications emerge, most notably a demand letter to exit the bank by a certain date.
It's critical at this time to assess in a very realistic manner the quality of your assets, as they are the accounts that will allow you to emerge under a satisfactory refinance strategy.
So let’s get back to that asset discussion, because that is what is going to take you successfully out when you are in a position of a commercial loan called scenario.
Canadian chartered banks have typical margining and borrowing for certain asset classes. In the case of receivables its typically 75% while inventory, no matter in what state, rarely reaches a 50% margin eligibility, whether its raw materials, work in process, or even saleable finished goods .
As challenging as it may be to finance inventory in the current Canadian business financing climate it just might be that inventory line on your balance sheet that allows you emerge from a special loans facility. Why, one word - ABL! Well it’s actually an acronym for ' asset based lending ' because it is typically an asset based lending arrangement that will be your exit strategy from a commercial loan that's been called.
In our opinion and experience one Canadian chartered bank will typically only in rare occasions re finance a customer who is in special loans financing need? Why? We think there are many reasons, but the main one being that in general credit analysis and posturing with commercial clients all banks have the same general criteria of commercial loan credit extension.
Therefore if you are out of covenant or off ratio based on your current loan agreement doesn’t it make sense that another similar institution would not waive those covenants and ratio arrangements that your firm has broker. Its just common sense we think.
So, it is the asst based lender that will typically be your solution, and yes savior in some circumstances when you require an exist strategy in special loans financing. Banks will rarely margin receivables and inventory to the extent that an ABL lender will, therefore increasing your borrowing base and in many cases not only providing you with an exit from the bank, but in fact more working capital that you had before.
In summary, it is often only an ABL... asset based lending arrangement that will be your solution to a called commercial loan in Canada . Facility structure and size and pricing vary great, so a great suggestion is to consult an expert, an experienced, trusted and credible Canadian business financing advisor who can work with you to relive the stress and financial ramifications of special loans financing in Canada.
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
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 100 Million $ of financing for Canadian corporations .
' 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
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Office = 905 829 2653
Click here for 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 100 Million $ of financing for Canadian corporations .
' 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
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