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Quick Guide to Types Of Business Loans
Different types of business loans can, in some cases, be challenging for business owners to achieve . Certain types of funding are often much better suited to your company's financing needs.
The good news is that a number of business finance solutions are more accessible than ever . Naturally the ' go to ' in the minds of many owners and their financial mgrs is ' the bank '. Here capital is virtually unlimited and the rates are typically the lowest when it comes to cost of funds .
Bank financing comes with a challenge though - the need to provide full financial disclosure around financial statements, owner personal credit history and net worth, collateral, personal guarantees, and in many cases the requirements to produce a business plan or cash flow forecast . Don't forget to take into consideration the ' timing ' factor, in that the process time might often be weeks stretching into a month.. or more.
Types of business loans offered by banks :
Business credit lines
Term Loans
Equipment Loans
We can safely say that Canadian banks offer the most flexibility and access to capital when a firm qualifies . Factors such as years in business, profits, acceptable balance sheet ratios , etc are key to bank loan approval.
Early stage businesses often utilize personal financial resources to access cash - that includes business credit cards , loans from friends and family, etc. At 7 Park Avenue Financial we encourage clients to separate personal and business financing , as those types of resources are not often the best choice to finance a company, as business failures can significantly damage personal credit .
Alternative Lending
For those firms that can't access all or even some of the funding they need alternative financing comes to the rescue . Alternative lenders provide the same types of loans available from banks - and are often quicker to approve loans . The cost of this financing is higher , but it provides access to capital.
Typical solutions available from alternative financiers include -
Non bank business credit lines
Inventory financing
A/R financing ( aka ' factoring ' )
Short term working capital loans
Tax Credit Financing ( SR&ED loans )
Both banks and alternative finance companies provide loans for long term business growth - These needs might include :
Commercial mortgages for owner occupied facilities
Mergers and Acquisitions
Franchise Financing
Leasehold Improvements - ( leaseholds can be easily finance via the Government guaranteed business loan )
These types of loans are typically longer in duration - ranging 2-5 years
If you are focusing on ensuring you understand and have access to the right type of commercial loans for your company seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success.
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
7 PARK AVENUE FINANCIAL website !
7 Park Avenue Financial provides value added financing consultation for small and medium sized businesses in the area of cash flow , working capital , and debt financing .
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 .
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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