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Alternative Financing Needs Outside of Canadian Bank Business Credit
Business credit access via banking and alternative finance solutions often have business owners and their financial managers searching for the optimal finance solutions for their ongoing funding and growth needs . These solutions come in the form of business credit lines, term loans ( longer in nature - typically 2-5 years ), and short term working capital loans . 7 Park Avenue Financial clients tell us it is often somewhat of a nightmare, or at minimum, a negative experience , when it comes to searching for the right amount of capital.
How then can the business owner be successful in achieving the right financial solution for their company , while at the same time eliminating that 'negative ' vibe that comes from initial failures in securing capital.
Because the majority of business people consider ' the bank ' as the premier lender in Canada one piece of guidance we can provide is to choose the right banker, not the bank per se. An experienced commercial banker can provide you with the financial and business guidance to solve almost any financial challenge.
To gain confidence of a commercial bank , or even a business financing advisor the business owner / financial mgr must be able to properly present their current financial condition in the form of cash flow , business projections, and a clear overview of your business assets and financial potential . By the way a good business plan can pretty well do all that .
Good information such as noted above will give your lender or advisor a solid idea of incoming and outgoing cash - and will often suggest how your firm can best ' bridge the gap '.
Many business owners find the whole issue of personal guarantees a major problem in their financial decisions around business credit. Of course the majority of banks almost mandate personal guarantees, while at the same time mandating outside collateral . While alternative non bank business lenders will often request guarantees it is safe to say less emphasis is placed on that owner ' promise to pay'.
Also it is important to know that guarantees can be negotiated in many situations- they can be limited or in rarer instances waived - although in general these are exceptions, not the norm. The bottom line on guarantees is that your personal assets and credit history are a large part of traditional bank lending . In certain times in the economic cycle banks pull in the reins on business credit - you therefore need to know where the banks and your particular industry are in the credit cycle.
While the need to cultivate a positive relationship with a lender is important it's key to note that other 3rd party professionals such as lawyers, accountants, and credible business financing advisors can also steer you to the right lender or financial solution. Those introductions can be worth their weight in gold when it comes to establishing a relationship with a bank or commercial lender.
Key Criteria For Achieving Business Lending
Business people often ask us what lenders are looking for when it comes to accessing loans or business credit lines . We can summarize that pretty concisely - depth and experience of management, a good business model, and the right amount of debt and equity in their business. In the new economy companies can be either
asset intensive or service based - it's all about successfully marketing your service of product.
A final note on bank loans in Canada? Unlike the U.S. which has hundreds, even thousands of different banks and even more independent non bank finance firms Canada's banking system is smaller. Clients who are bankable often focus on ' rates ' - in our opinion the rates will vary no more than some basis points from bank to bank.
Your focus should be on the banker, and the structure, terms, and guarantees surrounding your bank loans or credit lines. That saving of a couple basis points will be non existent in your mind when you get locked into a structure or guarantee or ratio and covenant scenario that you can't get out of.
Non Bank Alternative Financial Solutions
Traditional finance solutions provide almost unlimited capital to a business that is profitable , has good cash flow, and is growing . Many firms don't necessarily meet all those criteria , so it's important to know that a number of key alternative financing solutions are available to run, grow, or even save your business.
These asset based lenders and provide :
Non Bank Business Credit Lines
Sale leaseback Solutions
Tax Credit Financing ( SR&ED )
Short Term Working Capital
Purchase Order Financing
Can you avoid business credit nightmares in Canadian banking? We sure think so... consider talking to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success on achieving some of the best business banking and alternative finance solutions in Canada.
7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
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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