YOUR COMPANY IS LOOKING FOR BUSINESS ALTERNATIVE FINANCE SOLUTIONS!
Breaking Boundaries with Alternative Finance: The New Face of Business Loans
You've arrived at the right address! Welcome to 7 Park Avenue Financial
Financing & Cash flow are the biggest issues facing business today
ARE YOU UNAWARE OR DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
EMAIL - sprokop@7parkavenuefinancial.com
BUSINESS FUNDING OPTIONS IN CANADA OUTSIDE THE TRADITIONAL FINANCE SYSTEM
Business Loans in Canada come from ' traditional ' or alternative loans and working capital sources.
INTRODUCTION TO WORKING CAPITAL / CASH FLOW SOLUTIONS VERSUS TRADITIONAL FINANCING
Around the time of the 2008 financial crisis, the nature of business financing and access to capital changed in Canada - a lot .. and can we not even talk about the Pandemic, please! Traditional lenders in Canada consolidated and somewhat retreated from SME financing in Canada. Alternative lenders have stepped in over the last number of years to fill the void, offering Canadian business financing solutions that are accessible when compared to a traditional business loan.
For any business, large or small, access to business capital is critical - As a company's needs evolve, it is more evident than ever that non-bank business financing can provide every type of finance a business needs to grow. Let's dig in on the types of working capital and cash flow solutions you need.
Working capital and cash flow loans exist in more abundance than ever. So if you're a business owner or financial manager looking for help with small business financing outside of other companies' traditional thinking, let's dig in on types of business financing that make sense for your company!
UNDERSTANDING ALTERNATIVE FINANCE AND THE ROLE OF TRADITIONAL LENDING VERSUS ALTERNATIVE FINANCING
Alternative financing offers a large variety of Canadian business finance solutions; these include short-term working capital loans, receivable financing solutions, non-bank business lines of credit, asset-based financing, and tax credit financing for r&d of film projects.
Traditional lending often entails complex application processes and strict requirements, with approvals primarily based on credit rating. Conversely, alternative financing offers a more accessible route with a streamlined online application process, faster turnaround, and a focus on a business's potential, making it an attractive option for businesses seeking swift, reliable funding.
Historically business owners and financial managers with SME COMMERCIAL FINANCE asset finance and working capital needs worked through traditional channels, almost always' the bank. ' These firms traditionally don't have access to bank loans or the capital markets/venture capital. Given up on equity crowdfunding? So have many others! And don't forget equity funding will always demand a small percentage of your business - if not more!
Competition and efficiency in the Canadian lending markets have brought several new and different types of alternative capital solutions to your business - the challenge is knowing which is the right good option for your company and how one accesses capital in this manner.
UNSECURED LINES OF CREDIT
The golden solution in the past has been 'unsecured bank lines of credit ', focusing on companies with proven cash flow, great balance sheets, and good history for companies and owners. The problem is that thousands of firms, maybe yours? ... can't meet all those requirements, as logical as they might seem (if you're a banker).
Numerous alternative cash flow sources have grown steadily in Canada - one of the fastest-growing is in the area of receivables finance/invoice finance/invoice discounting, where the ability to use your sales as collateral via business A/R overall credit rating is the appeal.
FINANCING OF WORKING CAPITAL
Some great solutions are derived from this method of invoice factoring for business owners via the financial channels of a third-party factoring company for accounts receivable. For example, historically, your clients had to be notified of this process and financing. Not so fast, though! Utilizing Confidential Receivable Finance for unpaid invoices - acting as almost a bridging loan that allows you to generate immediate cash flow as your business sells and generates revenues while giving you the option as your firm takes responsibility to bill and collect with no notification to other parties as customer pay.
A factoring company, via accounts receivable factoring/ invoice financing, is, in fact, one of the most popular funding as an example of non-bank lenders who provide alternative funding. Unlike banks, each A/R financing solution has its own benefits, so talk to the 7 Park Avenue Financial team about what suits your business model when you're looking for easier access and a streamlined approval and application process.
EQUIPMENT LEASING SOLUTIONS
When acquiring assets for your company (equipment, technology, vehicles, software, etc.) Equipment leasing is a bit unique in that it embraces both traditional forms and alternative finance needs. Almost any asset can be financed with considerable flexibility regarding monthly repayments, amortizations, prepayments, down payments, etc. Interest rates are very competitive regarding equipment lease financing - as well as it is a solid alternative to a bank loan with more stringent credit requirements in the traditional financial system.
That is what small business owners want to hear!
Clients often ask us why we are so bullish on alternative financing solutions. For a starter, don't get us wrong - Bank financing in Canada has a low cost, has a lot of flexibility, and provides virtually unlimited access to capital. Still, when it comes to unsecured business loan requirements, many firms can't meet bank criteria for borrowing.
But when ' the bank says no, ' working capital loans and asset monetization strategies from alternative lenders might work.
But reality sets in when many business folks realize that banks prefer ' upstream ' - namely, more significant deals with high-quality credit companies. Top experts tell us that one recent survey indicated over 40% of firms in the small to medium enterprise sector in Canada don't fully qualify for bank financing.
ALTERNATIVE FINANCE PRODUCTS / SOLUTIONS
Alternative lending solutions are available for a broad range of business finance needs. Each type of financing suits a specific need around cash flow and working capital that help to fund business growth and profits.
Tax Credit Financing (sr&Ed / film and TV)
Leasehold Improvements Financing
Condominium Corp Finance Loans
Management buyouts/acquisitions
Commercial Property Finance
Non-bank Asset-based business lines of credit
Bridge loans against real estate and equipment
Working capital short-term loans - Initial loans are typically based on a percentage of your sales financial history - Online lenders/peer-to-peer lending sites often offer this solution, also known as a merchant cash advance. Your business agrees to repay the loan on repayment terms that are on a typically fixed installment basis. Good owner credit history/credit score required.
It's no secret that organizations such as the CANADIAN FEDERATION OF INDEPENDENT BUSINESS. Companies consistently cite that the SME COMMERCIAL FINANCE needs of the Canadian economy always focus on the lack of and access; to.. more capital!
The Power of Alternative Lending: Empowering Businesses
Many business owners and financial managers find their firms turned down by traditional bank financiers and are sometimes unaware of the criteria for SME borrowing in Canada when they want quick access to funding.
Small and medium-sized businesses must understand that traditional banks type financing will always revolve around the ' infamous ' 5 C's of business credit -
THE 5 C'S OF SMALL BUSINESS FINANCING APPROVAL
Character
Capacity
Capital
Collateral
Conditions
Sometimes, you may want to ensure you have a solid business plan. The 7 Park Avenue Financial team prepares business plans that meet and exceed bank and commercial lender /alternative lenders' requirements. Startup funds and startup funding, in general, are difficult to access if you are not adequately prepared.
CONCLUSION - ALTERNATIVE BUSINESS FUNDING OPTIONS
Canadian small and medium-sized business in Canada needs access to reliable sources of working capital - When conventional financing is not available and timelines to access traditional funding are long Canadian businesses can access alternative lending solutions that provide flexibility and ease of access to financing. Alternative finance solutions are a compelling and needed alternative to traditional funding to support the growth of a business.
The bottom line? Your business has finance alternatives for alternative lending solutions versus traditional financing for a financial product suited to your needs. Business finance for small businesses in Canada will always be a challenge - but solutions do exist.
Speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with business loans and working capital solutions that make sense for your company and industry.
FAQ: FREQUENTLY ASKED QUESTIONS
What is alternative finance?
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Regulated banks and similar financial institutions are great for many businesses. Still, the criteria they impose on smaller firms often can be too much to handle regarding bank loan requirements for business. Alternative lending refers to the need for other financing options versus traditional financing options so small companies may thrive and prosper in their respective markets without being suppressed by an unfair playing field favouring larger enterprises with more resources than these small and medium-sized businesses and startups have access to presently.
Alternative finance is a well-utilized commercial financing vehicle for available funding when companies can't raise funds based on their trading history. Alternative finance/ structured finance refers to non-bank financing via p2p lending, 3rd party commercial lenders / accredited investors, hedge fund managers, etc., who lend money..typically at higher interest rates and who view this as an alternative investment in alternative asset classes.
What is alternative financing for small businesses?
Alternative financing refers to non-traditional methods businesses can use to obtain funding versus a traditional bank loan. These methods deviate from traditional financial institution such as standard bank loans and traditional business financing, including merchant cash advances, invoice factoring, or an online line of credit. They are primarily utilized by small- and mid-sized businesses looking for flexible, fast, and more accessible funding solutions via alternative business lending.
How does alternative financing compare to traditional bank loans?
Unlike traditional bank loans, alternative business financing offers quicker approval times, less stringent credit requirements, and a more streamlined application process than conventional bank loans. While traditional loans can take weeks or months to process for a business looking for a small business loan, alternative funding sources often approve and deliver funds within a few business days. However, alternative financing can have higher interest rates and shorter repayment terms than traditional loans.
Why is alternative financing becoming more popular among small businesses?
Alternative funding for small business loans is growing in popularity due to its flexibility and accessibility compared to traditional bank financing. Small businesses often face challenges obtaining traditional bank loans, like rigorous credit checks, long approval times, and high collateral requirements. Alternative financing provides a solution by offering various lending products, including asset-based loans and invoice factoring, focusing on the overall business performance rather than just credit history.
What types of alternative financing options are available for small businesses?
A wide range of alternative business loans and financing options are available for small businesses. Some of the popular ones include merchant cash advances, where companies receive a lump sum in exchange for a portion of future sales via the working capital loan based on an annual revenue calculation; invoice factoring, where businesses sell their unpaid invoices to a lender for immediate cash; business lines of credit, allowing firms to borrow as needed; and asset-based loans, using a company's assets as collateral to secure the loan.
What factors do alternative lenders consider when approving a business for a loan?
The alternative lender will look at various factors beyond business and personal credit scores. Alternative business lending criteria can include time in the business/industry, monthly sales, cash flow, and overall health. In many cases, alternative business lenders use technology to evaluate these factors quickly and efficiently, making the application process faster and simpler than traditional methods.
Click here for the business finance track record of 7 Park Avenue Financial
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