WELCOME !

Thanks for dropping in for some hopefully great business info and on occasion some hopefully not too sarcastic comments on the state of Business Financing in Canada and what we are doing about it !

In 2004 I founded 7 PARK AVENUE FINANCIAL. At that time I had spent all my working life, at that time - Over 30 years in Commercial credit and lending and Canadian business financing. I believe the commercial lending landscape has drastically changed in Canada. I believe a void exists for business owners and finance managers for companies, large and small who want service, creativity, and alternatives.

Every day we strive to consistently deliver business financing that you feel meets the needs of your business. If you believe as we do that financing solutions and alternatives exist for your firm we want to talk to you. Our purpose is simple: we want to deliver the best business finance solutions for your company.



Showing posts with label acquisition financing options. Show all posts
Showing posts with label acquisition financing options. Show all posts

Thursday, December 5, 2019

Business Acquisition Loan Success Factors













Questions You Might Be Afraid to Ask About Business Acquisition Financing






Business acquisition financing in Canada. When you are looking for funder for a merger or if you're acquiring a firm remember something we heard the other day - ' Genius is often just pointing out the obvious truth that no one else sees'.


So when we recently talked about some critical aspects you  should not overlook with this type of financing challenge we remembered ... ' Wait ... there's more!”


It's critical in such an exercise to ensure you understand that both yourself and the other firm have somewhat separate agenda's. No question on that one! Simply speaking, it’s important to step outside those agendas, look inside, and ensure you have the right evidence on assets, cash flow, and valuation.


Experts in the field say that trends now show that while there seems to be a lot of businesses available for purchasing and financing many deals simply fade into oblivion. A lot of reasons might exist for that fact- one of them might simply be poor objectives, inadequate financing knowledge. As an acquirer it’s important not to underestimate your capacity to value and finance a deal, as tough as it might seem to admit that.


Many purchasers and sellers have a huge challenge in assessing the issues of existing and future debt in your deal. The amount of debt that is in fact existing, or planned does not necessarily make or break a deal, most experts seem to say that it’s all about two things - hard assets, and cash flows. And by the ways that’s future cash flows that you can reasonably predict!


Remember also that unless you're purchasing a public entity, which certainly doesn't happen a lot in the SME sector the liquidity issue around all those assets and intangibles doesn't really exist. So your challenge is, yes, to understand the value of assets and cash flows, but don’t forget those items such as intangibles! Perceptions of clients and lenders for smaller firms are equally as important.


There are of course some real basic methods to value your acquisition or merger and assess the financing needs. Businesses in the SME sector will typically be valued at a multiple of current cash flows. The time period in which you will be able to retire and pay back debt is also important.


Oh, by the way, don’t forget those skeletons in the closet! They might include existing financing and credit problems with banks and other lenders, bad publicity, upcoming industry issues, potential loss of major accounts, and overvalued assets.


You do have the financing tools available, to make the ' right ' acquisition. They include-



Government business loan - The ‘SBL’

Asset Based Lending

Bridge Loans

Cash Flow loans

Bank term loans



Hopefully we have pointed out some of those ' obvious ' truths that will make you acquisition and financing more successful. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist you with your business acquisition financing and funding needs.






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

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.



Tuesday, August 11, 2015

Acquisition Financing Options In Your Business Purchase Options In Canada





Financing Is the hidden connection to a successful business purchase or acquisition


OVERVIEW – Information on acquisition financing options for Canadian firms considering business purchase or mergers



A business purchase in Canada has to come with some acquisition financing options for entrepreneurs and business people. And for those options the more the merrier and creativity is certainly welcome. The right financing at terms, rates and structures is really the hidden connection to a successful purchase/acquisition. Let's dig in.

Bank financing is often the typical first choice among purchasers, but accessing this type of capital comes with certain criteria that sometimes can't be met. Firms in the small to medium sized market place are often underserved when it comes to acquisition finance options. More about some of those bank criteria later.

So, those other options? One of those is ' seller finance' - allowing the owner to participate in the actual business financing. Naturally owners must be both motivated and able to participate in such a transaction.

Cash flow or ‘mezzanine' type finance is another option when bank ' senior debt ' can't be arranged. It is in effect unsecured business financing, allowing you to rely on the cash flow, and profit margins of the business to pay back the loan which is typically 3-7 years in length. Here it's critical to demonstrate that those cash flows we require have been there historically, now, and in the future!

When both the seller or cash flow financing is not possible another solid source of purchase finance is 'Asset based lending'. This type of commercial lender will focus solely on the existing balance sheet of your business - and those assets of receivables, inventory, and fixed assets - as well as real estate if applicable. Be mindful also that there must be enough assets left over to also enable you to have operating working capital.

The strongest and most common ' sub set ' of asset financing is Receivables finance. A credit line against receivables provides solid liquidity.

Back to those bank criteria we've mentioned already. Although there is a lot of truth in the fact that banks prefer larger merger and acquisition activity they are certainly willing in the current competitive banking environment to service merger and acquisition transactions in the SME COMMERCIAL FINANCE area.

Buyers should be well warned that certain financial ratios and covenants around cash flow, debt to equity, etc will always be on the table with the bank. You can almost pre-quality yourself by spending some time determining if cash flow of 1.25:1 and debt to equity of 3:1 are in fact achievable under your finance plan. Here owner equity to some level will again, almost always be required.

Banks recognize that transactions financed properly help the new business to be stronger and more successful. That includes being able to eliminate other competition, achieve economy of scale, as well as grow the business geographically or with new products and services. A strong business plan with conservative clarity around growth, profits and cash flow is clear here.

Being able to negotiate the right price is as important as funding your business properly - many owners/mgrs/entrepreneurs will need help in the different valuation techniques employed by those ' big boys' on Bay Street.



Poorly informed purchasers around financing, valuation, and creative alternatives are almost certain to fail. If you're looking for proven financing techniques in a business purchase seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in ensuring you are not in ' no mans land' when it comes to buying a business in Canada.



Stan Prokop

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 . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS PURCHASE FINANCING EXPERTISE






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


' 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.