How Do You Finance A Business Purchase ?

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Sources Of Finance For Buying A Company In Canada

Buying a business in Canada is the goal of many entrepreneurs in Canada . The financing of that purchase requires some specialized skills when it comes to the strategies involved in acquiring an existing family business, or in some cases capitalizing on the unfortunate circumstances of firms that might be challenged in some manner. In some cases it's a solid way , versus organic growth, to grow revenues and profits via a merger/acquisition type scenario.


We at 7 Park Avenue Financial leave it up to our clients to identify the business opportunity they wish to explore from a purchase perspective. Our focus is on what comes next - ensuring you have access to solid a time worn financing strategies that will work for your success in a business acquisition.


Financing a Business Purchase In Canada

One part of the business finance puzzle that is often overlooked is known as the VTB .. AKA the ' vendor take back, if only for the reason that it minimizes the financing your are required to generate to close the transaction. That is not the only reason though! Another term for this strategy by the way is ' owner financing '. Anyway you look at it VTB's are a solid strategy that make it easier to access the other types of financing that you will need to complete the loan , which typically are term loans and business revolving credit lines.

We forgive business people for thinking that ' the bank ' is the only way to acquire financing to purchase a business. That's a logical thought, but of course there are a number of other options, some of them alternative in nature . However caution is required if you are unprepared to understand how a bank looks at financing - which can in some cases be an immediate road block.

Early on in the business acquisition cycle you must also agree with the seller as to whether the sale will be a purchase sale or an asset sale . This is a key accounting and legal type issue which is a separate subject in an of itself .

It should be noted that in the SME COMMERCIAL FINANCE area it is difficult to finance a ' share sale ' given that shares in small private companies are not liquid . So if financing is required in your purchase most owners are encouraged to choose the 'asset sale ' scenario. Naturally larger companies , public companies etc have a number of ways to finance purchases - they have much more access to capital . Those companies often consider share sales, and also are looking at numerous tax minimization strategies.

In looking at assets of the company you are focused on buying it's key to determine the value of those assets . In many cases in modern times some of those assets might even be ' intangible ', and might include patents, contracts, software, etc.
Tangible hard assets, typically the ' fixed assets ' on the balance sheet can easily be valued by appraisals from reliable and experienced third parties.


Goodwill is the excess dollar amount you're paying on top of the assets. Goodwill is typically difficult to finance, which is why our owner financing/vendor take back strategy is sometimes a good place to start. The sellers financing, often referred to as ' holding the note ‘can allow you to complete a purchase satisfactory to all parties.


Both banks and non bank commercial finance lenders view vendor take backs very positively. Since the seller of the business has a vested interest in making the purchase also successful you often can get very favorable, in fact below market financing rates from the owner or owners of the company being acquired.

Many smaller businesses in Canada, including franchises of new and existing locations can be financed with the assistance of the Canada Government Small Business Loan . The government guarantees a large part of the loan to your bank as long as you meet minimum requirements, which we at 7 Park Avenue Financial view as very reasonable .Owner financing can also be a part of the gov't loan . Many small and medium sized enterprises can utilize the Small Business Loan govt program to acquire a business. It works, as we have proved time and time again at 7 Park Avenue Financial.



A typical structure for financing a purchase when you’re buying a business in Canada is the down payment, debt financing, and the vendor take back/owner financing. This three piece solution to buying a company can also be complemented with a number of ' Alternative Finance ' strategies that might include:

A/R Financing

Non Bank Credit Lines

Equipment Finance Leases

Sale Leaseback strategies

Inventory Finance

Purchase Order Finance

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success when you're looking for assistance in structuring the best deal and financing for your business purchase.






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.

Stan Prokop

How Does Asset Based Lending Work ?

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Why Use Asset Based Lending ? It Works

The asset based credit line is a key part of alternative financing options available to Canadian businesses. As simple as the solution is ( i.e combining all your business assets into one borrowing facility ) it just might be the perfect solution for businesses that can't access any, or all, of the business credit they need in Canada.

It is interesting to note that this revolving facility is perfect for new, growing, and even large mature corporations , many of whom use the facility now days. When it comes to SME COMMERCIAL FINANCE needs business people would be surprised as to how many firms use this type of business finance.

There's probably no agreement on actually how tight business credit is or isn't in Canada - that debate constantly rages on . We continually read in both the GLOBE & MAIL and FINANCIAL POST that Canada is awash in capital, but here at 7 Park Avenue Financial we encounter clients with borrowing needs everyday, many of them dissatisfied with traditional access to business credit.


Naturally it goes without saying that Canada, despite the complaints of the Canadian business owner and financial manager, is probably in better shape than many other countries.

Asset based financing can be used for a business credit line, as we have noted, or also as a financing vehicle for purchasing a business or competitive business. It used the leverage in your assets to monetize your cash flow needs .

The ability of a business to fund both it's operations as well as growth is key to any level of business success. When it comes to banks and other more ' traditional ' lenders thousands of businesses can't meet the credit quality criteria that is required by these lenders.

So why has asset based lending gained such a dominant foot hold in the Canadian business landscape. While chartered banks have great rates and virtually unlimited amount of capital to lend many companies don't have the balance sheets, profits, and outside collateral often demanded by our banks, who for all the right reasons are more conservative in their lending practices.

So for that reason alone thousands of firms have gravitated to asset based finance solutions that focus on your assets and sales levels. As an interesting aside asset based lenders provide close to half of all of the business credit lines in the U.S. - So it is not hard to see why ' ABL ' facilities are growing in Canada - where relatively speaking it's a newer business finance solution.


So why consider ABL financing ? Simply if your firm can't meet traditional lending criteria and you still have assets and sales it allows you to harness new borrowing power .


Yes of course those same assets are being margined, just as your bank would have, but there are two major differences, we can call them the core of our ' naked truth ‘.



How Does Asset Based Financing Work ?


First of all your borrowing levels are raised significantly because your assets are margined at a higher rate , and the inventory component of margining is very aggressive, where in some case a bank facility might not even address that asset at all, or at lease only nominally .

Asset based credit lines also can include your equipment and real estate, if applicable, as part of your new borrowing power - bottom line : increasing borrowing power of your company .

And what about that 2nd difference or truth? It's a key point, in that the focus on ABL approval is not cash flow coverage and covenants, its just mainly about assets, which has great appeal to Canadian borrowers, especially those that struggle to meet those cash flow covenants imposed by traditional lenders.


Quite often we see tremendous flexibility in the size of such a facility, because in many cases business has peaks and valleys and bulges in financing requirements.

We don't consider it a drawback necessarily, but most asset based business lines of credit have your reporting on your monthly levels of a/r, inventory, sales, etc, allowing the ABL lender to monitor and justify your borrowing needs. In many cases we have seen that it allows companies to understand and run their business more successfully.

That then is some of the naked truth in this asset credit line .It's a part of the new reality of Canadian business financing that you should take a serious look at, especially if things are not working well now .

Speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success - Get the stripped down truth on the Asset Based Lending advantage .

Is Asset Based Lending Your Best Route To Business Financing Solutions ?

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ABL Is Your Back To Basics Business Finance & Cash Flow Conundrum Solver !

Business financing requirements for Canadian business often require very timely solutions .

Alternative finance solutions for your business are more and more becoming the new norm for funding companies in Canada. They get our clients to the ' goal line ' in a more timely manner when it comes to some of the timelines imposed on firms applying for traditional bank credit . Asset based lending , commonly called ' ABL ' solutions provide a solid funding alternative for your cash flow and working capital needs.

Clients of 7 Park Avenue Financial will often ask what is the key requirement for asset based credit lines, as well as the other funding solutions within the ABL world. That key requirement ? Assets ! Those assets can come in the form of receivables, inventory, equipment and fixed assets, company real estate, and in a round about way orders and contracts - those latter two being valuable but not on the balance sheet of course.

Those assets are collateralized or ' cash flowed ' in asset based borrowing facilities. A revolving credit facility, similar to a business bank line of credit is the common solution for many of our clients.

Cost always becomes a factor when it comes to ABL financing - it is more expensive than traditional bank rates, but the harsh reality is that many companies can't meet the key criteria required by banks such as solid consistent profits, clean balance sheets, and outside collateral and personal guarantees that available to secure bank financing.

It's safe to say though that most forms of business financing, however costly, are cheaper than giving up owner equity in your firm, especially for a firm that is growing and has promise of great value and success.

Although we stated that ABL typically costs more than bank finance solutions larger higher quality deals can actually compete with those bank rates, while at the same time providing much more liquidity !

So how does the asset based lender value and monetize those assets? Receivables are typically financed at 90% of the a/r base ; inventory margins vary depending on the nature and marketability of inventory and can range anywhere from 30-70% ; and finally equipment and real estate are typically appraised at their market or liquidation values. The bottom line? More borrowing power!

So what are some of the key benefits of asset based lending solutions? They include, as we mentioned, quicker approval . That is because the main focus of he ABL lender isn't all those financial covenants and ratios imposed by banks. For ABL it's all about .. you guessed it .. Assets!


Another point is flexibility. We see this lot. And it all comes down to the fact that there is a good chance that your business is different from many other businesses and in a different type of industry. We quite often see that a tremendous amount of flexibility can be applied, via ABL asset based lending, to your particular circumstances. Some of those circumstances might be seasonality of your revenues and cash flows, etc.

Asset finance has matured significantly in Canada. In historical terms we could say it's relatively new , but it has exploded onto the business landscape due to choices, costs, etc. Many Canadian banks have explored and are exploring these type of solutions . We keep reading in the Globe & Mail or Financial Post about the abundance of capital in the markets, and ABL lending is one of those reasons .
That's a good thing for Canadian business borrowers.

Asset finance solutions are typically revolving facilities and rarely add debt to the balance sheet . That's a good thing !

Speak to a trusted, credible and experienced Canadian business financing advisor who has a track record of success on a financing alternatives achievable for your firm, no matter what your particular circumstances are.



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.
Stan Prokop

Funding Business Cash Flow Needs In Canada

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Working Capital Loans & Asset Based Lending & Merchant Cash Advance Solutions Do The Trick

Information on Funding Options For Business Cash Flow Needs Via Alternative Finance Solutions

How Does A Business fund it's cash flow needs ? There isn't a day these days when we don’t meet or talk to a small business client who is having cash flow funding challenges. Several solutions in the alternative finance area are becoming increasingly popular . These include short term working capital loans, long term loans of the same nature, merchant cash advances , and asset based lines of credit .

With the right partner firm we have found this type of financing to be a solid interim solution for cash flow financing and working capital. Let’s look at how this type of financing helps our clients achieve working capital success and why it might be right for your firm.

Short Term Working Capital Loans

You can call it non traditional or alternative, but quite frankly its becoming more popular everyday and thousands of businesses are taking advantage of this type of business cash flow funding . The success of short term working capital advances finance always seems to come back to the issue of your business not being able to secure working capital financing from what we call our traditional sources, i.e. banks, finance firms.

And the reality around this type of financing is that it is quick and easy, and , more remarkably, often unsecured , depending solely on your ability to generate sales based on historical performance and projected profits . Even though the government continues to encourage banks to pay more attention to small business financing the reality is that traditional financing is 99.9% of the time secured via collateral, personal net worth’s, strong personal credit scores of the owners, and generally stable financial performance from a historical perspective.

The above is all well and good, but tends to eliminate the hundreds of clients we meet who have real business challenges and can’t meet some or all of the aforementioned lending criteria.

So how does this type of financing work. You may have heard of the business financing known as factoring. This, in a nutshell, is the financing of your receivables as you generate them. - I.e. same day cash for sales you make. However, thousands of firms, perhaps yours, have a major revenue component made up of cash and credit card sales, and you still need financing for the same reasons: purchasing inventory, reducing payables, making loan payments, etc.

That’s where short term working capital loans come in - in essence you receive cash today for future credit and cash sales , but the formula is based on your historical and current sales revenues.

Isn’t this risky for the lender, asks our clients? That may or may not be... but the reality is that if your firm, as an example , can demonstrate via bank statements or credit card sale stats that you have solid sales then the working capital lender is prepared to advance you funds today for a percentage of those future sales . A quick example is that you could receive , again, as an example, an $80,000 cash flow loan today and repay it, by agreement, with , for example, 20% of all future cash or credit sales . You are receiving cash today, allowing you to fuel further growth in sales and profits.

These loans typically are 1-2 years in length . Longer terms are available, with better rates, for businesses with fairly decent financials and who can evidence current positive cash flow.

Working capital via asset based lines of credit are a more robust solution for firms that have assets . These non bank credit lines margin your inventory, receivables and equipment into one borrowing line that fluctuates with your needs and cash flow .

If you are looking for the right way to fund short term or longer term cash flow and working capital needs speak to a trusted, credible, and experienced Canadian business financing advisor with a track record of business finance success. Find out how your company can benefit from innovative and valuable cash flow financing.


7 Park Acvenue 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.



Stan Prokop

Best Business Line Of Credit Solutions In Canada ? Read On !

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Every Business With Working Capital Needs Requires a Business Line Of Credit

Whether you call them Operating Lines of Credit , or a business line of credit, or even Asset based lines of credit via ' non-bank' lenders, these asset based lending and corporate finance solutions are fast becoming one of the most flexible and popular methods for small, medium, and large customers to finance their operations .

What if your business does not qualify for a bank credit line ? The solution ? Asset based lending is getting increasing popular with Canadian firms.Terms are more accommodating, and are usually ' non covenant' based . Unpredictable cash flows and seasonality are often other reasons why an asset based line of credit has substantial appeal to business owners and CFO's. These operating loans are totally focused on the assets of the business , most predominately receivables and inventory . The total focus of the facility is the ' Current asset ' portion of your balance sheet, ie receivables, inventory.

In certain cases equipment, real estate, and intangibles can be financed . Credit line facilities are set up based on your borrowing requirements relative to your receivable and inventory assets . Generally receivables under 90 days are financed, as those > 90 days infer uncollectability . Although some focus is placed on over all viability and secondary sources of repayment overall the focus is on the business assets . Rates vary based on size of facility, overall asset quality, and the lender pricing model.

This type of financing provides the firm with significantly more liquidity as the Canadian chartered banks usually lend only 50-75% on current asset categories such as receivables and inventory .


More and more Canadian businesses in the small and medium sized enterprise space are finding it difficult to achieve the operating lines of credit they need from our traditional lenders such as the Canadian chartered banks. These firms are turning to asset based lenders . In our experience many companies are not even aware that such a financing option exists .

Asset based lending places less emphasis on proven track records and financial strength , instead focusing on key business assets such as accounts receivable, inventory, and in some cases equipment and real estate .

True asset based lending should not be confused with ' factoring '. In a factoring environment the company in effect sells their receivables to another firm at a discount . Asset based lending allows the company to bill and collect its own receivables . The loan is paid down and reduced , in a fluctuating manner , as the company collects its invoices .

This type of financing can in effect become a strong lifeline in the current liquidity and credit crisis . Banks traditionally margin receivables in a more conservative manner , and further significant reliance is placed on the customers over all financial health with respect to the current balance sheet and income statements .

The one negative aspect of this type of lending is that it comes with a higher cost . The lender usually has a higher cost of capital and is looking for a significantly higher return than a traditional chartered bank .

In most cases more reporting by the company is often required . That is to say they are more often submitting updated reports related to current receivable and inventory levels . Overall a more rigorous due diligence is in place .

The current asset based lending market in Canada is still quite small , but the industry is clearly growing .

In summary, small and mediums sized businesses should check out asset based lending , ie an ' abl loan ' , as an alternative to traditional bank financing . Due to the complexity and relative lack of knowledge around this industry the firm should work with a trusted business financing advisor . Asset based lending can provide unlimited liquidity to firms who are growing - because it focuses on the assets, not the balance sheet and income statement !

Business owners and managers should seek qualified assistance in locating an asset based lender that suits their industry and overall financing requirements re loan size, etc . A study done by the CIBC several years ago indicated that business owners who sought out trusted financing advisors had revenues 76% above those who did not seek a business financing specialist or trusted advisor . Traditionally these types of loans or operating facilities are for firms with under 50 employees .

Asset based lending in Canada is a classic case of a source of capital at the right time, given the current turmoil in the financial and credit markets . Many special situations can be addressed by a constructive asset based line of credit - these include buyouts, cross border projects, and debt restructuring .

Many firms that are even in bankruptcy or receivership can avail themselves of a true asset based lending agreement . Although it is often a more expensive type of financing the case can be made that the asset based financing is much cheaper than the firm issuing additional equity and diluting ownership . Key benefits are improved cash flow, stronger reporting capabilities and the maximization of receivables and inventory financing .

Whether you are seeking of small business line of credit or if your firm has substantial working capital needs owners and financial mgrs should ensure they 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 traditional or alternative finance 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.



Stan Prokop

Alternative Finance . All That Glitters Just Might Be Gold In Canadian Financing Loans And Lending Alternatives

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Traditional or Alternative Finance ? What’s Your Poison?!



Information on accessing the right alternative finance when it comes to loans and asset based financing choices in Canada . Financing alternatives don’t have to be traditional in nature to work for your company

When it comes to ' Alternative Finance' in Canada could it be that all that glitters is in fact gold? We suppose that is just our way of saying that the Canadian business owner and financial manager could well do to appreciate loans and financing alternatives that just might do the trick... today!

We don’t think we can find too many business folks that admit that there is a whole new landscape in Canadian business, especially since the 2008 Apocalypse... aka the the global meltdown in corporate and bank finance.

That change has literally forced business / financial people to search out new alternatives and choices in financing their business. So while traditional financing became more restrictive... alternative financing became... you guessed it... more popular.

That is not to say that Canadian traditional sources, i.e. our banks, arent out there looking for new business ... they are... it's interesting for us to watch it from the outside because invariably they are simply competing with each other to take business away from each other that is already in place . That’s little consolation for start ups and high growth companies, as you can imagine.

One common criticism of Canadian traditional financing, aka banks, insurance companies, etc is that it takes time. Nothing happens quickly in these highly regulated institutions. That is where non traditional finance is viewed is simply viewed as more ' nimble '.

For the business owner and finance manager that needs quick term loans, equipment loans and business credit lines there are a number of alternative finance vehicles. If we had to summarize them we could say they were:

NON- BANK ASSET BASED LENDERS

LEASING COMPANIES

CAPTIVE FINANCE FIRMS

MEZZANINE FUNDERS

TAX CREDIT FUNDERS

RECEIVABLE AND INVENTORY FINANCIERS

SUPPLY CHAIN P.O. FINANCE FIRMS

On balance it sometimes seems to us that there are less and less people in traditional institutional financing that can make credit decisions. Or is it just that we don’t seem to have access to them on a direct basis?
Maybe that is just us. Alternative finance lenders have to understand assets and being nimble almost 100% of the time.

Financing alternatives and loans from non traditional lenders typically revolve around the balance sheet. If you have assets that can be valued and generate cash, simply speaking... they can be financed! Naturally not every asst on the balance sheet can be properly financed - good will is a good example of that. And it's also to match the right amount of alternative financing with your asset category whether it be current assets that are monetized daily for cash flow, or longer term fixed assets that require specific lease financing or bridge loan strategies.

Our bottom line today - simply that you just might be surprised as to how much real ' glitter ' is shining in alternative financing vehicles. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor to identify sources of alternative or traditional capital.

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.

Stan Prokop

Alternative Finance Solutions? Why Non Traditional Financing Alternatives Just Might Work For Your Canadian Business

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Seeking But Not Finding Alternative Financing In Canada
Hint - It's Not What You Think !

Information on alternative finance solutions for Canadian business. Non traditional financing provides significant financing opportunities

Not every one these days is totally clear on the term of alternative finance , so lets recap some non traditional financing alternatives that just might make sense for your business financing needs. And to quote ourselves you just might find that alternative, in some cases, is the ' new traditional '!

First thought that comes into a clients mind when they think of the need for business capital? Of course it’s the Canadian chartered banking system. But thousands of business owners and financial managers quickly find that while somebody seems to be qualifying for those loans and other bank facilities it isn’t them!

We don’t want to weigh in too heavily on why the banking solution isn’t always totally available for your business - it’s just a fact that the Canadian banks manage risk very well! But when you qualify boy are those rates attractive!

We will add one more point about the banking system in Canada, which is simply that while you might in fact qualify your needs, ironically may be deemed too small or too large. How ironic.

So that allows us to move on to a discussion on alternative financing vehicles that might just work for your firm. One of those is in fact a bank alternative that is non bank nature. It's the government guaranteed SBL loan program. Although it’s facilitated by a bank the majority of the loan is guaranteed under the INDUSTRY CANADA loan program, allowing you to tap into rates, terms and structures that are attractive.

To access the SBL program you need to seek a bank employee who is aware and comfortable with the program. And the other qualification is simply a loan package that covers off the basics, which isn’t hard as you might think. Your financials, a business plan, and some back up documentation and you are off to the races.

Another solid form of alternative financing is Asset based lending. These are non bank commercial credit facilities that secure, into a business line of credit your A/R, inventory, equipment, and real estate if applicable.

Almost any firm (with assets!) qualifies for ABL lines of credit - including manufacturing firms, service companies, technology companies, etc. Most facilities start at the 250k range and there is pretty well no limit on the upper end of an asset based deal. Oh, and by the way, some of the largest corporations in Canada use this ' alternative ' finance vehicle to run their business. Apparently (to quote us!) alternative is the new traditional for them.

Other forms of alternative finance? You just might be surprised. They include"

Receivable finance/factoring

Supply chain PO finance

Tax Credit Financing

Securitization of A/R


Seek out and speak to a trusted credible and experienced Canadian business financing advisor on how alternative finance can work for your firm... and you just might find that alternative is the new traditional!

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

Business Purchase Financing Tips : End The Confusion On The Type Of Loan You Need To Buy A Company

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Conventional and alternative solutions to business acquisition financing in Canada.


Information on business purchase financing in Canada . When you buy a business or competitor what type of loan and financial approach is required . Key issues to consider and focus on

We've spoken of buying a business and the types of purchase financing and loan that will help you accomplish that goal.

If you are using a more traditional approach and utilizing a Canadian chartered bank to finance the purchase we highlighted key elements of a successful close - management depth and experience, a strong business plan, and solid financial projections.

Don't forget also that typically in a more traditional process, i.e. through a bank you will also be required to provide personal financials and the guarantees that come with that. At the end of the day you want to be viewed as an owner or management team that has a strategy and objective, and that you are going to truly focus on growth and profits.

That issue of personal guarantees always comes up in client discussions. While we can in a general sense that any business purchase in the SME sector in Canada will come with that personal guarantee of the owner we can also quite safely say that you have some negotiating power on that issue that you might not know you had.

Are there any alternatives in the whole issue of the personal guarantee? We can offer up that different banks and finance firms have different focuses on the personal guarantee, and the reality is that if you are dealing with an experienced credible banker that has credibility with the bank underwriters you definitely have someone on your side in this issue.

As a final comment you can focus on some restrictions to your guarantee commitment, and you can even have a long term objective with your banker of then focusing on a release of the guarantee sometime in the future.

When we get down to the actual finance structure of your transaction it's critical to focus on the key assets of the business - accounts receivable, inventory, fixed assets, and in some cases real estate. One key issue that you want to determine early on is the issue of ' concentration ‘... for example if a huge part of the business volume is coming from one or two customers. This ' concentration ' issue alone can sometimes make or break your financing on the deal.

Cash flow is the solution that will take you to the goal line if there are not enough assets to complete the financing. On the other hand if cash flow is light or poor the actual assets might be the one element that allows you to successfully complete a purchase.

At a time like this it's actually useful to have a short list of the key elements that a bank or finance firm will focus on when it comes to approving your transaction - In ' old school ' terms they will be character and management depth, cash flow, collateral, current financial condition, and growth plans.

If you can't, or choose not to finance the business purchase through a bank numerous other solutions are available. They include temporary bridge loans, and asset based loan, unsecured cash flow loans, and receivable and inventory financing firms. Never forget you have the option to go ' ' conventional' or ‘alternative’.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with the right type of loan when you buy a firm and are seeking business purchase financing.

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