Bank Financing Loans In Canada . Does A Business Loan Seem Like A 1 Million Step Recovery Program ? It Doesn’t Have To

Is Selecting A Bank For Financing Your Company Harder Than Herding Cats?

OVERVIEW – .Information on bank loan financing in Canada . What are the right steps and strategies to address business loans from Canadian chartered banks


Bank financing in Canada . When it comes to a business loan from a Canadian bank why does it sometimes feel more challenging than ' herding cats '? Some clients feel that the process of getting approved for a bank loan is more difficult than working your way through the 12 Step Recovery program! We've got some clarity and solutions, so let's dig in!

Unlike many, we've got a different angle on bank financing success in Canada. And it’s a pretty simple premise - it’s about your banker, not the bank. Is it just us , but don't all the banks have those great branches, high ceilings, columns at the door to their head office, and that ' church like ' quietness that makes those halls so hallowed.

In the U.S. the borrowing situation is even more compounded for stress - you actually should be checking out your bank there to see if it’s healthy for loan to deposit ratios, etc! We in Canada don't have that problem - but it’s still a challenge nonetheless.

Our Canadian banks do a great job of avoiding risk - they are world renowned in that area. So the job of the Canadian business owner and financial manager is to demonstrate that your business loan or revolving line of credit is not risky. That means being able to demonstrate profitability and the ability to generate cash flow.

It's also critical to prove that you can demonstrate some decent, however rudimentary, financial reporting. The basics are often fine - monthly balance sheet and income statement, aged A/R and a/p, etc. We would submit that if you can't produce those you've got bigger problems already that you don't know about.

We also point out to our clients that in the ' old days ‘a lot of the credit approval for bank business loans resided at the branch. These days it’s with underwriters at head office that we can assure you that you'll never meet. They are probably nice people, but you won't be the judge of that!

So it is therefore important to communicate clearly with your banker as to what's important and what isn’t when it comes to ratios, collateral, historical track record of your company, etc. In the case of banking in Canada more often than not more info is better than less. Sales and growth projections are very solid tools.

Accountants and experienced Canadian business financing advisors are solid resources in negotiating with banks. They have both the relationships and know the lingo!

Any bank financing request should clearly indicate:

Funding required
Term and Nature of financing - i.e. term or operating
Use of funds
Repayment capabilities via cash flow or monetization of current assets

The bank will ALWAYS focus on collateral quality and cash flow. Be prepared to discuss those.

So, should you focus on finding the best bank in Canada for your business? Our own opinion is to seek the best banker. Remember also that numerous non bank financing sources are available to Canadian business. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with you bank and non bank commercial business loan needs.

P.S. It's probably just us but we suspect the bankers in the TV commercials aren't actually the ones approving our financing request .




Stan Prokop - founder of 7 Park Avenue Financial

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


7 Park Avenue Financial = Canadian Bank Financing and Business Loan Expertise






7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com

















Stan Prokop

Bank Financing In Canada. See Business Credit With Different Eyes

Is There A Shortcut To Better Bank Financing In Canada ?


OVERVIEW – .Information on bank financing in Canada . Business credit can be accessed through chartered banks, if you know the criteria . When you can’t meet those criteria alternatives are available



Bank financing in Canada. Business credit is not always viewed the same way by business owners and financial managers. In many cases clients we meet are sometimes even thinking there's some sort of short cuts to quicker assets to bank finance.

Let's take a look at the proper way of addressing and accessing this critical financing for established and growing companies. And by the way, if you’re not established and doing well there are in fact other business financing alternatives to financing your business. Let's dig in.

The key point in achieving bank financing success in Canada is knowing of course how the bank views lending. That's actually the simple part of the puzzle, because, simply speaking, banks are cash flow lenders with a, shall we say ' strong interest ‘in secondary sources of repayment! Those secondary sources include personal guarantees, collateral, etc.

In fact that's one of the key challenges you face if your firm in the opinion of the owner and manager has great prospects - because our Canadian chartered banks focus on how predictable your cash flow and profits were in the past. So having a bad current or past year in a number of areas simply puts you behind the 8 ball quite a bit.

While it’s not the concern of business of the business owner / manager one must not forget our banks, who are among the best rated and highest reputation in the world are highly regulated. As Canadians that’s a good thing when it comes to bank stability, solid capital bases etc. That, however, does little for the business owner looking for some maximum thinking or ' out of the box ' thinking.

Pricing for bank financing for business credit needs is pretty well the best relative to any other comparable finance solution. However, how is that pricing established? In the end it’s a combination of collateral you personally and your firm can provide, shareholder equity, the infamous ' cash flow coverage ‘

An interesting point? Even if your firm has all of those you might find that the bank views your entire industry as unfavorable or high risk, as a result you'll still be significantly challenged when looking for business credit solutions. That's when some of those other alternatives might make sense. Those include:

A/R financing
Asset based lending
Sale leasebacks
Mezzanine financing
Tax Credit financing

Many businesses find themselves in the unfortunate position of being place in SPECIAL LOANS if they default on their bank covenants. We again point out to clients in that position that there are numerous non bank alternatives to being rescued from special loans designation.

One other conundrum of the business owner seeking bank capital in Canada is ' GROWTH ‘. Growth is a good think right? Not so fast mister... or Mrs! That because when it comes to financing growth means using cash, not generating cash, and banks historically wrestle with that issue. Again, that’s where some of those non bank solutions work best!

There is no real short cut to bank financing and business credit in Canada. You have to see it through the banks eyes, not your entrepreneurial ' special vision ' glasses!

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with bank needs and alternatives sources of capital.



Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

7 Park Avenue Financial = Bank Financing Business Credit And Alternative Solutions


CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
















Stan Prokop

Looking For Bank Financing In Canada ? Commercial & Corporate Banking Success Strategies

How To Approach Your Need For Bank Financing


Information on accessing commercial corporate banking facilities in Canada . Banking financing success tips for the Canadian borrower.



Bank financing in Canada. Should it be a mystery to the Canadian business borrower seeking a commercial corporate banking facility? We don't think so, and here's why.

It's no secret that the Canadian chartered banks are typically the first ' go to ‘solution for both debt and operating financing. Because of our strong centralized banking system the product and service availability in Canada for commercial borrowers covers a broad spectrum - business lines of credit, term loans, etc.

So what are some of the reasons that your firm’s ability to seemingly tap these great sources of capital seem unattainable? It comes down to understanding where the other side is coming from, and we can guarantee you that the ' other side' is focusing on first: CASH FLOW... and second ' Collateral. And those two items by the way are pretty well in order of priority!

Another point that needs to be mentioned and addressed in either your discussions or presentation (verbal or otherwise) is the concept that those cash flows must have some sort of level of predictability.

Many of the products and services offered by banks in Canada are also offered by what we term ' non bank ' commercial lenders. They are not regulated. Banks of course are strongly regulated in Canada (we hope!). The reason they take a bit more of a conservative approach is that they are constantly balance their own capital, profits, and general liquidity. It would seem they have the same challenges as your firm!!

The emphasis on those points we have mentioned above relates to how they address lending criteria, when it comes to types of assets financed, cash flow coverage, and personal guarantees. The Canadian business borrower needs to understand that its bank criterion that determine your loan pricing, rates, and where you stand in the banks credit scoring model. (Investment grade is good ... if you're in special loans that’s bad).

Many Canadian firms that accessed bank financing might in fact find themselves being placed in the ' special loan ' category we mentioned above. Your bank facilities are recorded as none performing, and in general the bank wants you to leave. Not all the time... most of the time. Business borrowers who find themselves in special loans are very salvageable when it comes to exiting a bank relationship. Often they might simply be ' out of covenant ' and that can be addressed by altering criteria of a non bank lender. We often speak to clients that are in Special Loans that are in fact courting other banks .It’s our experience that banks don’t purchase their competitors problems; it’s as simple as that. So non bank solutions are the best for the exiting of a Special loan scenario.

Another key premise to get under you belt is the fact that bank pricing is pretty well the best and lowest priced financing in Canada. Banks don’t have upside on your deal - they just want to get paid. So address your presentation, (again verbal or written) with a focus on repayment and stability and management experience. If you look at the financial statements of most banks we think you'd find that commercial borrowing isn’t the real profit center.

How do you find the best corporate bankers in Canada? Please not we said bankers, not banks. You do that by developing a relationship with sources that know who these specific bankers are.

As a final note, because you're getting the lower rates in Canada we don’t recommend posturing for the last basis point in rate reduction. Instead focus on covenants, guarantees, and relationships.

Bank financing and commercial corporate banking is great financing. It's available to many, but not all. If you do qualify speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in forging a facility that makes sense for your firm.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS BANKING FINANCE EXPERTISE



Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/bank_financing_commercial_corporate_banking_canada.html

Canadian Commercial Business Bank Financing - What’s Right ( And Wrong ) With Your Banking Strategy

Business Lines Of Credit In Canada



Information on Canadian bank financing . Commercial business banking strategies vary with your needs and current situation and required needs for growth or survival.



Canadian business owners and financial managers assess their commercial business banking and financing needs at different times in their company's life.

As in many other facets of business it's a little difficult to develop a solution and fix a problem if you don't understand the fundamental problem.

The need to grow your business and be profitable usually drives a bank financing need. A growing business consumes, and needs more cash, if only for the fact that you’re building up receivables and inventories.

In Canada business operating lines of credit are offered by our chartered banks. These facilities finance your A/R and inventory via specific margin calculations.

Most Canadian firms that have this type of credit facility submit monthly financials and aged receivables, which in turn create a new borrowing base under which you can draw funds. Companies that are having challenges ( i.e. they are in special loans ) or who are in breach of covenants may in fact be required to submit almost daily cash flow and receivable reports .

Although the basic arithmetic around bank financing and commercial banking is simple in reality there are a lot of other factors that might end up affecting your bank facility.

What are some of these? In the continuum of time certain industries fall in and out of favor. No better example of this is offered up than the auto industry. Other factors that you as a business owner might not like that affect your bank financing are issues such as your profits ( or lack thereof!) , they quality of business and outside collateral, and your banks insistence on personal guarantees.

Bank financing works best under the following condition - your company is expanding, but at a reasonable rate. One of the greatest ironies of Canadian business financing is that a hyper growth business, even if its generating profits, is often viewed as financing challenged by a Chartered bank.

Business banking utilizes a very basic concept that is often misunderstood by the Canadian business owner. That's simply the fact that with a commercial bank line of credit you're drawing on assets of your growing business to pay older items. But wow, when your business ceases to grow, or profit your ability to draw cash flow out of your A/R and inventory business line of credit stops. But you still have operating and fixed term payment obligations and it now becomes difficult to pay suppliers.

Companies that have a solid handle on cash flow needs and their historical working capital inflows and outflows are in the best position to manage their firms and access bank financing.

Time and time again we meet with clients that tell a very similar story - business grew, expansion plans were put in place, fixed and operating costs grew, and .. you guessed it .. sales started flattening or going down. The result - a recipe for financial disaster!

The ability to manage your cash flow, or, alternatively, slow down your business is key. Speak to a trusted, credible and experienced Canadian business financing advisor for commercial bank financing that makes sense from where your firm is now.






Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing.
Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/bank_financing_commercial_business_banking.html