Business Bank Loans In Canada : Checking Out Banking & Asset Based Lending And Working Capital Finance Alternatives

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Everything You Wanted To Know ( but were afraid to ask ? ) About Business Bank Loans In Canada !

Information on business bank loans in Canada. Financing your business requires a knowledge of working capital solutions that comes from traditional banking or alternative asset based lending

Banking and business borrowing in Canada is significantly different than in the United States. That is primarily driven by the fact that our banking system is uniquely different. In the U.S., borrowing finance is driven through various entities - which include major ' money center banks ', Commercial banks, community banks, and what are know as S&L's, ( savings and loans ). In addition the American landscape is populated by community banks.

The Canadian banking system is different, in that the country has chosen to adopt a more smaller ( by competitor ) banking system that is extremely concentrated and dominated by a handful of major players. Primarily these are:

* RBC ROYAL BANK, * TD CANADA TRUST, * CIBC * BANK OF NOVA SCOTIA, * BMO BANK OF MONTREAL, * LAURENTIAN * NATIONAL BANK OF CANADA

All of these banks support the Canadian Small Business Financing program sponsored by the federal government.

There is a decent sized credit union movement in Canada, and many of these credit unions are making forays into Commercial banking and financing. Many people tend to feel these credit unions have not yet accumulated either the talent or the capital pool to properly play in business banking and commercial lending.

We would point out that some time ago now the government introduced legislation to allow foreign banks to lend in Canada. These banks are known technically as ' SCHEDULE B ' banks, and are referred to a briefcase bankers in that they do not have the large branch networks that are the domain of our BIG 7 banks as listed above.

Capital for Canadian firms is traditionally much harder to secure in the Canadian banking system. Outside of the aforementioned CSBFL program that is federally underwritten the banks tend to secure small business loans with usually up to 100% of personal collateral. That of course has the customers pledging personal assets, savings, etc. There certainly are no ' templates ' for fast quick borrowing in the Canadian small business banking. Loan criteria is judiciously adjudicated by underwriters on a case by case basis, and as has been noted, relies heavily on the traditional three C's of credit -

character - capacity - capital

And don't forget collateral !

As the Canadian banks have emerged from the current world economic crisis they do however seem to be placing more focus on smaller firms. For example new divisions for small business banking are being created within some players, seminars and trade shows are being offered, and they often sponsor local events.

Larger firms who in many cases do not meet the requirements of the Canadian banks when it comes to significant borrowing requirements are often forced to consider asset based lending arrangements with Canadian and U.S. commercial finance companies who have stepped in to play a role in this vital area.Even though the larger firms may in fact have been in business a number of years their balance sheets and income statements do not meet the borrowing requirements of the Canadian loan committees. During the 2009 world economic crisis and financial meltdown the Canadian banks were consistently lauded for being some of the best run in the world. However, the downside of this is that ' best run ' in many cases means risk averse and commercial borrowing in Canada is significantly more difficult than in other countries such as the U.S.

The Canadian banks have distinguished themselves by developing software and technologies that have put them at the forefront of commercial borrowing/lending.

In summary, the Canadian banking system is uniquely structured and Canadian business, both larger and small,should focus on the unique strengths of the system borrowing and banking needs. Not all companies will be successful and business owners should ensure their financial executives or advisors know who can best meet their borrowing needs. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with business funding needs.





Stan Prokop - founder of 7 Park Avenue Financial –


Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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.


Stan Prokop

Business Financing Solutions & Bank Loans In Canada : Solving The Term Loan Challenge

Everything You Wanted To Know About Bank Term Loans and Alternative Financing Solutions

OVERVIEW – Information on the term loan process in Canada. Here’s what you need to know on achieving success with business financing solutions that include bank loans and other working capital and cash flow alternatives

Business Loan expertise ? Most business owners and financial managers know the story - the bank has the money, you need it. Term loans can be a tough negotiation for any business owner. Part of that is simply because the final conditions imposed upon the bank can be somewhat restrictive.

As simple as it may seem, the business owner has to think like the banker - that allows one to reverse the negotiation stance to some degree. Also, it's all about 'strategy'.


We would point out also at the outset that there are a number of banks, and an equally larger number of independent finance firms that offer term loans. The business owner should ensure he is aware of the market players, and who offers what. The goal tends to always be the same though - get the largest loan at the best rate. Not easy to achieve!


Business people as we have said, should have a solid strategy in the entire process, and believe me it's a process.

Borrowers can benefit by doing research into the banks current market and objectives in commercial finance. There will be issues and objections raised by the bank on the owners submission - they should be dealt with in a manner that keeps the loan submission positive in nature. Thousands of books are written on the art of negotiation, and no business owner can expect to reasonably get the full amount with all terms that he or she asked for.


Term loans are generally for long term assets. They are paid by future cash flows and earnings. That bring two bear two key source of information that should be properly prepared - what has the business done financially, and what has it he potential to achieve - i.e. a forecast.


Banks focus on cash flow - so they will want to carefully look at what the risk is to those future cash flows. Business people should be prepared to talk thoroughly about their own particular industry, many industries are currently out of favor - example: automotive; many are sought and in favor: 'Green' industries - (solar, et al).


The owner should anticipate what risks the bank or other lender will perceive in their industry - they should be prepared to talk to those risks. Owners should also remember that although they need this term loan now for this asset, that the bank will also want to look into what else they might need in the future, which might have the ability to restrict the cash flow somewhat.


Unfortunately more often than not the lender looks to historical cash flow to reflect future cash flow - therefore is a company has lots of changes in sales and profits over the years the why's and wherefores around these need to be discussed and presented.
While the focus is definitely on cash flow the balance sheet will definitely come under scrutiny. Weaknesses in the balance sheet need to be tabled and discussed.


Banks love 'ratios'. We have called them 'number relationships' .
It is highly recommended that the business owner review and understand some of those 'ratios 'which will come under scrutiny. Typically those are liquidity, operating, and fixed asset coverage ratios.


In summary, all banks and other finance firms have very similar and basic analysis models around term loans - they involve industry and financial statement analysis, focusing as much on the past and future as the present. It behooves business owners and financial managers to understand some of those metrics used by banker, which should, in the long run, limit loan restrictions and get the business owner the capital he or she needs.


By the way, although our conversational focus has been term loans it’s critical for business folks to understand numerous other cash flow, debt and working capital options are available to your business . Those options include:

A/R Financing

Inventory Loans

Asset based bridge loans

Non Bank asset based lines of credit

Unsecured cash flow loans

SR&ED Tax credit loan finance

Royalty Finance

PO Financing


Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your term loan or cash flow needs.



Stan Prokop - founder of 7 Park Avenue Financial –

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com

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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.


Stan Prokop

Business Loan Success : Got What It Takes For Bank Loans And Alternative Finance Strategies?

Eliminating The Word Painstaking From Business Financing Success

OVERVIEW – Information on business loan requirements in traditional and alternative finance in Canada . Bank loans and other non bank financing strategies come with some basic requirements which are discussed

Business loan success, whether its bank loans or alternative finance often has owners/mgrs wondering if they've got what it takes. We're going to try and eliminate the word ' painstaking' from your challenges around funding your company in the SME COMMERCIAL FINANCE
marketplace. Let's dig in.

Business funding needs arise out of a number of requirements for any owner/mgr who is focused on growing the company's sales. Typically those needs come from the desire to expand, introduce new products or take on new contracts, even acquire a competitor.

Financing your business can come from traditional (typically ' bank ') or nontraditional finance sources. Suffice to say alternative finance has been very much on the rise since the great recession of 2008-9. Each category of loan has different requirements that will help guarantee financing success- therefore our question - Have you got what it takes!

Small and medium size firms, whether you like it or not has both traditional and alternative lenders looking at owner finances and credit history. While many newer forms of alternate finance ( asset based business credit lines, a/r financing, tax credit financing , etc) place much less emphasis , and in some case almost no emphasis on personal credit of owners suffice to say a higher personal credit score is better!

The absolute fundamentals of any business loan revolve around your ability to provide, or at least ' talk to ' a business plan and cash flow and revenue forecast. These are very basic requirements - they are not rocket science. Also, this is not a good time to be a dreamer - realistic projections win.

In some cases all the financing you might need will be ' collateral ' based. Hopefully that’s business collateral and not personal assets! As an example the GOVERNMENT GUARANTEED SMALL BUSINESS LOAN requires no personal assets be pledged,, and actually finances leasehold improvements as well as fixed asset/equipment needs.
Also, many EQUIPMENT LEASING firms are able to finance your asset and equipt. needs without outside collateral or a focus on personal owner credit.

Finding a great commercial business banker (notice we said banker, not bank) is worth its weight in gold. Given Canadian banks are the closest thing to an oligopoly (think monopoly) loan requirements rarely differ at banks. Your banking success will deliver loan rates and unlimited access to capital if... ands it a clear if... you have:

Owner personal credit
Business commercial credit history
Assets
Cash Flow
Mgmt Depth

As we have said each business financing category has some absolute basic requirements. Some of the basics in each category? They include:

A/R Financing - requirement to show aged receivables of a reasonable credit quality

Inventory Finance - A marketable inventory of goods that can readily be priced and sold as the fundamental collateral of an inventory loan

Non Bank Asset Based Lines Of Credit - receivables, inventory and fixed assets that can be well documented on an ongoing basis

Tax Credit Financing - the ability to produce a credible SR&ED claim with appropriate documentation

Bridge Loans/Sale Leasebacks - equipment or real estate assets that have been appraised or valued to mutual agreement between yourself and the lender

Still not feeling like going it alone? In many cases your firm has the ability to improve both improve or make more attractive your loan success by working with a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your business loan, banking needs, and alternative solutions.


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 LOAN AND ALTERNATIVE FINANCE 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.






















Stan Prokop

A Government Backed Business Loan : How Not To Fail At SBL Bank Loans

The Path From Start Point To Successful Finish In Govt Business Loans – The SBL Goal Line Is In Sight

OVERVIEW – Information on the government backed business loan in Canada. Known as the ‘ SBL ‘ these bank loans provide tremendous financing possibilities to Canadian business owners and start up entrepreneurs







The government backed business loan in Canada - what Canadian business owner/financial mgr wouldn't want a clear start to finish road map for ' SBL ' bank loans in Canada? Let's dig in.

Expectation, or should we say ‘realistic’ expectation is key in understanding the path to success in govt business loans. Specifically this is the financing offered under Industry Canada's CANADIAN SMALL BUSINESS FINANCING (CSBF) program. Our chartered banks fit in because they are the facilitators of the loan under the government’s ever watchful eye.

So how does the owner/entrepreneur successfully prepare an application and obtain financing approval for these loans? It's all about really bring the pieces of the pie together in accordance with what is really required to achieve loan success - we see a lot of clients focusing and preparing issues and info respectively that is simply not required or is much less important relative to final loan approval. Doing it right allows you to eliminate the pitfalls and failure.

At the outset its key to understand the amount of financing you are eligible for. In the case of the program itself it's specifically $ 350,000.00 for the main offering of the program. (If real estate is involved as the asset financed a 500k loan is allowed - however in our experience SBL loans are rarely used for real estate).

One top expert, and we agree, advises that adopting an ' as much as I can get ‘attitude is a failed strategy!

Here is one case where being specific counts - and that is easily achieved in the following manner: Have a clear ' use of funds ‘statement that specifically identifies the asset and leasehold to be financed, including the $ breakdown. That also reminds us that you need a clear understanding that government backed loans only finance two asset categories - equipment and leaseholds. Equipment by the way can easily include technology, software, etc., as these assets are clearly part of the new economy.

Other key elements of your proposal should include info on the owners - that includes mgmt and industry experience, financial stability, and a general sense of demonstrating you know how to run a business. Newbie’s beware!

The other key element of your application is a strong executive summary, or even better a business plan. This should not be viewed as a difficult document - they can easily be prepared by your accountant, or even better an advisor who works in this area and understands the basics of what the banks like to see - specifically cash flow, an opening balance sheet, etc.
Fine tuning the cash flow to show a positive and realistic ability to repay the loan is essential.

The majority of businesses applying for an SBL loan operate out of a premise, and you should ensure that you have a lease that is at least as long as the term of the loan - for some reason lenders like to know you'll still be around !

In the cases of your ' owner equity ' or ' down payment ' in the program that is a minimum of ten per cent but depending on who you are dealing with that might be more. Demonstrating up front you have ' proof of funds ' is key.

If you want to become a quick ' hero ' in SBL government backed loans and have that ' zero to 60 ' feeling seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with govt bank loans that are achieved annually by as many as 8000 other businesses in Canada that take advantage of the program.



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 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN GOVT BACK LOAN FINANCING EXPERTISE






Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
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

Stan Prokop