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 bank workout. Show all posts
Showing posts with label bank workout. Show all posts

Friday, January 17, 2020

Working Capital Lines of Credit and Loans That Work - Not Just For the Bank!













Working Capital Financing



When business owners and financial managers have successfully negotiated working capital facilities or term loans it should not be the end of the story. By that we mean that the business person needs to continually focus on what the bank or other financial institution requires, and more importantly, how they view the customer from a control point of view - i.e. are they in control or able to exert control on your business.

The balance sheet must be a top focus for the business owner - once a firm is over leveraged, i.e. borrowing too heavily, the bank generally starts positioning around their overall security or your ability to de-leverage.

Borrowers must be comfortable and knowledgeable about the use of 'triggers '. Triggers are the implied actions the bank or institution will take when things aren't working out. This can include everything from general poor financial performance to very specific pre agreed upon financial ratios. And the business owner must remember that he or she agreed to and concurred with these ratios.

Banks want to see cash flow' flowing ' - flowing to repay their debt - so there many be triggers put in place by the bank to ensure that minimum cash flow standards are kept, and also that owners and shareholders do not withdraw excess funds.

Over time business owners will probably find, in our experience, that the bank restrictions either tighten up or loosen, depending of course on the overall comfort level the bank has with the firm. Clearly firms that seem temporarily challenged in profits and balance sheet quality will receive much more scrutiny.

Business owners can do some very solid and valuable preparatory work in negotiation of bank triggers. If they have a solid long term history of earnings this should be a very strong negotiating point with the institution. Simply by self introspection of the firm can the owner or financial manager focus on what is going to go wrong re sales, pricing, forex, etc. The owner needs to be able to talk to these issues and show how he could address them.

For a start calculate your own key operating ratios, if they are going to be discussion points with your bank or institution you might as well know your numbers now. Using 'what if 'scenarios help immensely and will position yourself as knowledgeable about your business.

Discussions with your bank need not be absolute and immediate on any time of loan negotiation - you can get a great informal sense of what the bank is thinking and work from that point forward. Try and read between the lines as to what is hot, and what a Vis is not with the bank Vis their perception of your firm, industry, etc.

In summary, business owners need to show maximum flexibility on working capital and loan negotiations. Negotiations should be from strength, accentuating the positive. Example - strong forecast sales and profits and potentially offset a weaker balance sheet.

Trade-offs with the bank is also encouraged- and fewer triggers and covenants are better than more! And yes, there is more than one bank in the world, although business owners should be cautioned that shopping around is not optimal at all times, and can in fact backfire, particularly a small business. Business owner beware!






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.




Article Source: https://EzineArticles.com/expert/Stan_Prokop/432698


Article Source: http://EzineArticles.com/3679339




Monday, March 30, 2015

Special Loans & Bank Workout Relief - Exiting The Troubled Waters Of A Bank Breakup In Canada






Escaping The Bank Special Loan Workout – That Get Out Of Jail Free Feeling In Business Financing










OVERVIEW – Information on exiting a special loans category when your business credit facilities are terminated by Canadian chartered banks. A bank workout has various exit options











Special loans
is of course the name for your company’s relationship breakup with your bank, and Neil Sedaka had it right when he penned ' Breaking up Is Hard to Do!
How can business owners successfully emerge from a bank workout scenario and what options are available to do this? Let's dig in.

We've always been a little bit amazed at the surprise of some clients who advise us they didn’t see it coming relative to having their bank facilities called. Suffice to say that the implications of this 'relationship termination ' can be significant for your business if not attended to in the proper manner.

From the banks perspective it's a simple case of your company being deemed over and above the risk level they are prepared to take in an ongoing bank relationship that might have both revolving and term facilities in place for your financing needs. Typically your firm has not met the loan covenants and ratios established by the bank at the outset of the relationship.

The critical part of your Special loans journey involves any deadline set by the bank. Here it's important to determine whether the bank exit strategy is ' immediate' or if they will work with you on options that can ultimately save the relationship. The bank is of course interested in full recovery of any loans or credit facilities, so the critical question becomes: Can this relationship be saved or are other financing options available?!

We've used the word relationship a number of times - it's important to mention that your old account mgr and branch will often be disappearing at this point as specialized ' workout ' managers are now handling your banking.

We've worked with many firms who are in Special Loans and spent numerous amounts of time in seeking other Canadian chartered bank facilities to replace the stress of their Special Loans scenario. We have rarely seen this strategy be successful, if ever, if only for the fact that we're of the opinion that competitive banking is not achieved by buying someone else’s problems!

At this point never has it been more important to assess the assets and collateral your business has. We'll mention also that the bank workout managers will typically ask you to be reporting more on key asset categories such as receivables, inventory, payables, etc. In certain cases if your business is of a certain size expensive audits and appraisals will be required by the bank, at your cost. This is a great time to determine what you feel your future financing course will be, if only to avoid these high fees.

At the heart of the bank workout is your determination as to whether you in fact need to move on to another method of financing your business. In some cases if it hasn’t been made perfectly clear your bank might be viewing your entire industry as ' out of favor ‘. Over the years industries such as auto, printing, etc have found themselves to be deemed ' high risk ‘.

Various options are in place for new financing for your firm. Most typically they include new ' NON BANK ASSET BASED LINES OF CREDIT ' from commercial lenders who are focusing on your assets and business prospects. In certain cases temporary asset bridge loans might make sense, providing an interim step to a new finance strategy.

If you're looking for options and that ' getting out of jail free' feeling via your current situation in a bank workout special loans scenario seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can provide options in the troubled situation of your bank breakup .


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 SPECIAL LOANS EXIT 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 over 40 years of business and finance executive experience. He has been recognized as a leading credit/financial executives 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.