ABL Lending Versus Bank Financing - What is Right For Your Business Exploring Alternative Financing Solutions - A Deeper Dive Into ABL Versus Bank Lending

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YOU ARE LOOKING FOR ASSET BASED FINANCING / ABL LENDING  BANKING SOLUTIONS

BEYOND BANKS - THE ABL / ASSET BASED LOANS  LENDING SOLUTION FOR CASH FLOW / WORKING CAPITAL

You've arrived at the right address!  Welcome to 7 Park Avenue Financial 

        Financing & Cash flow are the biggest issues facing businesses today

               Unaware / Dissatisfied with your financing options?

Call Now! - Direct Line - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

Email - sprokop@7parkavenuefinancial.com

 

 

UNDERSTANDING THE ASSET BASED LENDING SOLUTION – WHAT IS IT  / HOW DOES IT WORK? 

 
Are you enjoying life as a commercial borrower in Canada -?

We can't even imagine some of the answers to that question, although we have certainly heard a lot of the stories!  Let's examine why a new breath of fresh air – Asset based lending, aka  ‘ABL lending ‘ has become a favourite and very unique banking and asset financing strategy in Canada.

 
WHAT IS ABL LENDING? 

 

ABL lending is also commonly known as asset-based lending / asset-based financing -  This form of funding a business via an asset based loan utilizes the technique of collateralized loans by financing business  physical assets such as accounts receivable, inventory, and fixed assets - as well as in some cases commercial real estate if held by the business. ABL, although commonly used as an alternative to bank financing, is focused on the assets of the business, versus the typical bank credit profile - Banks focus on strong business credit scores, as well as in many cases requiring personal guarantees and external collateral -  ABL, on the other hand, focuses solely on business assets.

 

COMPARING ASSET-BASED LENDING VERSUS BANK CASH FLOW LENDING  – PROS AND CONS

 

One of our favourite expressions these days is that the old ways don’t work anymore.

 

As it relates to today’s subject of business financing we're talking of course about commercial banking facilities in Canada, and focusing primarily on firms that have challenges raising working capital and cash flow facilities that work - thereby qualifying for an unsecured loan.

It often comes down to a comparison of the two types of financing, traditional Canadian commercial banking, and our favourite new kid on the block, ABL lending and banking. We use the term new but quite honestly it’s simply a Canadian business financing facility that hasn’t been heard of by many Canadian business owners and financial managers for a variety of reasons.  Maybe some people prefer to hide a good thing and keep it secret.

 

COMPARING INTEREST RATES AND FINANCING COSTS IN BANK FINANCE VS ABL LENDING SOLUTIONS

 

 

 

THE ADVANTAGES OF ASSET BASED LENDING – FLEXIBLE, FAST, AND FINANCING BASED ON YOUR SALES AND ASSETS!

So what's better, a 'regular' commercial banking facility via a Canadian chartered bank, or ABL lending and financing via a true asset based line of credit?  Regular commercial facilities are extremely focused on criteria for mutual success - we say mutual because we hope everyone agrees that your firm and the lender both have to win. (By the way, we are on our client's side in that battle).

 

Borrowers, however, must understand that financing costs in asset-based lending solutions are commonly higher and companies must be able to report properly on the company's assets via financial statement updates, as well as provide information on sales, receivables, payables, etc.

In certain cases, other assets such as  intellectual property or ' brand ' might qualify for additional financing within the credit facility.

 

THE ROLE OF CREDITWORTHINESS IN A BANK FINANCING SOLUTION

 

score history and ratios, personal guarantees, liens and covenants

Got what it takes for a Canadian commercial banking facility?  You know the drill - you need reasonable leverage, no significant events that are negative in nature, covenants that are a combo of income statement and balance sheet based - for example, fixed charge coverage, etc.!

 

Canadian banking loan approvals place a heavy emphasis on business credit score history and rations, personal guarantees, and liens and borrowing covenants related to the credit facility. Businesses should also expect to have best practices for inventory management.

Traditional lending is of course alive and well in Canada – banks provide commercial loans/business loans for an unlimited amount for financing that meets bank creditworthiness criteria.

Lines of credit and unsecured loans come at competitive interest rates from banking financial institutions. Companies must ensure they met business credit score criteria and must be in a position to provide personal guarantees as well as adhere to loan covenants and financial ratios as set out by bank underwriters

 

ABL LENDING ELIGIBILITY

But hey, what about ABL banking and asset financing - what's required there?  Are you ready? Just assets!

That’s the appeal of asset-based banking and financing - it focuses almost solely on current assets, key categories being, of course, receivables and inventory.  Where our commercial banking friends focus in a dramatically different manner in analyzing and funding your business, the ABL focus is simply on asset monitoring and ensuring you can borrow on a daily basis at the highest of advance rates based on real-world values of your assets. Oh, and by the way, 'strange events' are fully allowed - so you have a challenge, an acquisition, a special loan situation, a year of bad luck... You will still be forgiven by ABL lending and banking.

CONCLUSION – THE RIGHT FINANCING OPTION FOR YOUR BUSINESS

 

ABL loan solutions provide a business with access to working capital and enhanced cash flow that otherwise might not be available from traditional bank lending.  ABL facilities are flexible and often custom-tailored to a particular business or industry - that flexibility in the type of repayment provides access to capital that otherwise might not be available.

Want to ensure you have maximum availability on borrowing against your assets on a daily basis - speak to a trusted, credible and experienced Canadian business financing advisor about an asset based line of credit that makes perfect sense for your company. 

 

Speak to the  7 Park Avenue Financial team about our expertise in working capital loans and accounts receivable financing solutions that combine inventory financing and equipment financing in a secured lending non-bank lending solution. Debt financing via alternative financing solutions can be the growth capital you are looking for to grow your business.

 
 
 
 FAQ FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION

 

What is asset-based lending?

 

Asset-based lending /ABL is a type of financing that uses the assets of a business as loan collateral. Typical balance sheet assets that are financed include accounts receivables, inventories, and fixed assets. Widely used as an alternative to traditional financing institutions such as banks many companies in the SME sector utilize ABL credit lines and term loans as a senior lender solution to the company's funding needs.

 

How  does ABL lending differ from traditional bank financing?  Why choose asset based lending?

The difference in ABL lending, when compared to traditional bank finance solutions, is that banks focus on financial fundamentals around strong balance sheets, cash flow, and profit generation. Cash flow financing is a cornerstone of bank unsecured lending. The emphasis in bank financing solutions is also on the personal guarantee of the owners and the potential need to provide external collateral.

 

Secured lending can assist businesses in obtaining financing when traditional finance cannot be accessed. Additionally, ABL loans are often used in business turnaround and the restructuring efforts of a company.

Asset based lenders focus on the sales revenue and business assets, deemphasizing limited personal credit history, low personal credit scores, etc.

 

 How can a company determine whether ABL lending is right for them?

 

Companies considering ABL lending should consider their cash flow needs in day-to-day funding of operations, and the ability to provide asset coverage around key business-specific assets.  Multiple forms of collateral can make up an ABL financing line of credit or term loan- and the ' covenant light structure ' of ABL is a key benefit of this method of financing.

Businesses that cannot achieve some or all of the bank financing they need to run and grow their business are solid candidates for asset-backed lending solutions. Business owners should also be prepared to understand the interest rates and cost of financing in accessing ABL capital. A broad range of industries and businesses in the Canadian economy utilizes asset backed loans.

Companies using ABL products such as financing  for receivables can receive up to 90% of the face value of the receivables - allowing the company to pursue  growth opportunities  via more financing and liquidity around the borrowing base investment in A/R - The positive impact of accounts receivable financing on cash flow and working capital should not be underestimated when considering the investment companies make in carrying trade receivables.

 

 

 

 

Click here for the business finance track record of 7 Park Avenue Financial

Business Credit Solutions For Bank & Alternative Financing Needs

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Alternative Financing Needs Outside of Canadian Bank Business Credit

Business credit access via banking and alternative finance solutions often have business owners and their financial managers searching for the optimal finance solutions for their ongoing funding and growth needs . These solutions come in the form of business credit lines, term loans ( longer in nature - typically 2-5 years ), and short term working capital loans . 7 Park Avenue Financial clients tell us it is often somewhat of a nightmare, or at minimum, a negative experience , when it comes to searching for the right amount of capital.

How then can the business owner be successful in achieving the right financial solution for their company , while at the same time eliminating that 'negative ' vibe that comes from initial failures in securing capital.

Because the majority of business people consider ' the bank ' as the premier lender in Canada one piece of guidance we can provide is to choose the right banker, not the bank per se. An experienced commercial banker can provide you with the financial and business guidance to solve almost any financial challenge.

To gain confidence of a commercial bank , or even a business financing advisor the business owner / financial mgr must be able to properly present their current financial condition in the form of cash flow , business projections, and a clear overview of your business assets and financial potential . By the way a good business plan can pretty well do all that .

Good information such as noted above will give your lender or advisor a solid idea of incoming and outgoing cash - and will often suggest how your firm can best ' bridge the gap '.

Many business owners find the whole issue of personal guarantees a major problem in their financial decisions around business credit. Of course the majority of banks almost mandate personal guarantees, while at the same time mandating outside collateral . While alternative non bank business lenders will often request guarantees it is safe to say less emphasis is placed on that owner ' promise to pay'.

Also it is important to know that guarantees can be negotiated in many situations- they can be limited or in rarer instances waived - although in general these are exceptions, not the norm. The bottom line on guarantees is that your personal assets and credit history are a large part of traditional bank lending . In certain times in the economic cycle banks pull in the reins on business credit - you therefore need to know where the banks and your particular industry are in the credit cycle.

While the need to cultivate a positive relationship with a lender is important it's key to note that other 3rd party professionals such as lawyers, accountants, and credible business financing advisors can also steer you to the right lender or financial solution. Those introductions can be worth their weight in gold when it comes to establishing a relationship with a bank or commercial lender.


Key Criteria For Achieving Business Lending

Business people often ask us what lenders are looking for when it comes to accessing loans or business credit lines . We can summarize that pretty concisely - depth and experience of management, a good business model, and the right amount of debt and equity in their business. In the new economy companies can be either
asset intensive or service based - it's all about successfully marketing your service of product.


A final note on bank loans in Canada? Unlike the U.S. which has hundreds, even thousands of different banks and even more independent non bank finance firms Canada's banking system is smaller. Clients who are bankable often focus on ' rates ' - in our opinion the rates will vary no more than some basis points from bank to bank.


Your focus should be on the banker, and the structure, terms, and guarantees surrounding your bank loans or credit lines. That saving of a couple basis points will be non existent in your mind when you get locked into a structure or guarantee or ratio and covenant scenario that you can't get out of.

Non Bank Alternative Financial Solutions

Traditional finance solutions provide almost unlimited capital to a business that is profitable , has good cash flow, and is growing . Many firms don't necessarily meet all those criteria , so it's important to know that a number of key alternative financing solutions are available to run, grow, or even save your business.

These asset based lenders and provide :

Non Bank Business Credit Lines

Sale leaseback Solutions

Tax Credit Financing ( SR&ED )

Short Term Working Capital

Purchase Order Financing


Can you avoid business credit nightmares in Canadian banking? We sure think so... consider talking to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success on achieving some of the best business banking and alternative finance solutions in Canada.






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

Business Financing In Canada : Outrunning Your Finance And Banking Needs

Are You On High Seas Navigation For Business Financing With No Road Map ?

OVERVIEW – Information on business financing in Canada. Understanding the critical need for commercial finance and banking solutions that make sense

Business financing in Canada might well have business owners/financial mgrs feeling like they are navigating the high seas... without a roadmap. Not recommended? How then does your company in effect ' outrun'

it’s needs, choosing commercial financing for survival and growth. Let's dig in.

Companies with stable and positive financials look to Cdn. chartered banks for their business needs. When banks can't/won't satisfy those needs other solutions are available- more about those later.

Businesses with SME COMMERCIAL FINANCE needs often face challenges in choosing a bank, a banker; our banks tout convenience and online services, etc but many businesses are unable to meet basic business credit line criteria.

‘Old School ' lending talked about the 4 C's of bank lending - character, capacity, credit, and collateral. While many of our clients have no problem passing' character ' they can't meet issues of collateral, proven cash flow, and credit history.

Enter... stage left...

non bank alternate financing sources! Is there a finance solution to the business line of credit that meets your needs? Those bank lines provide overdraft protection based on personal guarantees and financing against your sales/receivables - typically 90% of A/R value. For businesses with a history of profits and success it's low cost flexible financing.

When your company can't access bank financing top experts tell us that business owners resort to personal loans, collateral mortgages on their homes, equipment leasing, etc. There is one very solid alternative to the bank credit line - it’s the ASSET BASED NON BANK BUSINESS CREDIT LINE... aka the 'ABL' line.

How does the ABL work? In many ways it’s the ' low tech' solution to business credit. It takes your receivables, inventory, and equipment and packages them into one ongoing revolving business line of credit. Somewhat ironically the level of borrowing is actually more generous when it comes to margins on your receivables, inventory and equipment.

Are there some other solid finance solutions we haven’t talked about? One is internally available! Your ability to maximize trade credit from vendors is a valuable source of cash flow. Another solid solution is Equipment Leasing for fixed asset needs.

There is one other ' subset' of the asset based credit line - A/R Factoring. Paperwork around this type of facility allows you to cash flow your receivables at the same time you are generating sales. Our recommended specific solution in this area is CONFIDENTIAL A/R FINANCING... allowing you to achieve all the benefits of factoring while billing , collecting and financing your receivables.

If you're looking for some ' high seas navigation' in Canadian business financing solutions 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 banking and financing needs.



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 FINANCING EXPERTISE



7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

ABOUT THE AUTHOR
Stan has had a successful career with some of the world’s largest and most successful corporations.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.







Stan Prokop

Alternative Finance And Banking: Avoiding Disappointment In Canadian Business Financing

Doing The Right Thing : 6 Ways To Finance Your Company

OVERVIEW – Information on business financing solutions in Canada. Both banking and alternative finance choices can provide your company with the capital it needs . The challenge – doing the right thing!

Business financing in Canada ; what business owner / financial mgr doesn’t want to do the right thing when it comes to a finance plan for their company? If there's any good news these days when it comes to solutions for eliminating finance challenges it's that there is more choices than you might think. Let's look at 6 of them. Let's dig in.

There is of course a broad spectrum of finance services stretching from Canadian chartered banks / credit unions all the way to a whole new breed of alternative financing providers depending on the ' risk profile ' that your company demonstrates. Suffice to say that rates and terms and structures will vary widely, calling for an added element of expertise and investigation by you or your trusted Canadian business financing provider.

We note also that it's a bit rare for a business to only utilize one method of financing the company. Various forms of debt based capital and asset monetization are usually required to address operating and growth. In general debt providers look to some form of equity being in place, but man alternative finance providers do not focus on equity - they look towards assets and cash flow, often making their solutions the only ones available when owner equity is stretched... or missing.

Let’s examine those 6 potential solutions.

Business banking - while banks provide the lowest rates and most attractive terms and structures the criteria they require to access capital may often be out of reach. To access proper chartered bank financing you need a very solid mix of profits, collateral, an appropriate amount of time in business, and owner guarantees that can backstop the financing. While the debate around business banking in Canada addressing your finance needs will continue owners who can meet the basic criteria will enjoy business credit lines and term loans in virtually an unlimited amount.

Asset Based Lenders - these are the new breed of lending in Canada, focusing on collateral such as your equipment, receivables, purchase orders , allowing you to gain access to business credit when your balance sheet or income statement don't ' meet mustard' for the banks

Equipment Leasing - If 80% of North American businesses utilize lease financing to acquire there assets surely they are on to something. The ability to acquire assets and not tie up cash is a key benefit in those lease finance solutions. Even used equipt can be financed.

Govt Small Business Loans - This is a classic recommended solution for many firms - providing bank type rates with non bank lending criteria - including start ups! Loans are guaranteed to the bank by the federal govt and are extremely flexible around repayment, amortization, etc. Recent limit changes are even more exciting! ( They have gone up!)

A/R Financing - Thousands of firms who view their receivables as a key asset employ invoice financing (Our recommended solution in this area is CONFIDENTIAL RECEIVABLE FINANCE) to cash flow their business. It provides unlimited financing possibilities as long as you have growing sales.

Cash Flow Loans - subordinated cash flow loans are a solid form of secondary financing - these loans rank behind your other secured creditors - in effect they are unsecured loans but require a solid demonstration of your ability to generate cash flow repayment .

If you're looking to ' do the right thing ' in your Canadian business financing, banking and alternative finance choices seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can help you avoid disappointment when it comes to capital solutions to run/grow your business.


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 FINANCING 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

Business Financing In Canada. Are You Addressing Banking And Credit Needs Incorrectly?

Business Finance Alternatives – Use As Directed


OVERVIEW – Information on business financing . How does management choose the right credit and banking alternatives that are available




Business financing choices in Canada. To many business owners and financial managers it must seem like they spend a tremendous... aka ' too much' time searching for the credit and banking alternatives they need to run and grow business.

What then are some of those decision points when your business is looking for capital of any type? Let's dig in.

Easy to say, but fundamentally it's all about finding the right financing in the amount that you need that carries an acceptable level of risk and cost. As we said, easier talked about than done.

More often than not it's about taking on the wrong kind, or too much debt and therefore risking business failure.

There are a number of ways in which business finances itself. They include:

Vendor / Supplier credit

Lease Finance

Bank Financing

Asset monetization

New equity

Many business owners often underestimate the power of supplier finance. The terms and credit needs you're able to negotiate contribute greatly to business cash flow. Supplier credit stems the outflows of cash. The bad news here is that everybody's in the same boat at the end of the day, as everyone, including your clients attempt to stretch payment terms.

Instead of paying with cash for equipment and technology assets business can choose to lease those assets on a lease or rental basis. Terms of anywhere from 2-7 years, sometimes longer, are available to leases assets such as rolling stock, computers, heavy equipment, production machinery, etc. Bottom line... any asset can be financed.

Canadian commercial banks offer significant financing choices when your firm seeks business credit. The most desirable bank facility is typically the ' revolver' allowing you to draw daily against the cash you need up to a set limit. The danger of breaking a bank arrangement often leads many businesses into a death spiral.

While in many cases it's desirable to get new equity into your company the challenge here is that it dilutes ownership at the expense of current owners.

Many owners and finance managers who focus on getting new equity don't fully realize that numerous ASSET MONETIZATION strategies exist as an alternative to equity in many cases.

They include-

Receivable financing
Inventory Financing
Tax Credit Financing
Royalty financing
SR&ED Tax credit monetization
Non bank asset based lines of credit
Sale leaseback
Bridge loans

4 or 5 key issues typically should come up in your overall financing decision. They include:

Flexibility of the financial offering
Risk
Cash flow and profit concerns
Control exerted by the lender based on the finance offer
Timing

At certain times in any company’s history it can't always get the financing it needs. Issues such as your overall leverage and your capital structure need to be addressed carefully. Growth, while always desired by almost all firms requires proper assessment of your financing needs.


Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with business credit and banking decisions that make sense today and tomorrow.



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 Business Financing And Credit Banking 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

Avoiding Canadian Business Credit Nightmares. Banking And Bank Loans For Business In Canada

Ready For A Solid Banking Relationship ?


Information on how Canadian business can access credit , banking, and bank loans in Canada




When it comes to Canadian business credit and banking in Canada (loans, credit lines, etc) it's more than a bit unfortunate that many business owners and financial managers view the process and the challenge as somewhat of a nightmare or at the very least a negative process.

Let's examine how you can turnaround that process with a viewpoint towards success. And let's hope we can get rid of some of that negativity also.

Secret # 1 - Choose a banker, not a bank. We don't think there is one important thing we could share on our subject other than that statement. A good (hopefully great) banker will become a great source of financial and business assistance.

So you've made your pick?! Now what? It’s critical that over time you gain the confidence and respect of that person, whether it’s a he or she. This can be achieved in a number of ways. Banks in Canada are focused on ' cash ' and ' cash flow ', so just supplying your banker with reasonable cash flow projections goes a long way to instilling confidence of the bank in your business.

That ' cash plan ' is simply a solid estimate of incoming and outgoing cash needs, with hopefully the bank bridging the gap.

A huge issue in Canadian banking (it’s not huge for the banks, but it sure is huge for our clients) is the whole area of personal guarantees. While the majority, if not all of bank credit in Canada for privately owned corporations mandates a guarantee we would point out that we see numerous cases of flexibility when in fact none seemed apparent.

That flexibility comes in the form of limiting the personal guarantee, or in some cases securing outside assets in lieu of the guarantee. We have seen cases where the bank waived the entire need for a ' PG ' (personal guarantee)... in general this is the exception, not the norm.

A simple summary of the entire PG situation is that assets and your personal credit history and situation will drive the final decision here. As Canada goes through different economic cycles banks seem to be either pulling in the reins or making an all our effort to make personal and business credit available. So it’s important for you to judge where the banks are in the cycle!

One way in which you can maximize the benefits of a solid bank relationship is to continually explore the ability of your banker to introduce you to other professionals that might assist your business. These might include lawyers, accountants, and Canadian business financing advisors.

Those intro's are worth their weight in gold in many cases, as these external advisors have not doubt proved themselves many times before as they established their own relationship with the bank.

What are bankers in Canada looking for when they look to extend Canadian business credit? It's not rocket science - they look for management depth, a solid busines model, what financing you have in place via debt or equity , as well has how you market and price your services or product.

A final note on bank loans in Canada? Unlike the U.S. which has hundreds, even thousands of different banks and even more independent non bank finance firms Canada's banking system is smaller. Clients who are bankable often focus on ' rates ' - in our opinion the rates will vary no more than some basis points from bank to bank.

Your focus should be on the banker, and the structure, terms, and guarantees surrounding your bank loans or credit lines. That saving of a couple basis points will be non existent in your mind when you get locked into a structure or guarantee or ratio and covenant scenario that you can't get out of.

Can you avoid business credit nightmares in Canadian banking? We sure think so... consider talking to a trusted, credible and experienced Canadian business financing advisor on achieving some of the best business banking in Canada.








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/canadian_business_credit_banking_bank_loans_canada.html

Looking To Fund Your Business ? 5 Tips On Start Up & Small Business Finance Companies And Banking In Canada

Strategies for Working Capital and Financing Success

Information on how to fund your new or established business in Canada . Advice for Working with finance companies for loans and banking success for cash flow and working capital needs .



It sometimes seems that when you're bigger things always seem a bit easier - not always but most of the time.

That’s why when you are looking to fund your business and you're a small to medium sized business owner or financial manager knowing which firms and finance companies are appropriate to deal with seems like a challenge. And business banking from a borrowing perspective seems like a huge challenge.


And another thing, if it’s not all the time, it’s sometimes, because at certain points in your company's growth and history you are looking for business funding of some sort. What are the options - who can you turn to? Never fear... real world advice is here!

Business financing to either start or grow your business is available in a variety of ways and solutions. Let's examine 5 key topic areas.

The number 1 solution, as perceived by many business people is banks and commercial credit unions. However, perception is certainly not always reality as many have discovered. However if you are in a position to demonstrate to the bank that your own pockets (i.e. your own money!) is committed to the business then they are certainly a good place to start.

Want to know who we think is the absolute best bank in town? We’re sure you do, and here’s the answer, its one that houses a banker who is committed to grow and understand your business.

One of the best programs offered by the bank is co sponsored by the government, it’s the SBL loan program, providing you with great rates, terms and structures, and even limited personal liability for the financing.

Point # 2 -There isn’t a day when we don’t get a call asking us for some assistance on government grants. There are probably hundreds , if not more , of government grant programs - our own opinion is that they are often difficult to qualify for and at the same time chances of approval on non repayable funds is , suffice to say, slim . We will add though that the SR&ED program is probably the best program in this area, although its not a grant per se. Check it out though if you feel you qualify.

Grant programs are often targeted to very specific cultural or environmental issues , and many come with strings attached, such as matching funds only, etc.

So focus on getting sources of capital to borrow, not give you!

Point # 3- Talk to a Boy Scout. That’s because that organizations motto of ' BE PREPARED ' runs very true in business. Your ability to present yourself, your background, your historical, present and future financials is critical to obtaining business financing from finance companies and banks in Canada. Many clients seem either overwhelmed with how to do this properly, or quite honestly just aren’t qualified. We are all experts inn our own area of expertise, right?

Solid professional assistance from your accountant or Canadian business financing advisor is steps away, and at a nominal cost, all things considered.

Tip # 4- We all know whats in it for us when we borrow funds in a banking or non banking facility. But whats in it for the lender? Never forget that point. Finance companies in Canada are based around risk and reward. Most business owners don’t realize that business financing in Canada is available from a rate of 3% per annum to 3% per month. All types of assets can be financed or monetized. Companies in bankruptcy proceedings can even borrow at low rates. It’s all about the assets, the rate of return, and how you put together your business funding request.

Tip # 5- Always is prepared to deliver on some level of owner equity, i.e. your own contribution into the business. That can be via a cash injection, retained earnings in the business, or assets that aren’t already collateralized.

So, Canadian business financing. It comes in many forms. Receivable financing, equipment finance, working capital cash flow loans, asset based lending, franchise financing, tax credit finance, etc. Speak to a trusted Canadian business financing advisor on how to fund your business, and which finance companies and banking partners are appropriate for you.



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/fund_your_business_finance_companies_banking.html

Canadian ABL Lending - True Success In Banking and An Asset Financing Loan

Are you enjoying life as a commercial borrower in Canada - We can't even imagine some of the answers to that question, although we have certainly heard a lot of the stories! Let's examine why a new breath of fresh air, ABL lending has become a favorite and very unique banking and asset financing strategy in Canada.

One of our favorite expressions these days is that the old ways don’t work anymore. As it relates to today’s subject we're talking of course about commercial banking facilities in Canada, and focusing primarily on firms that have challenges to raise working capital and cash flow facilities that work.

It often comes down to a comparison of the two types of financing, traditional Canadian commercial banking, and our favorite new kid on the block, ABL lending and banking. We use the term new but quite honestly it’s simply a Canadian business financing facility that hasn’t been heard of by many Canadian business owners and financial managers for a variety of reasons. Maybe some people prefer to hide a good thing and keep it secret.

So whats better, a ' regular ' commercial banking facility via a Canadian chartered bank, or ABL lending and financing via a true asset based line of credit? Regular commercial facilities are extremely focused on criteria for mutual success - we say mutual because we hope everyone agrees your firm and the lender both have to win. (By the way, we are on our clients side! in that battle)

Got what it takes for a Canadian commercial banking facility - you know the drill - you need reasonable leverage, no significant events that are negative in nature, covenants that are a combo of income statement and balance sheet based, - example: fixed charge coverage, etc!

But hey, what about ABL banking and asset financing - whats required there. . Are you ready? Just assets!

That’s the appeal of asset based banking and financing - it focuses almost solely on current assets, key categories being of course receivables and inventory. Where our commercial banking friends focus in a dramatically different manner in analyzing and funding your business the ABL focus is simply n asset monitoring, and ensuring you can borrow on a daily basis at the highest of advance rates based on real world values of your assets. Oh, and by the way ' strange events ' are fully allowed - so you have a challenge, an acquisition, a special loan situation, a year of bad luck .. You will still be forgiven by abl lending and banking.

Want to ensure you have maximum availability on borrowing against your assets on a daily basis - speak to a trusted, credible and experienced Canadian business financing advisor about an asset based line of credit that makes perfect sense for your company.

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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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

Turbo Charge Your Banking Via A Business Line Of Credit ABL Revolver !

Small, medium or large? We're not talking about a coffee cup size... we're referring to the fact that no matter what your size of business your access to a business line of credit is the lifeblood of your company . That's why an ABL revolver (ABL = asset based line of credit) is potentially the solution to turbo charge your working capital and cash flow. Let's examine how.


Clients seem to always wrestle with the fact that they don't really understand the differences between this type of business financing and banking as opposed to a ‘regular’ operating facility with the bank. The differences could not be more dramatic. While a bank facility (by the way, we are all for them also, when they work! ) focuses significantly on your balance sheet ratios and over all profitability , etc the ABL revolver solution hones in on one issue only - your assets and their overall quality and size . It is on that quality and size that the ABL business line of credit is structured.

Borrowing power is what business lines of credit are of course about. When you utilize the ABL approach you in effect leverage all the power of the assets, which certainly isn’t like what we like to call ' traditional bank borrowing '.

So, why would a business such as yours want to unlock that borrowing power? The reality is there are some very recurring needs for firms which choose this type of business financing. First of all they either can’t get or can’t get enough working capital borrowing power against their inventory, receivables and equipment. Secondly, all sorts of other problems, challenges, and yes opportunities can e overcome with an asset based line of credit.

Many examples exist of firms who have doubled and in some cases tripled their business financing access via this type of finance. The answer is simple - it’s based on asset size, not ratios and covenants and external collateral.

Those include firms which have large seasonality issues, companies who which to merge with or acquire a competitor on an asset financing basis, and, most commonly, firms that view themselves in turnaround or restructuring mode when it comes to where they are at in their life cycle - i.e. coming out of a challenging economic time or negative business event (operating losses, etc).

Did we just say ' operating losses ‘? Yes, the reality is that even firms who are experience operating losses and could otherwise not achieve maximum operating cash flow are excellent candidates for ABL financing. We should mention that the type of facility you get, the pricing on that facility, and how the facility works vary within ABL revolver financing depending on your overall transaction size and asset coverage .

We must never forget also that these type of facilities never bring debt to your balance sheet, you view them similarly as an operating line, in that you are just monetizing your assets for working capital and cash flow - the only difference is you've got tremendous flexibility around borrowing power - because you are borrowing against a base of receivables, inventory, unencumbered equipment, and in some cases real estate also.

In summary ABL revolver financing gives you a full service business financing, its cost effective, addresses almost every financing problem you have had related to cash flow, and is available in facilities from 250k to many millions of dollars .

It somewhat of a secret to many that some of Canada's largest corporations choose this type of financing over a traditional bank facility. Speak to a trusted, credible, and experienced Canadian business financing advisor on why ' ABL ' give you that ' turbo charge' boost in cash flow we've talked about.

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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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