Panic At The Disco! Business Capital Finance Options To The Rescue
OVERVIEW – Information on expansion financing options in Canada . Business capital funding comes from the right mix of new debt, financing existing assets, or the expensive alternative – sale of ownership
Business capital funding and expansion financing raises many questions for Canadian business owners and financial managers. The whole challenge of funding your business sometimes creates that ' Panic at the Disco ' feeling. Let's examine solutions and strategies. Let's dig in.
The need for expansion financing should be raising some specific questions for owners/mgrs. These include how much funding is needed to grow the business, and, as importantly, at what rate of growth. In some cases your company might be focused on buying another firm /competitor.
The other larger question that looms involves whether you are prepared to borrow, monetize existing assets, or actually sell some equity in your business - equity being the most expensive form of capital.
That equity comes from existing owners, friends and family, and external sources such as going public. Many firms in the SME area look at avenues such as capital pools and reverse takeovers of shell companies - often having disastrous consequences if not properly thought out/planned. And of course debt is acceptable - if it's at the right rate/terms and level.
It's always interesting to watch companies go through their different stages, from start... to growth and then the ' mature' stage where capital needs are less to none. Oh to be ' mature'!
There is a strong alternative for growth expansion that should always be looked at - Asset collateralization. This raises internal funds via existing assets.
Solutions in this area include:
Asset based lines of credit
Bridge Loans via existing collateral - these are often structured as ' interest only ' payments
SR&ED Tax credit financing
Sale Leaseback
Royalty Finance
Receivables factoring
Those larger ' mature' companies we talked about look at ' cash flow coverage' as to how they manage and take on new debt. Their ability to have cash flow to cover the debt gives them ' investment grade' or ' non investment grade ' coverage. While private companies are rarely rated in this manner it's time well spend to cover cash flow forecasts.
The Bottom line:
Understand your business cash flow prospects
Understand the types of debt you're willing and able to take on
Always consider the downside/worst case
Focus on a right mix of debt, equity, or asset monetization
Avoid our ' panic at the disco ‘analogy. 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 capital expansion financing needs.
Stan Prokop
7 Park Avenue Financial :
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 EXPANSION FINANCING & FUNDING 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
