Business Loan Alternatives : Eliminating the Curiosity Gap On Alternative Sources Of Financing in Canada

What Scares You About Alternative Financing ?


OVERVIEW – Information on alternative sources of financing in Canada . Business loan finance can be achieved via a variety of different methods of asset monetization. The non bank alternative is gaining in popularity in Canada and here is why

Alternative sources of financing in Canada
seems to sometimes conjure up images of the unknown to Canadian business owners/financial managers. Is there anything to really be afraid of when considering this method of business loan finance? Hardly. Let's dig in.


The ongoing struggle for businesses in the small and mid market size to secure financing for their firms is leaving many more options to explore these days. It's the rise of alternate forms of financing as benchmarked to traditional Canadian chartered bank financing.

One kind of hybrid example is always worth exploring - it’s alternative finance but offered by the banks. We're referring to the Govt guaranteed business loan program, which offers term loans to borrowers who otherwise cannot access a loan based on bank traditional criteria. Well worth examining.

Alternative lenders are essentially commercial finance firms that are not funded like our banks, i.e. deposits. They are therefore ' unregulated' and operate under their own risk and lending models. More often than not these firms specialize in offering financing for certain specific types of loans or working capital solutions.

Here is a list of various forms of alternate finance:

A/R Receivable Financing

Inventory Finance

SR&ED Tax Credit Financing

Working Capital Loans

Equipment financing - Sale leaseback

Non bank Asset based business lines of credit

Sales/Royalty financing

Purchase Order Financing


All of the above solutions offer tremendous flexibility in how funding can be derived. Naturally that flexibility will almost always come with higher finance costs Because lending standards are less restrictive than the banks it allows your firm to access the finance it needs.

Really the best way to look at these forms of financing is to consider the fact that they are heavily ' asset ' based, and much lighter on things such as covenants and other restrictions. Traditional lending has almost always focused on pure cash flow generation.

For firms that had bank financing but suddenly find themselves in some form of distress or business challenge the alternative finance vehicle is a tremendous way to refinance your business when a work out with the bank cannot be established.

One key factor to assess when you’re e considering business loan finance of an alternate nature is to ensure you understand any reporting requirements. Essentially that reporting becomes the ' communication vehicle ' between yourself and the lender. In many cases that reporting can also work positively in that in can help identify additional or other types of financing you might need. Being ' self aware ‘in your overall financial condition is important, and a disciplined reporting system helps that cause.

In summary , ensure you are ' self aware ' of your businesses overall financial health , and if you're looking to explore alternative sources of 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 in eliminating the curiosity gap in choices .


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 ALTERNATIVE 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

Scared Of Business Loan Finance? Eliminate Fear Of The Unknown In Your Financing And Loans.. .. And Oh Yes.. About Those Personal Guarantees

Accelerating Business Loan Approvals In Canada


OVERVIEW – Information on business loan finance in Canada. Financing Loans from traditional and alternative sources should not create uncertainty for the business owner.



We've all heard of the expression ' fear of the unknown ‘... and when it comes to talking to clients about business loan finance, commercial banking, and the financing of the right loans and financial vehicles for their business that phrase seems somehow ... quite appropriate .

So why does the Canadian business manager, if not fear, have a healthy amount of trepidation around what's required in a financing request ... scratch that... a SUCCESSFUL financing request . Let's examine some basics, including the ever feared and despised personal guarantee!

The majority of businesses in Canada in the small and medium enterprise sector generally are required to have all significant owners of the business personally guarantee financing. Larger more established corporations and public companies in general are omitted from that requirement.

Naturally the putting up of personal assets as a guarantee for a business loan or other type of financing weighs heavily on the business owner. And hey ... didn't we incorporate our company just to avoid this and other liabilities?!

Is there any consolation we can provide the business owner on this somewhat testy issue? One is of course that, not known to all, personal guarantees are somewhat negotiable. In certain cases where the lender wants your business bad enough, from a credit quality perspective the PG can be waived in its entirety.

Oh, and by the way, you could also spend the time seeking out (or speak to a trusted, credible and experienced Canadian business financing advisor) finance firms that place little or no emphasis on the guarantee of the owners from a personal perspective. Furthermore, and we don't mean to sound flip, but what in fact are you worried about if you have the business assets and confidence in your business around this issue of default and personal liability .

A final point on the guarantees of owners - they can be modified by negotiation in many creative manners, i.e. limited guarantees, guarantees subject to certain valuations, etc.

Are there other key elements of any financing proposal or business loan request that can make or break your success in Canadian business financing. Other key areas you should carefully address are the ability to demonstrate and provide:

Background of your company and management experience

Up to date financials - by the way that includes balance sheets that balance

Aged lists of receivables and payables

Business bank statements - (lenders like to see the in's and outs!)

Business plan - if applicable

Can we forgive the Canadian business owner/finance manager for viewing the Canadian business financing landscape as a minefield?

Yes we can, for all of the reasons we've talked about and more.

But with the right financing advice and information you can eliminate a huge amount of the ' fear ' that comes with access to the proper financing of your business. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist your with your business loan finance concerns.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS LOAN FINANCING 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/business_loan_finance_financing_loans.html