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BUSINESS FUNDING IN CANADA & BUSINESS FINANCING SOURCES

Business financing solutions in Canada clearly demonstrate that the types of loan and cash flow financing you need are clearly not equal in value and accessibility to business owners and financial managers. There are numerous types of business financing. Here's why, so let's dig in!

Any company borrowing for funds for business money will usually encounter some difficulty in taking on debt, and when there is an economic downturn, pandemics included! Whether it's financing startups or mature companies, those challenges to source business capital can be even more overwhelming.

In challenging times the ability to source debt capital is very challenging and time-consuming and the ability to work with an external business financing advisor is often recommended unless of course you and your own team are exceptionally qualified and have the management time to source capital.



Capital Funding will usually mean a combination of financing for day to day operations as well as long term finance needs. That final capital structure will be a combination of debt and equity, with lenders expecting a return on their capital and owners hoping to achieve a proper return on investment - ' ROI '.


Funding a business and acquiring assets for your business, whether that be equipment, buildings, rolling stock, and investments in technology - ie computers, software, etc typically should be acquired through proper debt instruments such as loans, leases, mortgages, etc. Matching the useful economic life of these assets to the proper finance solution is the goal! The amount of debt you take on to acquire these assets will force a dilution effect on the owners equity in the business - again pointing out the need for the right amount ... and type... of debt.


Banks and commercial funding companies in Canada are the two foremost sources of business capital and typically provide the basic financing needs you require to run... and grow the business. Financing costs are of course an expense and lower the overall pre-tax profit of your business - no secret there.

Business owners and financial managers should always be testing the cost of their debt in order to allow the company to move forward with the right goals around its costs of borrowing and return to shareholders/owners.

Many industries are very 'capital intensive ' and require a much larger amount of capital as compared to service industries, so depending on your industry, as well as what ' stage of growth ' your company is in will be the key drivers around types of short term and long term finance.

The ability to diversify your finance solutions is often recommended by experts; that might be at the start-up stage or in times of high growth. When business challenges occur that diversification allows you to consider ALTERNATIVE SOURCES OF FINANCING. In recent years many new finance solutions in alternative financing compete aggressively with traditional financing via Canadian chartered banks. It is safe to say that any type of financing, either traditional or alternative has different benefits and disadvantages that must be weighted by owners.

What Are The Best Financing Options For A Business

Many different types of business finance solutions exist - the challenge revolves around your ability to ensure you're pursuing the right type of loan or cash flow financing solution.

At 7 Park Avenue Financial many firms we work with are in the ' startup funding ' stage; new business funding for owners who have committed some of their personal capital and are looking for additional financing to start/bootstrap the business. Entrepreneurs consider every source of capital, even tapping that ' friends and family ' and ' Angel ' investors. Some consider the venture capital route which is very time consuming and expensive and typically not appropriate for the majority of startups. Those ' VC ' type deals seem most common in the technology/software area/biotech area. Often a large amount of equity must be given up by founders to receive substantial financing.

Occasionally government grants and government VC capital might be available. Companies going the VC route will have considerable pressure to quickly get to a hyper-growth stage allowing investors to recoup their investment via some sort of exit strategy.

One other source of business capital for more traditional businesses, including franchises, is the Government of Canada Small Business Loan program, providing up to $ 1,000,000 of debt for three specific categories of assets: Equipment, Leaseholds, and Real Estate.

Many business owners/entrepreneurs aren't familiar with the Canadian govt small business loan program. We can call it the ' bread and butter ' in terms of the phrase ' government loans'. Clarification is required here because it's not the gov't that actually funds the loans, it's Canadian banks with the loan guarantee in place from the federal gov't.


For Canadian business owners, timing is pretty well ... everything! That’s why with careful preparation of your submission a loan can be approved in a matter of days



Getting back to our theme of ' timing is everything ' an even more accessible solution for owners/mgrs is the working capital term loan. Often provided on an ' unsecured ' basis these loans are based primarily on the cash flow within your business bank account. There is a lot less paperwork required and funding can occur within days.



Many businesses, particularly in the SME sector (small to medium enterprise) require purchase order funding solutions when they receive orders and contracts far in excess of their normal financing capabilities. P O Financing allows companies to access new markets and larger customers, enhancing revenue growth.

Most times even international orders of almost any magnitude can be financed if your firm has a qualified buyer and a legitimate supplier. Because of that most firms also require a business credit line, in some cases called an ' ABL ' line. These revolving facilities are provided by traditional financiers such as banks, and, somewhat unknown to most, commercial finance companies often referred to as 'asset-based lenders '.



What information is required in order to assess your firm’s qualifications under most types of financing? It's not as complex as it might seem. Traditional applications often include just financial statements, but can also be augmented by a business plan or cash flow forecast. Canadian banks are typically the first ' go to ' for many business owners, and a lot of time can be spent on finding a bank, and banker, that can meet your specific needs.

Borrowers find out very quickly that banks are looking for well-performing firms that have sales, assets, clean balance sheets, and profits. Those attributes, combined with a solid BUSINESS PLAN and cash flow projection will typically lead to financing success with a bank. Canada's crown corporation non-bricks and mortar bank for entrepreneurs will also provide solid financing solutions.

In certain cases your firm might be a solid candidate for cash flow loans, often called 'mezzanine finance; with the loan secured solely by those predictable cash flows you must be able to demonstrate. These loans are often viewed as the interim bridge between debt and equity.

Both working capital term loans, as well as short term cash flow loans, are very popular in current times. Any company showing good growth is a candidate for a cash flow loan either traditional in nature, or of the type offered by a multitude of short term working capital lenders. The latter type of loan is typically a one year loan and is based on a simple formula of 15-20% of your annual sales. With these loans rates are higher as lenders are looking for higher rates of return given the loans are not collateralized.



In all cases you should be prepared to demonstrate the type of collateral that requires financing (which might include just your sales), mgmt experience, and a solid understanding of how business loans or cash flow facilities will be repaid or revolve.

We have demonstrated there are numerous sources of funding for businesses. Careful time and consideration must be given to the type of financing your business needs - different costs and risks are associated with every type of financing.


So yes, it’s true, not all business financing solutions are equal when it comes to benefits or qualifications. Seek out speak to a trusted, credible and experienced Canadian business financing advisor to determine your exact needs and potential solutions.


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

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



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. He is an experienced

business financing consultant

.

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 financing 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.


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







Stan Prokop
7 Park Avenue Financial/Copyright/2020

Business Financing Capital Funding Solutions In Canada

Business Loans For Debt Refinance And Business Refinancing

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Back To Basics In Company Restructuring For Cash Flow

Business refinancing .. its a fact that business loans and debt refinance via commercial loans must be reexamined to ensure new or better financing is in the best interests of your current business position.

WHY COMPANIES CONSIDER BUSINESS DEBT RESTRUCTURE ?

Your company might be considering a reorganization of its debt obligations via corporate refinancing ; in some cases that might mean totally or partially replacing debt or other times a full restructuring of the business. Naturally the main reason to consider such an effort is to improve the overall financial position and capital structure of the company.

It might mean a better overall interest rate and cost of funds. Rates have consistently dropped and remain low so companies doing well can certainly benefit from the low rate environment in loan refinancing.


Leveraging the owned assets in your business can also provide significant collateral liquidity . This can be accomplished by a sale leaseback process for both fixed assets and real estate. Those funds can be used to pay down debt or put back into the company for projects around marketing and research and development. Business owners should be reminded that investments in r&d capital tax credits can be financed for working capital under a SR&ED Tax credit loan. Refinancing a premise you own via a commercial mortgage refinance is a classic business refinancing strategy, notwithstanding the fact these assets are often held in a related company .


In other cases it might be ' credit driven ' - allowing you to consider other more flexible financing options. Suffice to say that in many cases these days, pandemics included, it's a case of fixing the business that might be exhibiting some sort of distress. The ability to complete a loan refinancing successfully typically will deliver more cash and working capital to the business for daily operations and long term success.

While it is not always about ' the rate ' when it comes to the refinancing of debt it is safe to say that firms doing better do have the options of a refinance strategy that will allow a lower cost of funds. That typically can lead to more growth opportunities when restructured loans are well thought out and executed properly.

Naturally, most refinancing of loan opportunities also have different costs attached to the process, and it's important to consider those. Those refinancing costs might include the fees of business advisors, lawyers, and accountants, that ultimate business triumvirate! In certain cases, certainly when including real estate in the mix up to date appraisals might be required, as well as early prepayment penalties being considered.

TIMING IS EVERYTHING IN CORPORATE RESTRUCTURING

At 7 Park Avenue Financial our experience in working on restructuring and refinancing transactions has taught us that one ' cost ' of refinancing is the amount of time and management involvement in working through the whole process. It is certainly not unusual for a positive restructure to take at least a few months that might include the preparation of business plans, cash flow forecasts, lender negotiations, due dilgence, and on it goes!



KEY POINT?  Allow time for the process of restructuring Loans



The greatest cost of corporate debt restructuring is the time, effort, and money spent negotiating the terms with creditors, banks, vendors, and authorities. The process can take several months and entail multiple meetings.


As we have noted, it's not always ' doom and gloom ' in the refinance process. Companies doing well might be facing strong growth challenges, or in some cases addressing seasonal or one time large orders and contracts. In many situations, a company can avoid taking on long term debt in the financing of large orders and contracts by considering purchase order financing and A/R financing solutions. Leverage sales via those latter two solutions avoid costly and time consuming refinance, so the ability to proactively analyze your needs carefully is key .

An examination of your financials with the help of your accountant or advisor should be able to pinpoint the right solution, and here cash flow forecasting is key.




Certain external events might also lead to a refinance process - that could be an owner equity infusion or perhaps a large receipt of funds from, for example, a customer. An owner equity infusion, as we have referenced above has the effect of improving debt to worth ratios and making other refinancing more possible. The ability to combine loans or extend terms can have a very positive effect on cash flow.




While we have discussed many of the positive aspects of a business refinance there are numerous circumstances that may have placed a company in some level of distress. A formal or informal organization might be required, if only for the sake of keeping a company in business. It's at this time that careful thought and time must be given to negotiating with banks and other secured creditors.

The focus now becomes reducing debt, achieving an interest rate and cost of funds that a company can live with, and ensuring terms match the long term prospects of the company. Although rare in some cases certain creditors may be persuaded to forgive debt or take some sort of ownership or warrant position in the business. The ability to save a company from any sort of formal bankruptcy or receivership becomes the total focus of management and their advisor.

PREPARING THE TURNAROUND REFINANCING PLAN


Various problems precipitate a turnaround requirement, falling sales and negative cash flows and losses are near the top of the list. Therefore being able to pinpoint the key sources of the need for restructuring is critical. As you and your mgmt and advisor put forth the right turnaround it's essential to be able to provide key documents to interested or vested parties.

Key parts of your package should include:

Mgmt analysis of the problem/solution

Historical and interim financial statements

Cash flow forecast/business plan

Details on secured creditors/collateral held

Aged Payables / Receivables

Personal financials of shareholders/owners

Having that type of package in place allows your restructuring to be viewed positively from a viewpoint of being prepared.

In certain cases your firm might be in the Special Loans section of your banks restructuring unit ; working with a bank through a forbearance agreement when your demand loan is called will often require the expertise of an experienced Canadian business financing advisor.




Changes will always occur in your business and owners and financial mgrs must evaluate the cash flow and debt position of the company.

So what some of those reasons that loans are refinanced, or new financing structure is brought into the company? In some cases certain gains in the value of assets of the business allow owners to take out equity, or in some cases totally ' cash out '. Current management might be focusing on a management buyout or some form of succession planning might be taking place when you redo or consolidate loans.

Interest rates play a key factor in business refinancing - in a perfect world rates might have declined and allowed your business to refinance under better terms. In other circumstances loans are refinanced to either reflect a more positive cash flow - or more often than not new credit lines are required to reflect the growing need for working capital due to higher sales, larger contracts, etc.

In many cases merger and acquisition opportunities arise. Here loans are combined, and new financing structures might be introduced to reflect positive financial statements for the combined business.

Currently there is large popularity around short term working capital loans, allowing companies to generate immediate cash needs without taking on the burden of significant long term debt. Lease financing is often restructured to reflect the useful life of assets, which can either depreciate or appreciate based on the nature of the asset.

On occasion the actual business owners may wish to address personal guarantees that are in place around current debt guaranteed by the business owner.

If there is a bottom line on a company's ability to refinance business loans it's simply that each industry and company has different financing needs, and those needs change over time. That covers the gamut from financing distress to high growth.

IS REFINANCING REALLY THE SOLUTION ?

In numerous instances a simple amendment to existing debt might be a logical and simpler solution; augmented by additional cash flow financing via solutions such as non-bank asset based lines of credit, short term working capital loans, including easy cash flow solutions such as accounts receivable financing, factoring, etc. At 7 Park Avenue Financial our most recommended solution in this area is Confidential Receivable Financing , allowing you to bill and collect your own receivables and turn them into instant same day cash.



A detailed analysis of your company's overall financing structure will often point to the need to refinance. Those all important loan covenants or guarantees need to be reviewed to ensure proper refinancing action can be taken.

We can therefore say that refinancing or restructuring debt in some cases can be viewed as an opportunity, so speak to a trusted, credible and experienced Canadian business financing advisor with a track record of success.





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






Stan Prokop
7 Park Avenue Financial/Copyright/2020

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The best business loans and Canadian business financing options for business owners and financial managers aren't always the obvious ones when it comes to achieving capital needs for your company. If there is any good news in today's highly competitive business environment it is that funding options and a loan alternative are available for everything from startups, growing businesses, as well as financially challenged firms.

Why Is The Use Of Alternative Finance Growing In Canada

Three reasons by alternative lending is booming in Canada :

1.Credit Restrictions from Canadian Chartered Banks

2.Demand for Funding That Is More quickly Accessible and attuned to industry needs

3.Increased Knowledge Around Benefits of Alternative Finance - Studies show that Canadian business borrowing in the past was somewhat skeptical about dealing with non ' bricks and mortar ' financial institutions, but that is changing quickly.

In fact industry statistics from organizations such as the IVEY SCHOOL OF BUSINESS/UNIVERSITY OF WESTERN ONTARIO advise that 867 Million dollars of alternative capital were borrowed via non bank lenders for figures available just a few years ago.


Constant changes in the economy, ( pandemics included !) make it difficult for companies to access the business capital they need. Mainstream financing via Canadian banks etc is not always available when you need it, and alternative methods of financing and the ability to get a commercial loan in canada have almost become an imperative for business owners and their financial managers to inspect.


It is no secret that many industries have unique financing requirements, and even within industries, no company might have the same needs - hence our focus on ... options!

So what in fact drives the need for financing? It typically comes down to the longer-term goals of your company, the size of your business, and the overall 'risk rating' that both traditional and alternative lenders use to provide their capital to your company.

KEY POINT - When it comes to SME COMMERCIAL FINANCE options at 7 Park Avenue Financial e strongly recommend that business owners separate their business and personal credit. Although traditional banking does, in fact, focus on the reflection of your personal credit history as a measure of how you will handle business affairs it is still appropriate to have commercial lenders draw on credit info from business credit bureaus such as Dun and Bradstreet - building business credit and being able to demonstrate proper financials and a business plan and cash flow projections goes a long way to business financing success.


Business owners typically gravitate to term loans - it's a common form of loan that at its basics requires you to make monthly payments over a pre-determined period - typically 2-5 years. These days many clients we speak to are looking for short term working capital loans, typically covering temporary shortfalls or unique situations. These loans are very popular, readily available, and even more good news, quick to close, often in a matter of a week or two.

Those short term working capital loans and financing loans compete directly these days with traditional banks, who of course have better rates but harder approval criteria. Often no hard collateral is required, just the 'promise' of the business and business owner to pay. Typically these loans are for 10-20 percent of your annual sales volume, as a guideline to keep in mind.

Government guaranteed start-up loans are also popular. The government is committed to billions of dollars in these loans every year in Canada. Repayment is long, and covers 3 assets you can finance - equipment, leaseholds, and even real estate! The downside - those great rates and terms and flexibility come with an application process that can be cumbersome if you don't have the expertise of an experienced Canadian business financing advisor.

Businesses run day to day on credit lines, typically secured by receivables and inventory. Asset based lenders provide non-bank lines that offer generous borrowing margins.

Other Alternative business financing and immediate sources of business funding include:

Short Term Working Capital Loan ( Also called 'MCA's or Merchant Advances )

These loans are usually very quickly available with the main criteria for approval focusing on your years in business and loan amounts geared to your annual sales, typically in the 15-20% range. The personal credit history of the owner/owners is also a data point considered for funding. Loan repayments are typically spread out over a year and are often customized to your cash flow receipts from cash and business receivables. Interest rates are higher but flexibility and quick access to capital is the key benefit . Those are often the key benefits to any alternative lending solution .

Receivable Financing

A/R financing is a mainstay of alternative business financing. Financing is based on a high percentage of your receivables, typically 90% which is significantly higher than Canadian bank receivable margining policies. Rather than an ' interest rate ' per se commercial receivable finance funders charge a fee, typically in the 1.5- 2% range.

Firms with good gross margins who can easily absorb a 1-2% reduction in their profit margins can find themselves virtually becoming an automatic cash machine as they generate cash at the same time they create and grow sales revenues. It is generally improper to compare this type of financing to a bank business loan as the interest rates and fees are not a ' apples to apples ' comparison.

Receivable financing facilities can be stand-alone, or combined with other financing, such as an asset based line of credit that allows you to borrow under one facility based solely on your assets and sales. At 7 Park Avenue Financial we recommend that is a sole stand alone facility is used a CONFIDENTIAL RECEIVABLE FINANCING solution be implemented, allowing you to bill and collect your own receivables while reaping all the benefits of a/r financing/factoring.This financing is not a working capital loan that brings debt to the balance sheets, it's simply a monetization of your current assets.

Note that you can even finance a business purchase with an asset based loan.



Purchase Order funding / ABL Asset Based Lines Of Credit - These credit line and sales financing solutions are focused on business sales revenues and current and fixed assets. Much less reliance is placed on balance sheet ratios, covenants, outside collateral, personal guarantees, etc, often demanded by more traditional lending institutions.




Equipment Leasing / Equipment Loans / Sale leasebacks


Equipment loans and lease financing solutions are utilized by the majority of North American businesses to acquire both new and used assets. Business owners are sometimes surprised that used assets can also be financed, as long as they are acquired from another business or distributor, not via a ' private sale '. Business borrowing via Sale leasebacks can generate working capital for assets your firm owns outright, including real estate.

Equipment lease approvals are based on your ability to meet the monthly payment with respect to your cash flow, as well as being able to demonstrate the asset financed is a benefit to your business. The asset/equipment is of course the main collateral for the le assets. It is often recommended that you discuss with your accountant the lease vs. buy and the lease vs. loan business financing decision.


Government Of Canada Small Business Loan Program - Small Business Loans Canada

Although a mainstay of traditional banking many business borrowers are not familiar with the program and have a challenge in locating a banker who will work with them on this government-guaranteed loan. The formal name for the program is the Canada Small Business Financing Program
and allows small businesses, including startups to get 'traditional bank loans ' based on a guarantee the federal government, via INDUSTRY CANADA, provides to the banks.

Loans are up to $1,000,000.00 which is hardly ' small ' and over the last decade over 60,000 loans have been made under the program. Any new or established businesses under 10 Million in revenue can apply. AT 7 Park Avenue Financial we work with clients to ensure a speedy approval without missteps typically associated with bank borrowing - so we work with clients on a business plan, cash flow, company history, management overview, etc.

That business plan and other info help assure a speedy response and approval. Business owners borrowing under the program must have a decent credit score in the 650 range per Canadian credit bureaus such as Equifax.

It is very important to note that these ' SBL ' loans ' can only be used for equipment and leasehold interests and real estate. Unlike the U.S. counterpart in the U.S. it is only focused on those 3 asset categories and can't be used for cash flow, working capital, r&d, inventory, etc. Loans to buy a business in Canada are often utilized under the Govt SBL program.

Many franchise financing needs work very well in this program. As well rates are comparable with Canadian bank interest rates and terms vary from 2-5 years. A business start up loan is often the best way to utilize the program.


Statistics show that more and more Canadian business owners are understanding the various business finance options available to them. As opposed to taking to numerous commercial lenders it makes more sense to talk to a proper business advisor around types of financing, costs, and conditions. Canadian business has been somewhat slow to adopt alternative financing compared to ur U.S. counterparts but for those willing to investigate options there are numerous opportunities to finance your growth and operating needs.



Similar to bank loans for businesses and other mainstream financing alternative funding sources all have their benefits and potential drawbacks if not accessed properly, and for the right reasons - so investigate the options that best suit your firm's immediate needs. Seek out and speak to a trusted, credible, and experienced Canadian business financing advisor with a track record of success.





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

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



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. He is an experienced

business financing consultant

.

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 financing 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.

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



Stan Prokop
7 Park Avenue Financial/Copyright/2020
































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

Click Here For 7 PARK AVENUE FINANCIAL website !



7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



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. He is an experienced

business financing consultant

.

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 financing 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.

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



Stan Prokop
7 Park Avenue Financial/Copyright/2020

Access Business Loans Via These Alternative Business Financing Solutions

Business Loans Canada : Finance Via Alternative Financing & Traditional Funding

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Financing A Business In Canada

Business loans and finance for a business just may have gotten good again? The pursuit of credit and funding of cash flow solutions for your business often seems like an eternal challenge, even in the best of times, let alone any industry or economic crisis. Let's dig in.



Since the 2008 financial crisis there's been a lot of change in finance options from lenders for corporate loans. Canadian business owners and financial managers have excess from everything from peer-to-peer company loans, varied alternative finance solutions, as well of course as the traditional financing offered by Canadian chartered banks.

Those online business loans referenced above are popular and arose out of the merchant cash advance programs in the United States. Loans are based on a percentage of your annual sales, typically in the 15-20% range. The loans are certainly expensive but are viewed as easy to obtain by many small businesses, including retailers who sell on a cash or credit card basis.



Depending on your firm's circumstances and your ability to truly understand the different choices available to firms searching for SME COMMERCIAL FINANCE options. Those small to medium-sized companies ( the definition of ' small business ' certainly varies as to what is small - often defined as businesses with less than 500 employees ! )

Business Loans Alternative Financing In Canada

How then do we create our road map for external financing techniques and solutions? A simpler way to look at it is to categorize these different financing options under:



Debt / Loans



Asset Based Financing



Alternative Hybrid type solutions



Many top experts maintain that the alternative financing solutions currently available to your firm, in fact are on par with Canadian chartered bank financing when it comes to a full spectrum of funding. The alternative lender is typically a private commercial finance company with a niche in one of the various asset finance areas



If there is one significant trend that's ' sticking ‘it’s Asset Based Finance. The ability of firms to obtain funding via assets such as accounts receivable, inventory and fixed assets with no major emphasis on balance sheet structure and profits and cash flow ( those three elements drive bank financing approval in no small measure ) is the key to success in ABL ( Asset Based Lending ).



Factoring, aka ' Receivable Finance ' is the other huge driver in trade finance in Canada. In some cases, it's the only way for firms to be able to sell and finance clients in other geographies/countries.



The rise of ' online finance ' also can't be diminished. Whether it's accessing ' crowdfunding' or sourcing working capital term loans, the technological pace continues at what seems a feverish pace. One only has to read a business daily such as the Globe & Mail or Financial Post to understand the challenge of small businesses accessing business capital.



Business owners/financial mgrs often find their company at a ' turning point ' in their history - that time when financing is needed or opportunities and risks can't be taken. While putting or getting new equity in the business is often impossible, the reality is that the majority of businesses with SME commercial finance needs aren't, shall we say, ' suited' to this type of funding and capital raising. Business loan interest rates vary with non-traditional financing but offer more flexibility and ease of access to capital.

Business Loan Program Canada

We're also the first to remind clients that they should not forget govt solutions in business capital. Two of the best programs are the GovernmentSmall Business Loan Canada (maximum availability = $ 1,000,000.00) as well as the SR&ED program which allows business owners to recapture R&D capital costs. Sred credits can also be financed once they are filed.



Those latter two finance alternatives are often very well suited to business start up loans. We should not forget that asset finance, often called ' ABL ' by those Bay Street guys, can even be used as a loan to buy a business.



If you're looking to get the right balance of liquidity and risk coupled with the flexibility to grow your business seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success who can assist you with your funding needs.




7 Park Avenue Financial :
South Sheridan Executive Centre
2910 South Sheridan Way
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 more than 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.
Before 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 Companies For Lines Of Credit & Loans

Business Financing Loan Programs That Make Sense

Business financing choices for medium-sized companies and small business credit term loans or a line of credit often seem like huge hurdles when it comes to funding accessibility for owners/financial more. It's all about ' working capital when it comes to funding, and business owners will often lament the lack of choices in funding and capital solutions. Our thoughts? In fact, you probably have more choices today than you ever did for your cash needs! Let's dig in.


Is there ever a time when a company doesn’t need funds. Whether it's acquiring new assets, considering expansion into new markets or products, or simply paying daily operating expenses there’s always a need for financing solutions.


There is always a business loan requirement! At 7 Park Avenue Financial we will often recommend and prepare a business plan for our clients as a key part of any financing strategy.

Your timeframe of reference is critical to assessing and acquiring your financing solutions. Typical timeframes are of course ' short term' for daily needs such as a line of credit, or ' long term ' as it relates to capital assets or investments in R&D. In the long term, you might be considering simply refinancing your current business is funded - that perpetual mix of owner equity and debt - and the right combination of those two.



In the middle, there are often' bridge loan' needs for a variety of circumstances. These solutions can fill the gap that comes from the dynamic changes in your business.



From a small business perspective, many firms are in start-up or early stages, The Govt of Canada has one of the best programs that thousands of firms utilize every year. This loan is now up to $1,000,000.00 in loan cap, provides a govt guarantee to your bank for 90% of your loan, and comes with great rates and flexibility that even some more traditional forms of financing can't deliver on, i.e. any penalty pre-payment, longer terms, etc.



As we've stated, there is a ' new normal ' in Canadian business financing. That new normal includes the rise of numerous alternative finance solutions. Those combined with traditional bank financing offer a large slate of funding solutions.

So How Do Business Loans Work In Canada?

Looking for a simple list of business financing solutions available to your firm? Here they are! The Canadian ' SME ' sector has access to traditional and alternative finance solutions for small business financing as well as larger firms.

What are the best financing options for a business?

A/R Financing/ Invoice Factoring/ Confidential Receivable Financing



Inventory Loans



Bank credit lines



Nonbank asset-based revolving credit lines



Govt Guaranteed Business Loans - This is The Small Business Administration Program Of Canada ( This Program Is excellent for start up funding for small business ) This program is the best example of ' government financing ' and is used by thousands of companies every year. The program is also excellent whereas grants for small businesses may be cumbersome and difficult to obtain from a timing perspective.



Tax Credit Financing (SR&ED / FILM)



P O / Contract Financing



Equipment Financing



Unsecured cash flow loans/ Mezzanine financing



Franchise Loans



Sale Leasebacks



Royalty Financing



Working Capital Loan / Merchant Cash Advance - These viable short term loans arose out of the use of credit cards by business owners.



Many financing solutions identified here can also be combined with ' BDC Funding '. All of our referenced business finance sources are not ' equity financing ' and don't dilute owner equity. The road to venture capital and private equity financing is a long and arduous one and most companies are not ready for that journey.

Whatever financing program or strategy you employ interest rates will vary depending on whether your loan or asset monetization will cost will vary.

Documentation and your firm's ability to provide the basics such as financial statements, owner background, etc. are keys to a good financing package. Let's not forget a realistic cash flow budget also.

This broad range of financing solutions allows your firm to grow, hire people, and become key players in their industry. Looking at a number of solutions will allow you to identify business loan requirements and which finance solutions might work together.

To implement any financial solution you need to understand where your ' financing gap' is and which solutions will work when it comes to either taking on debt or simply monetizing your assets to the maximum, while still employing prudent leverage.

Are you aware of all your financing choices? If not seek out and speak to a trusted, credible, and experienced Canadian business financing advisor who can assist you with your loan and line of credit needs.




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

Types Of Business Credit Lines In Canada

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What Is A Business Credit Line ? What Type Is Best For My Company

Business Loans and Lines Of Credit - Revolving Line Of Credit

Business credit lines in Canada can come from different sources, 2 major sources in fact . Both of these sources are different on how they deliver your cash flow needs, their cost, and how they work on a day to day basis as you run and grow your company in good times, and less than good times!

Understanding those issues helps the business owner his/her financial manager to plot a ' key to success' strategy that helps ensure business growth and survival.

How To Get A Business Line Of Credit In Canada

A true business line of credit is offered by our Canadian chartered banks as well as what are known as 'nonbank' commercial lenders. These non bank lenders, often called asset-based lenders ( A B L ) operate outside banking regulations and are privately owned . Both solutions offer revolving facilities, except that the asset-based lines of credit are more focused on the actual assets in your business.

It is important to understand that typically your revolving line of credit is ultimately tied to your sales. As you sell your products and services you generate collectible receivables ( hopefully ), as well as turning inventory if your company sells a product vs. a service. Typical bank facilities focus on account receivable and sometimes have an inventory component tied to the borrowing formula. ( That formula by the way is known as a ' borrowing base ', which is an important concept to understand in business credit lines . Out of this borrowing base is what you will draw down on an ongoing basis your firms cash flow needs.

Asset based lenders focus and lend more against your assets, and in turn they tend to monitor your a/r and inventories more closely - as those two assets are typically the prime collateral for your asset-based loan.



KEY POINT - Asset based lines of credit, the nonbank type of facility, also can easily put your owned fixed assets into the borrowing formula. This total focus on ' assets ' great increases your borrowing power when combined with a/r and inventories.

Bank Line Of Credit Vs. Asset Based Credit Lines

While banks do require some ongoing reporting on your assets, typically monthly, sometimes only annually, they instead focus substantially on your operating characteristics of profit, cash flow, debt load, and character and personal collateral of owners.

Banks do finance inventories but are often challenged by the ability to both understand and monitor inventories - while asset lenders have developed experience in numerous industries and inventory types. Borrowing conditions for inventories depend heavily on the type of inventory and it's overall liquidation ability - as an example perishable foods are often hard to finance.

Business Credit Line Rates & Cost

What's my rate? That's the ongoing battle cry of business owners and financial mgrs when they consider line of credit needs and benchmark the offerings of their bank or asset-based lender. While your borrowing capacity can often double or triple in asset-based revolving facilities they do come at a higher cost.

Conventional bank financing is cheaper, but more challenging when it comes to the amount of approval, or whether your firm is bank financeable at all ! An interesting note is that in recent times, due in part to general competitiveness and the low rate environment asset loans have in fact dropped in overall cost.


Startup, fast-growing, as well as financially challenged companies are prime candidates for asset based lines of credit. They have limited or challenged cash flow generation performance, but require rapid access to cash flow and working capital. The conservative financial position as demanded by banks focuses on ratios, cash flow, debt to equity relationships, and owner guarantees.


It's important to note that many, shall we call them ' subsets’, of asset based loans can help deliver liquidity to your business.

Other Working Capital / Cash Flow Alternatives

Factoring/Confidential A/R financing

Inventory loans

Bridge loans

Sale-leaseback strategies

Purchase Order Financing

SR&ED Cash flow loans

Short Term Working Capital Loans ( Note - while these short term working capital loans are popular and positioned as business revolving credit lines they are in fact just short term loans based on 15-20% of your sales volume and are tied to personal credit history of the owner/owners


If you're focused on ' keys to success ' in your working capital and cash flow needs seek out a trusted, credible and experienced Canadian business financing advisor with a track record of business finance success , who can assist you with your business finance needs.

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