Financing A Business Purchase In Canada . A Buyout Financing Loan .. Done Right !

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Management Buyouts & Latest News for December 2019 You Need to Know on Business Loan To Buy A Business

Financing a business purchase in Canada requires both a strategy doesn't have to be as hard as you think if you have the right information. What sometimes makes buyout financing or a loan strategy complicated is the good news; there are a variety of options available that make sense to you the purchaser, and the owner.



Business people and mangers looking to orchestrate a management buy out or business acquisition wants one thing: A solid simple strategy for both valuation and financing! The goal should be quite clear: agreeing on price and value, and then rising the right mix of debt finance and owner equity capital that suits the asset and capital base of the business going forward.



Of course valuing the business is often the first and largest challenge. That is complicated by the size of the firm, whether it’s a service or an asset / product based business, and whether the firm is a going concern, or heaven forbid, in dire straits.



What should be a good starting point in valuation - no surprise to us, its one of our favorite terms - ' CASH FLOW '! That means taking a look at what cash flow has been, and what it could be. That requires a solid handle on revenues and a proper forecast for those sales.



Asset valuation is a good step # 2. That naturally involves some method of appraisal of asset types such as equipment, real estate if there is any attached to the sale , vehicles, and those all important ' current assets ' , Receivables and Inventory .



We often find ourselves in the middle of a valuation issue when assisting clients with a business purchase - suffice to say there is an occasionally a huge difference in value as placed by the owner or the purchaser. We're often reminded of the old saying that best deal is often when both the purchaser and the seller both feel they didn’t get the best deal!



Taking a good hard look at how the seller presents financial statements is key to financing a business purchase successfully. Here's where the majority of clients we speak to need some good experienced assistance. Areas of focus are:



Collectability of receivables

Revenue recognition policy on sales, contracts etc

Lease obligations - (premises/equipment)

Fixed asset list value

One time losses i.e. why/what happened

Owner/management compensation



With reference to the last point, ' COMPENSATION' we see numerous cases where a hard look at current compensation can save thousands of dollars to the new owner/manager. And that includes the strategy of taking the previous owners kids and family members off the payroll!



If we had to summarize an all inclusive strategy in looking at the business financials we would say it involves simply a solid hard look at:



Debt

Liquidity

Profits

Assets



Easier said than done though, right? But a lot easier with some experienced assistance for an advisor, etc.

Useful Tools For Acquisition Financing

When it comes to actually financing the purchase this can be through bank term loans, asset based lending deals, unsecured cash flow loans, and even for smaller business purchases (under 350k) the Govt SBL loan.



Speak to a trusted, credible and experienced Canadian business financing advisor on assistance for financing a business purchase and a buyout financing loan / finance strategy... that works!







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 area 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.
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

Secrets To Buyout Financing In Canada. The Scoop On Acquisition Finance Firms

Interested In Buying A Business?

OVERVIEW – Information on successful buyout financing in Canada. What strategies should you employ with acquisition finance firms to successfully complete your deal?





Searching for Buyout Financing in Canada? Along the way you'll need info and assistance from acquisition finance firms or other institutions such as banks. Is there some proven information and strategies the Canadian business owner or financial manager must use to be successful in acquiring or merging with another firm. There are of course, so let's dig in.

On many occasions we see that clients haven’t spent enough time on the overall ' financial nature ' of the business. By that in essence we mean an overview of the operating cycle of the business. The operating cycle? It's simply your ability to get a handle on the overall sales and seasonality cycle, the supplier and customer base, timing on how goods and services are delivered and the current overall financial structure of the business.

New funding that you require running the business must be part of the overall financial considerations. Even more simply speaking than that the lender or lenders want to know how they will be repaid. To demonstrate that you need a strong, clear sales and profit and cash flow projection that might well be part of your business plan or strong executive summary.

The ability to demonstrate how your new and existing debt will re repaid which is done by demonstrating that your new balance sheet has the right amount of debt and that you've got borrowing power.

Borrowing power is of course based on the assets of the new business - which typically is receivables, inventory, and fixed assets. Receivables when financed by a bank are typically margined at 75% borrowing power, and if you utilize an asset based lender your borrowing power typically increases to 90%. Inventory and fixed asset financing is determined by careful valuation of overall marketability of the assets based on the opinion of the bank or your asset based lender.

Other focuses of acquisition finance firms for buyout financing include management depth and experience, overall cash flow coverage and repayment ability, collateral asset quality, and the potential ability to grow sales and profits. No real mystery there!

Buyout financing works best when you have a solid handle on what's known as the capital structure of the new business. The easy way to focus on this is to have a strong sense of what capital is available from you the new owner, traditional of alternative lenders, and your suppliers/vendors. Using vendors as an example, just your ability to negotiate extended payment terms for an interim or permanent period is going to be a great source of cash flow.

Getting the right mix of short term and long term debt is also key. In a perfect world you want to have the right amount of debt, aka ' leverage’. A great rule of thumb? Simply that your overall cash flow can comfortably cover off your debt payments and that overall debt doesnt exceed your shareholder equity by a relationship of 2:1.

For companies in the SME sector we'll often see the overall capital structure is different than that of larger corporations - i.e. current assets and liability per cent ages tend to be higher - allowing you to monetize assets for cash flow and working capital as opposed to relying on shareholder equity, which is often much higher in larger firms.

Companies in the SME sector in Canada don't often have all the resources that the ' big boys ' have when it comes to buyout financing. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with acquisition finance.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS BUYOUT 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 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 :


BUYOUT FINANCING AND ACQUISITION FINANCE FIRMS







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

Financing A Business Purchase In Canada . A Buyout Financing Loan .. Done Right !

Canadian Business Financing – Management Buy Out Finance Info


Information on financing a business purchase in Canada . Buyout financing strategies and info for a management buyout loan or a business acquisition.



Financing a business purchase in Canada requires a strategy that doesn't have to be as hard as you think if you have the right information. What sometimes makes buyout financing or a loan strategy complicated is the good news; there are a variety of options available that make sense to you the purchaser, and the owner.

Business people and managers looking to orchestrate a management buy out or business acquisition want one thing: A solid simple strategy for both valuation and financing! The goal should be quite clear: agreeing on price and value, and then raising the right mix of debt finance and owner equity capital that suits the asset and capital base of the business going forward.

Of course valuing the business is often the first and largest challenge. That is complicated by the size of the firm, whether it’s a service or an asset / product based business, and whether the firm is a going concern, or heaven forbid, in dire straits.

What should be a good starting point in valuation - no surprise to us, its one of our favorite terms - ' CASH FLOW '! That means taking a look at what cash flow has been, and what it could be. That requires a solid handle on revenues and a proper forecast for those sales.

Asset valuation is a good step # 2. That naturally involves some method of appraisal of asset types such as equipment, real estate if there is any attached to the sale , vehicles, and those all important ' current assets ' , Receivables and Inventory .

We often find ourselves in the middle of a valuation issue when assisting clients with a business purchase - suffice to say there is an occasionally a huge difference in value as placed by the owner or the purchaser. We're often reminded of the old saying that best deal is often when both the purchaser and the seller both feel they didn’t get the best deal!

Taking a good hard look at how the seller presents financial statements is key to financing a business purchase successfully. Here's where the majority of clients we speak to need some good experienced assistance. Areas of focus are:

Collectability of receivables

Revenue recognition policy on sales, contracts etc

Lease obligations - (premises/equipment)

Fixed asset list value

One time losses i.e. why/what happened

Owner/management compensation


With reference to the last point, ' COMPENSATION' we see numerous cases where a hard look at current compensation can save thousands of dollars to the new owner/manager. And that includes the strategy of taking the previous owners kids and family members off the payroll!

If we had to summarize an all inclusive strategy in looking at the business financials we would say it involves simply a solid hard look at:

Debt
Liquidity
Profits
Assets

Easier said than done though, right? But a lot easier with some experienced assistance for an advisor, etc.

When it comes to actually financing the purchase this can be through bank term loans, asset based lending deals, unsecured cash flow loans, and even for smaller business purchases (under 350k) the Govt SBL loan.

Speak to a trusted, credible and experienced Canadian business financing advisor on assistance for financing a business purchase and a buyout financing loan / finance strategy... that works!

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS PURCHASE / MGMT. BUYOUT 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/financing_business_purchase_buyout_financing_loan.html