The Business Credit Line Loan In Canada : Commercial Loans More Easily Understood

Are Your Highly Fuzzy On Business Credit Lines In Canada ?

OVERVIEW – Information on the business credit line loan in Canada . Commercial loans and revolving credit facilities come in all shapes and sizes, and they are offered by many entities the business owner/manager may not have considered








Getting a business credit line loan in Canada can often make the business owner / financial manager in Canada feel somewhat ' highly fuzzy ‘. It's easy to understand as commercial loans in Canada, specifically revolving credit facilities come in different shapes and sizes! Let's dig in.

A credit line is needed for most businesses as it relates to ' operating cycles' - Those cycles are driven by seasonality, the level of current assets in a business ( inventory and receivables ) and the overall timing as it relates to inflows and outflows in a business.

While many business owners are somewhat purposely unfamiliar with Page 3 of their financial statement (the ' statement of cash flows ‘) this is perhaps the most telling document about their business. It's a classic case of what we old school types call ' where got/ where gone '!

So why do commercial loans for a credit facility make sense for a business. Two words basically - GROW / OPERATE...

The natural ' go to ' for most owners, entrepreneurs, financial managers is our Canadian chartered banks as it relates to a business credit line loan. The criteria for approval are simple - but sometimes simply hard to achieve. They include profits, positive cash flows, and overall financial performance of your business as it relates to the balance sheet. By the way, that relates to the owner/owners balance sheets also as banks place emphasis on outside collateral and personal credit worthiness of ownership of the firm.

The credit line at a bank will almost always have a limit, and it becomes the responsibility of owners/managers to ensure the continual drawing down and repayment of the loan is handled in a satisfactory manner.

In some cases a bank might even consider converting a part of the credit line into a term loan .

One strong alternative (What? There are Alternatives?!) to that bank facility is a non bank asset based line of credit. These facilities allow your business to borrow, under one roof, funds against a combination of A/R, inventory and equipment. And while bank credit lines are rigid and reviewed typically annually the Asset credit facility can easily fluctuate according to your needs and sales growth.

It is always important for the company to use these types of loans judiciously. They should almost never be used to purchase assets or make longer term investments in the business. That’s a classic mismatch of the intended use.

In Canada there are what we have called ' sub sets ' of a credit line - These are niche borrowing facilities specifically tailored to your firms or industries specific needs.

They include:

Inventory financing

Factoring/ Confidential Receivable Financing

Purchase Order/ Supply Chain finance

SR&ED tax credit monetization

Royalty financing

Sizes of borrowing will always vary specifically to a firm's needs and actual finance charges will depend on whether your firm has chosen a traditional or alternative financial source.

If achieving business credit lines that make sense for your firm is at the top of your ' TO DO ' list 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 short term borrowing 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 90 Million $ of financing for Canadian corporations . Info /Contact :


7 Park Avenue Financial = CANADIAN BUSINESS CREDIT LINE LOAN EXPERTISE



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 :






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

Commercial Loans In Canada Don’t Need To Be Imaginary : Loan Financing And Asset Monetization Done Right

Don’t Be ‘ Out Of Control ‘ When It Comes To Canadian Business Financing

OVERVIEW – Information on the timing and access of commercial loans in Canada. Loan financing and asset monetization depending on knowledge of sources of capital and understanding and being able to assess your company’s present and future financial health




Commercial loans and loan financing / asset monetization sometimes seems like an imaginary concept for Canadian business owners and financial managers.

Feeling ' out of control ' in the area of understanding what finance is required for your business is a dangerous risk. While it is a challenge to understand where your company is going financially the challenge increases exponentially when it comes to assessing the following:

What will your company look like from a financial perspective?

What types of debt can your firm take on and how will it be paid back - certain businesses need more assets than others, and its that ' CAPEX' requirement re owned or financed equipment that is crucial in asset intensive industries. A high amount of debt in any company enhances financial risk and financial distress.

Assets you need in the long term are typically financed through term loans and lease financing- while day to day cash flow/working capital comes out of daily operational performance, Short term financing comes from:

Canadian chartered bank facilities
Non bank asset based lines of credit
Inventory/ AR financing programs (we consistently recommend Confidential Receivable Financing)


Is cash flow sufficient to handle your growth plans, and is future growth going to be similar to historical growth ( Knowing your sales profit and cash flow potential, as well as your ability to manage working capital and assets gives the owner/manager a strong handle on managing future financial performance)

What is your business really worth?

Naturally proper financial statements and projections go a long way towards being successful in accessing commercial financing. You are also in a position to avoid surprises such as cash crunches and bulges in sales and cash flow needs. Owner/manager financial ability often comes down to managing current assets such as inventory and receivables.

The worst case scenario often occurs when commercial loans and financing are required on an ' urgent ' basis - at that point it’s knowing your sources of capital, what they cost, how they work, and how they are structured. At this point your ability have a strong handle on your financial health is key.

Many clients we meet often underestimate the time it takes to get proper loan financing in place. That easily leads to that ' out of control ' feeling we have mentioned. Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can take you from ' imaginary'

to ' reality' when it comes to loan financing and asset monetization in Canada .







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 Commercial Loan 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

Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing with the intelligent use of experience






Stan Prokop































Stan Prokop

Business Loans In Canada. Here’s Some Intelligence For Commercial Loans Approvals

Want An ‘ Out Of The Box ‘ Path To Business Loan Success In Canada?


OVERVIEW – Information on successfully securing business loans in Canada. What are the ingredients to successful commercial loans approvals



Business loans in Canada , unfortunately, don’t come in an ' out of the box ' path to instant approval. So lets explore some real world ' market intelligence' around commercial loans in Canada. Let's dig in.

The reality around preparing for a business loan financing involves considering who the submission is for. In some cases it might be for a bank, in other cases a commercial finance firm. The far end of the spectrum of a private equity or VC type financing definitely requires a business plan. However, that’s ' equity '... and we’re talking debt!

So a key point out of the gate is to focus business loan submissions around cash flow and repayment. We'll let our VC/Private equity friends worry about the economy, your industry, market potential, etc... we're focusing on getting approved for a business loan and repayment.

So if we had to emphasize the key points around business loan success in Canada they would categorically be:

Quality of collateral
The ability to meet ratios and covenants that might be required
Cash flow analysis -historical and future
Personal financial info/credit of the business owners

When it comes to business loans from banks it's important for the business owner/financial manager to understand that ' branch banking' isn’t really what it used to be! That's because the majority, if not all business credit decisions are made by underwriters at head office. That's why it's critical to get a strong recommendation on your submission from your branch banker.

There's an old joke that goes as follows: ' It's technically impossible to give a banker too much information '. We're not sure we agree 100% with that, but it's pretty close we would say, so your ability to answer 'negative issues' and ' questions' with quality financial and business information is key.

Loans are always going to be repaid from cash flow, so if you're not bringing new or more personal equity into your company be prepared to demonstrate the cash flows and collateral quality of your financials.

If you’re applying for a Govt SBL loan through your bank the challenge for this type of commercial loan is very straightforward. You need to simply understand the very clear criteria around this program and fulfill the application needs with that info. Those criteria are fundamental - a business plan, personal credit info, cash flow forecast, a premises lease, and business owner info/experience.

There's not ' out of the box' instant solution for business loans in Canada. But some homework and common sense will go far. Seek out and speak to a trusted , credible and experienced Canadian business financing advisor with a track record of Success ; providing you with that business loan intelligence you need.



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 Loan 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

Phone = 905 829 2653


Email = sprokop@7parkavenuefinancial.com























Stan Prokop

Business Finance Options In Canada . How To Assess Commercial Loan And Financing Alternatives In Canada

Making These Mistakes When It Comes To Financing Alternatives?

OVERVIEW – Information on business finance options . What commercial loans or asset monetization strategies work, or don’t work in Canada



Business finance options in Canada. How does the Canadian business owner and financial manger assess commercial loans and other needs for growth and survival? What are the alternatives when it comes to business financing? Let's dig in.

More often than not it always comes down to those two words ' cash flow'. While everyone accepts the importance of that term sometimes it's difficult for the owner/manager to assess the importance as they are wrestling with growing revenues or profit issues.


So how does the business owner ensure that the right type of financing is in place? While traditional bank commercial loans are often perceived as the ' go to ‘in reality all types of business financing, both traditional and alternative can address your needs. Oh and by the way, you don't need to take on more debt all the time, sometimes it’s a case of managing or monetizing your existing assets.

Simple better asset turnover in accounts such as inventory and receivables significantly enhance cash flow. And just using the right financing for the right need makes your firm a better cash flow and working capital manager.

Take the replenishment of assets such as equipment as an example. Using lease financing as an options can provide a multitude of positives around replacing assets to enhance your operations and competitiveness. Using effective lease strategies to their maximum allows you to grow your business. Some of those very basic tools include the effective use of operating leases, matching the term of the lease to cash flows and useful life expectancy of the asset, etc.

While the ' go to' for asset acquisition in Canada is leasing almost 80% of the time as experts tell us, business owners in the SME sector can also acquire equipment via the Government small business loan . It offers big guy corporate benefits to the little guy, and that’s a rare thing in the Canadian business landscape. For example, under this program terms of 5-7 years are available, personal guarantees are limited to 25%, and there is no charge to repay the loan early. Sometimes even the big guys can't negotiate that one!

Many business owners in the Canadian business landscape, certainly in the SME (small to medium enterprise) sector are unfortunately not known for their planning skills. As a result they are not always proactive in addressing financing needs until a crisis. Other challenges they have include the inability to understand what options are in fact available - therefore they spend hours, days, weeks and months chasing financing options that are never meant to be.

Many business owners, again we're talking about the SME sector often do a poor job of separating their personal financial life from their business life. Issues such as business credit cards or using home equity lines to finance their business can backfire in a big way. We encourage owners, whenever possible, to separate business and personal finances. After all, isn’t that one of the main reasons you incorporated anyway?

Business finance options in Canada include:

Receivable financing
Inventory Finance
Supply Chain/ PO financing
Working Capital term loans
Unsecured cash flow loans
Canadian chartered bank term loans and operating lines of Credit
Equipment financing/bridge loans
SR&ED Tax credit financing
Specialized franchise loans


Which one or what combinations of these are right for your firm? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist your in assessing alternatives that make sense for your business.




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 = Business Finance Options Expertise









Have A Question Or 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
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com


















Stan Prokop