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Mapping Out The New World Of Business Financing In Canada
Information on newer corporate financing alternatives in Canada. Does the new order of working capital and cash flow funding solutions suit your business?
Corporate financing in Canada often assumes that owners and financial mgrs of companies are somewhat ' bullish ' on sales and profit growth. But where do those working capital and cash flow funding solutions come from? Now that's a challenge. Let's dig in.
The reality is that small, medium, and even to some extent large corporations in Canada is demanding more access to working capital and cash flow financing - yet the typical ' go to ' place where these firms look to, Canadian banks are in fact somewhat cautious about small and medium sized financing of enterprises such as yours. And don’t get us going on startups!
What are then some of those needs as they relate to growing your company with the right financing? It might be a bulge request for a temporary increase in their borrowing facilities, or sometimes a more permanent facility in the form of a term loan that might be tied to equipment, cash flow needs, etc.
Various statistics are available which validate the difficulty that business owners have in obtaining working capital financing. Most of the needs seem to be short term based. In Canada unsecured working capital loans are available from the governments crown corporation bank, and, alternatively, through private independent financing firms. As the transaction tends to be a bit larger in size these loans tend to be called subordinated debt, or mezzanine type loans.
When a business is significantly smaller and can't support the requirements of a more traditional lenders Canadian business owners have actually turned to credit cards and personal equity loans to finance their business. This works, but comes at a higher cost, including the higher risk that comes with combining your business and personal finances.
Are there other solutions available to address working capital needs in Canada? One of the solutions you might consider is a working capital facility, also known as an asset based line of credit. ‘ABL ' facilities are available through specialty firms and advisors, generally bringing significantly increases in cash flow and working capital while at the same time not bringing on extra debt to your balance sheet.
Companies can unlock working capital in a number of ways, one of which is to simply maximize the efficiencies via current asset turnover.
Many clients we talk to don't fully realize that they can unlock working capital that is in effect hidden on their balance sheets -
Translation? Turn your receivables and inventory over at optimal levels. These additional cash flows through current asset mgmt can help you avoid taking on more debt and allow you to grow sales and profits at the same time.
Corporate financing strategies for firms in the SME sector include:
A/R Financing/factoring/invoice discounting / Confidential Receivable Finance
Inventory Loans
Tax Credit Loans
Sale Leasebacks
Equipment financing/bridge loans
Purchase Order Financing
In summary, working capital and corporate financing solutions are in demand by Canadian business. Unfortunately supply is not always fulfilling demand!
Traditional solutions via Canadian chartered banks may not be available to your firm, and in some cases your firm might simply not qualify for the standard metrics around this type of loan / financing.
Speak to a trusted, credible and experienced advisor who can suggest alternative solutions that deliver on cash flow and avoid additional debt. That's a great corporate financing and business plan strategy every owner/mgr should consider!
Stan Prokop - founder of 7 Park Avenue Financial –
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess of 100 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 & Contact Details :
http://www.7parkavenuefinancial.com
7 Park Avenue Financia
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Direct Line = 416 319 5769
Office = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
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
