WELCOME !

Thanks for dropping in for some hopefully great business info and on occasion some hopefully not too sarcastic comments on the state of Business Financing in Canada and what we are doing about it !

In 2004 I founded 7 PARK AVENUE FINANCIAL. At that time I had spent all my working life, at that time - Over 30 years in Commercial credit and lending and Canadian business financing. I believe the commercial lending landscape has drastically changed in Canada. I believe a void exists for business owners and finance managers for companies, large and small who want service, creativity, and alternatives.

Every day we strive to consistently deliver business financing that you feel meets the needs of your business. If you believe as we do that financing solutions and alternatives exist for your firm we want to talk to you. Our purpose is simple: we want to deliver the best business finance solutions for your company.



Showing posts with label debt. Show all posts
Showing posts with label debt. Show all posts

Friday, April 27, 2018

What Mom Didn’t Teach You About Working Capital Business Financing















The Real Scoop on Business Funding in Canada


Information on business financing and working capital and cash flow alternatives in Canada. It's critical to understand your business finance options

If you're like most of us Mom never really gave us a lot of advice on working capital ! That's why for such an important business financing subject we recently wrote on an older article in Canadian Business magazine that covered a total of 15 - yes that’s 15 ways) to finance your business . Perhaps these were the secrets of the Holy Grail that Mom never taught us, we thought?

The reality was that we had some strong comments and additional information on those 15 items, and we commented on 7 of them in the last article. Let's cover off those final items and hopefully get some real value on what Mom never told us about these things!

Under the category of ' government programs' the article talked about various federal and provincial programs or initiatives for business financing. Mentioned was the Community Futures program as well as the Canadian Youth Business Foundation. These are very narrow and segmented programs, in the case of the Youth Foundation, guess what, you have to be a youth, which hardly suits most business owner’s .Community Futures programs have tended to be rural in nature, have ad minimal funding allocated to them, and seem to have focused primarily on start ups that might generate employment.

Secondly, Mezzanine debt was referenced. This is of course essentially an unsecured cash f low loan provided by private finance firms. In many cases it focuses solely on cash flow as the repayment vehicle. The bad news on mezzanine debt is that it typically is available for transactions in excess of 5 Million dollars, which certainly doesn’t work for most small and medium business owner’s .For the record mezzanine financing rates are in the low to mid teens.

Private equity was out third source of capital. Typically these funds are provided by niche Canadian and U.S. private firms who focus on equity and convertible financing instruments that force the business owner to give up partial ownership .This isn't necessarily a bad thing if you get the working capital and business financing that you need, but you should absolutely be prepared to give up some ownership on these transactions, which are often quite substantial and take several months, if not longer, to complete.
Hey, let’s go public and have access to unlimited sources of capital.
That’s the typical pitch made to Canadian corporations who consider this type of financing. The reality is that a true IPO listing on the TSX or Venture exchange in Canada requires a significant capitalization and track record. Ownership becomes diluted, and companies are forced into very strong levels of reporting and disclosure. Many of our clients have ' gone public' via reverse take overs of shell companies that had a listing, we have never seen this work satisfactorily, at least from a viewpoint of giving them unlimited working capital.

The Canadian Business article focused on the federal SRED program. Finally! A good one! An absolutely great program that provides billions of Dollars of capital for any firm in Canada that qualifies for research spending and adheres to the program guidelines. Sred claims can also be financed, similar to a receivable, as soon as they are filed, that supercharges the program even more from a working capital perspective.

VC money is often bandied about and sought by many corporations. Venture capital in Canada is struggling in the 2010 environment, any fundings seem to be going to firms that have been previously funded, and are getting additional capital (to stay alive?). Any Venture capital firm expects a high rate of return relative to the risk they are taking in financing your firm on an equity basis - in fact traditionally , as the article stated, the venture capitalists are looking for a 5 times return . Unfortunately for many Canadian business owners these types of fundings go to the sexier industry segments such as biotechnology, high tech, etc.

Well, that’s it. Hopefully we haven’t sounded too negative, but the general trend clearly are that the ‘ 15 ‘ options outlined in the original C B article clearly need to be grounded in a bit more reality for the average Canadian business owner and financial manager seeking capital . Speak to a trusted, credible and experienced business financing advisor who can provide you with an up to date realistic alternative on business funding.



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



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.









Thursday, November 24, 2016

Sources of Business Capital









Businesses that are growing require sources of capital. The capital in a company of course comes from the owner or borrowed funds. Generally speaking business owners prefer to borrow rather than sell equity in the company, as that sale of equity dilutes the ownership position, i.e. they own less of the pie! New equity can come from friends and family, venture capital firms, and angel investors. These parties are looking for good management, integrity, owner financial stake, and growth potential.

However, in the current difficult financial environment many lenders are in fact insisting that business owners put more of their own money into the company. There is never an easy answer when it comes to the debt or equity question.

When businesses borrow funds there is a cost to that capital - as interest on that debt reduces over-all profits. New equity in the company of course does not reduce those earnings, however the profits are distributed more widely and the earnings are proportionately reduced.

Borrowing funds of course comes with risk, as those loans must be repaid. Business owners sometimes get caught in the trap of financing long term projects with short term money - they are therefore at the mercy of having to always roll over that debt, and potentially also seeing rates go up, sometimes dramatically. Also, a business can carry only so much debt, at which point cash flow becomes a potential problem if the company is over leveraged.

Currently rates are very low for businesses that have access to capital. Therefore in many cases it might make sense to lock into longer term loans in the current attractive rate environment.

When the business owner has made the decision to purse business loans the old Boy Scout model works very well - BE PREPARED !
Business owners that do their homework will usually be successful. Lets not forget the banks and finance firms are actually in business to loan funds. Naturally collateral, or additional collateral certainly improves the chances of debt financing success and loan approval.

Debt and equity financing as a sources of capital should be used for the right reasons - expansion, seasonality of business, increased inventory and working capital that will increase sales. Funds that need to address business inadequacies such as poor management, financial losses, falling sales, etc are very difficult to come by!

In summary, business owners should carefully consider the positive and negative effects of additional debt or equity capital. Once they have made an informed decision, either on their own or with a trusted business advisor they should consider the cost of that capital and how it is best achieved.

Stan Prokop is the owner of 7 Park Avenue Financial. The firm originates business financing for Canadian firms, and is a specialist in business financing.

http://www.7parkavenuefinancial.com/Home_page.html


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 '


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.





Article Source: http://EzineArticles.com/expert/Stan_Prokop/432698