Successful Business Funding Via Loans & Finance Options You Can Access Today !

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YOUR COMPANY IS LOOKING FOR CANADIAN BUSINESS LOANS AND WORKING CAPITAL FINANCING! 

COMMERCIAL LENDING SOLUTIONS  & FINANCING OPTIONS YOU CAN ACCESS TODAY

You've arrived at the right address! Welcome to 7 Park Avenue Financial 

        Financing & Cash flow are the biggest issues facing business today

                              ARE YOU UNAWARE OR   DISSATISFIED WITH YOUR CURRENT BUSINESS FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

 

 HOW FINANCING & FUNDING CHOICES PROPEL BUSINESS FORWARD FOR GROWTH AND SUCCESS

 

Business Loans & Finance Options: Funding & Financing Businesses In Canada

 

 

Business loans and financing for their company must surely make some owners/financial managers feel like there is some 'conspiracy theory' out there relative to their ability to successfully access finance options and small business loans &  funding solutions.

 

Our point of view? That doesn't have to be the case for small businesses in Canada, so when it comes to ' how to get a business loan ' and raising capital.. let's dig in!

 

INTRODUCTION

 

Business owners know that financial resources can be the driving force propelling your company's expansion and prosperity. External funding can't be overstated in the pursuit of your objectives. This article delves into distinctive financing alternatives that cater specifically to Canadian businesses, each presenting its unique benefits and pathways to acquiring the capital you need to run and grow a business and meet business expenses with relative confidence.

 

 

By the way, small businesses aren't as small as you think - for infomatiion on what Canada's government considers  ' small ' click here for that info.

 

Understanding your business's overall cash and capital needs is often the root issue in small business financing  - how to finance outstanding accounts receivable and inventory via suitable commercial loans.

 

Those are the key drivers of any working capital loan need. 

 

 

A HOLY GRAIL OF SUCCESSFUL BUSINESS FINANCING?

 

The 'holy grail' of financing and funding your business? Growing your business, reducing inventories and turning them faster, and increasing receivable collections.

 

Cash flowing your accounts receivable either via more efficient methods of collection or selling your receivables as you generate them (invoice discounting or factoring) is the most optimal way to generate working capital financing.

 

Naturally, the challenge in doing all that is to ensure you can still maintain your projected sales and profit growth!

 

If your company always has a significant inventory investment, you can obtain direct loans in Canada against that inventory. Traditionally, bank financing via bank loans is the route much larger and established businesses take when they require working capital for inventory purchases.

However, when your firm can't qualify for the full extent of financing that you need from a bank loan, then a direct inventory working capital loan is best. It's as essential to understand that you have options as alternatives to bank loans for small businesses.

 

 

  

TRADITIONAL FINANCING / BANK FINANCING  

 

Bank loans have traditionally been a primary funding source for small and medium-sized businesses (SMEs) in Canada.

 

These loans offer several advantages, such as allowing ownership via financing that is non-dilutive, attractive interest rates, and tax-deductible interest payments. However, getting approved for a bank loan can be difficult for some business owners, particularly those lacking a solid business plan or credit history. Enhancing your prospects of getting a desirable bank loan involves careful preparation, including maintaining current financial statements.

 

 

THE TREMENDOUS RISE OF ASSET-BASED LENDING SOLUTIONS  IN CANADA 

 

When conventional bank financing loan solutions are hard to secure, alternative financing methods can offer a solution. A/R Financing and short-term workings capital loans are notable among these options, delivering rapid approval.

 

While alternative finance solutions may involve higher charges and interest rates, they can provide a crucial financial boost for companies wrestling with cash flow troubles or navigating slow business phases, seasonality and business cyclicality challenges.

 

Because asset-based loans focus on your assets versus cash flow or profit-based lending rules, the rise of ' ABL ' has been tremendous in Canada when businesses need to retrench and sometimes restructure.

 

Using your sales  ( via accounts receivable )and assets as loan collateral appeals to many business owners when they are challenged regarding access to business capital. The form of financing is the ultimate in maximizing liquidity, allowing them to recover, even during pandemic/covid times !.. and focus on the re-growth of their company via the benefits of alternative lending compared to potentially inaccessible solutions from traditional financial institutions.

 

Our recommended working capital loan does not add debt to your balance sheet.  The business owner's ability to manage the balance of debt and equity is key to long-term success. While business loan rates are higher in alternative finance, they provide all the capital you need to succeed  if you have the following: 

 

 

Assets

Sales Revenues

 

It's a facility which margins your receivables and inventory to proper market valuations. This generates the additional cash flow and working capital you are looking for and, as significantly, doesn't add debt to the balance sheet.  Companies that can't access any or all of the operating cash need these 'Asset-based Non-Bank Lines Of Credit' - the golden solution for finance for entrepreneurs.

 

The best way to generate your working capital loan for your firm is to improve collections and delay supplier payments. The latter must be done carefully to avoid mismanaging vital supplier relationships.

 

However, it's every man and woman for themselves when it comes to business financing, so you should focus on negotiating the best payment terms with valued suppliers who usually extend solid payment terms when they see you as a viable and long-term customer.

 

  

GOVERNMENT FUNDING   

 

The Canadian government provides numerous financial support mechanisms to aid businesses in diverse sectors. Specific grant programs and tax relief initiatives are designed for different purposes.

A  benefit of government grants is the absence of repayment or equity relinquishment requirements, which strengthens your business reputation and improves possibilities for subsequent funding.

Moreover, the Canada Small Business Financing Program assists businesses in procuring loans from financial establishments through government risk-sharing loans with banks. Canada's largest

Business owners should also investigate Canada's SR&ED Program - which provides business capital for research and development.

 

 

 

GOVERNMENT SMALL BUSINESS LOANS

 

Some business folks, particularly start-up and earlier-stage companies (including franchises), should check out the Canadian Government Small Business Loan Program, which has the federal government guaranteeing the central part of your loan.

 

It's a great solution when a business borrows money for the business needs of early-stage companies in Canada. If you need a startup business loan, this option is a solid solution versus a traditional bank loan.

 

  

THE SHORT RECAP ON GOVERNMENT LOANS : 

 

Attractive  rates

Nominal personal guarantees

The loan can be paid back at any time without penalty

Fluid structures and repayments re terms, etc.

 

It's no secret that thousands of new and emerging private companies successfully access this program every year - it's also solid financing to buy a business in Canada for smaller acquisitions or franchises.

 

Financing a business is one of the most important things a company needs to succeed, but not all startups or early-stage firms have the option to work with traditional banks. That's why small business financing options that replace traditional bank solutions work!

 

The downside to the Government loan program is that many businesses are not seeking the asset or leasehold financing the Government ' SBL ' loan program provides. They're looking for cash flow and working capital sources as a commercial loan solution at a reasonable interest rate.

 

Startup business loans extensively use the ' SBL LOAN' in Canada. New business loans in traditional banking heavily emphasize the owner's personal net worth and credit score.

 

The credit history of small business owners is always key when applying for traditional financing. Unsecured business loans don't collateralize specific assets but are guaranteed to lenders through personal guarantees and blanket security agreements.

 

Believe it or not, working capital loans are available from what people consider traditional sources. One of the Crown Corporations within the Canadian government focuses very significantly on cash working capital loans. These loans are structured as term loans, not as a business line of credit, and have fairly competitive rates and repayment terms of 5 to 6 years. They are also unsecured, which means they rank behind any senior lender or security you might have in place.

 

A business plan is both recommended and almost always required for the govt ' SBL business loan '  - Business plans prepared by 7 Park Avenue Financial are focused on conservative financial projections and are laser-focused on loan approval.

 

Businesses often consider ' government loans' cumbersome and challenging to apply for - At 7 Park Avenue Financial; we're here to guide you through those programs and ensure you are working with the right financial institution.

 

The only commitment to repay is the company's guarantee as a promise to pay and a full or partial guarantee by the owners personally. We point out that the majority of business loans and financing in Canada does in effect, require some level of guarantees from the owner and a generally positive personal financial history of the owner(s).

 

To apply for a business loan is often daunting and time-consuming for business owners - let the 7 Park Avenue Financial team walk you through the loan process - we also prepare, when required, business plans that are focused on funding approval based on conservative and realistic financial projections and strong business and industry overviews.

 

UPDATE!

 

Significant changes came to the program in 2022 -  Types of financing available under the program were enhanced, and loan limits increased! 

Here is an updated recap of the program

The Canada Small Business Financing Regulations and Act were updated on July 4, 2022. These changes provide businesses and lenders with enhanced financing options, lower administrative burdens, and improved loan conditions. The program is now much closer to the U.S. equivalent under the U.S. Small Business Administration -

Here are the key amendments:

 

1. Increased loan amounts: Borrowing limit increased from $1 million to $1.15 million, including:

   • $1 million for term loans, a max of $500,000 for equipment and leasehold improvements (up from $350,000), and $150,000 for intangible assets and working capital.
   • Additional $150,000 for lines of credit for working capital.

2. New financing classes: Term loans can now finance intangible assets and working capital costs.

3. Extended loan terms: Loans for property, leasehold improvements, equipment, intangible assets, and working capital payments can be made for up to a term of 15 years.

4. Expanded eligible expenditures: The time frame to finance expenditures or commitments increased from 180 days to 365 days.

5. Adjusted appraisal timing: Appraisal timing has changed from 180 days before loan approval to 365 days before loan disbursement.

6. More extended registration period: Term loans can be registered within six months from the date of the first loan disbursement.

7. Updated security requirements: Lenders must take security in any assets of the small business for leasehold improvement, software, website, intangible assets, and working capital costs.

8. Simplified default process: Upon default, lenders only need to demand repayment, not provide a notice of default.

9. Adjusted claim documentation requirements: Documentation supporting cost and proof of payment reduced from 100% to 75% of the principal amount outstanding on the loan.

10. Line of credit introduction: Lines of credit for working capital costs can be made, with maximum term of 5 years.

11. Line of credit renewal options: Renew the line of credit for a new 5-year period, convert to a term loan, or repay with a conventional loan.

12. Updated line of credit security: Lenders must take security in any small business assets for the authorized amount of the line of credit.

13. Line of credit default process: Similar to term loans, lenders only need to demand repayment upon default.

14. Line of credit claim process: Lenders are not required to substantiate the cost and proof of payment for expenditures on the line of credit.

 

The program can also be used to purchase an existing business/franchise.

 

These changes are designed to improve the financing landscape for Canadian businesses, providing them with greater access to capital and increased flexibility in managing their financial needs.

 

 

 

EQUIPMENT FINANCING

 

If your business is looking to procure crucial machinery or equipment, or technology, equipment financing can be an excellent strategy. By distributing expenses over the lifespan of the assets, this form of financing helps to minimize the impact of substantial initial investments, thereby allowing entrepreneurs to reserve capital for other business-related necessities.

 

Whether the requirement is for updating assets or upgrading technology, or obtaining rolling stock, equipment financing allows businesses to maintain competitiveness and stimulate expansion.

 

For more information from 7 Park Avenue Financial equipment financing solutions, please  click HERE

 

  

 

CONCLUSION :

 

In Canada, entrepreneurs have various financing options, including traditional bank loans, alternative financing, equipment financing, government loans and grants.

Each option addresses different business needs. To obtain the necessary capital for growth and prosperity, Canadian businesses must carefully assess the advantages and drawbacks of each method and plan accordingly. 

 

Talk to the 7 Park Avenue Financial team about choosing the right financing option to realize your business ambitions and secure prosperous growth financing.

 

Bottom Line? Whether you are starting a business or already established and focused on high growth and those options from angel investors/family and friends have dried up, and venture capital funding that was never in reach is gone, the type of financing you need is available if you understand different choices in traditional and alternative lending. Choose the right financing for your business via finance tailored to your needs.

 

Whether you are looking for short-term financing or long-term viable business finance strategies, business owners should understand that ' Real-world ' accessible financing is no conspiracy theory.

 

Speak to  7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor in financing for small businesses who can assist you with your funding and financing success needs in term loans, asset-based loans, and cash flow/working capital business needs - Let's achieve the growth potential you're capable of with business advice you can trust.

 

 FAQ: FREQUENTLY ASKED QUESTIONS 

 

Who is eligible for the Government Small Business Loan?

Businesses applying for the govt small business loan should have under 10 million dollars in revenue. Owners should be able to demonstrate a positive credit history and be legally allowed to borrow in Canada via either citizenship or landed immigrant status as a key business loan requirement.

 

What is asset-based lending?

 

Asset-based lending is secured lending when loans are focused on your first assets. Asset-based business lenders' loans are based on the current value of your sales and assets - the most common asset categories are accounts receivable, inventory, equipment, and even real estate. The focus on collateral versus cash flow liquidity provides much more borrowing power for business borrowing.

 

Do banks give loans to startups?

 

Banks will lend to startups unsecured because business owners can provide an acceptable personal guarantee and demonstrate sufficient net worth and good personal credit history. Banks will secure these loans via a personal guarantee and a blanket security agreement over the entire business. Interest rates will be determined by the type of financing the bank provides.

 

How do I qualify for a business loan?

Businesses should have good overall credit quality, and owners must have good personal credit scores and credit history. Knowing the types of financing available through traditional and alternative sources is essential, as is understanding requirements. A good loan package application should include a strong business plan.

 

 

How do I get financing options for my business?

 

Steps to Secure Financing for Your Business:

1. Assess Your Financing Needs: Determine the amount of capital required and the purpose of the funds.

2. Review Your Credit and Financial Health: Check your credit score and gather financial documents for evaluation by lenders.

3. Explore Traditional Financing Options: Approach banks and credit unions with a comprehensive business plan and loan proposal.

4. Research Alternative Financing: Consider online lenders, peer-to-peer platforms, or venture capital firms if traditional loans don't meet your requirements.

5. Look into Government Funding and Grants: Check for available government programs or grants specific to your industry or business type.

6. Explore Angel Investors and Venture Capital: Present a compelling business plan and pitch to potential investors for equity funding.

7. Network and Seek Recommendations: Seek advice and referrals from your professional network and experienced entrepreneurs.

8. Prepare a Strong Loan Application: Organize all required documents and clearly explain fund usage and repayment plans.

9. Be Open to Negotiation: Be flexible during negotiations with lenders or investors for mutually beneficial terms.

10. Exercise Caution: Research potential lenders to avoid scams or predatory practices.

Remember to be patient and persistent during the process, as securing financing may take time. Careful planning and preparation will increase your chances of finding the right financing option for your business needs and goals.

 

 

What is the most common type of business loan?

 

Summary of Key Features of Traditional Term Loans:

• Offered by banks and financial institutions.
• Repaid over a fixed term with regular monthly installments.
• Comes with a predetermined interest rate for predictable payments.
• Involves a fixed loan amount given to the borrower.
• Collateral may be required to secure the loan.
• Credit history and financial health are considered during the approval process.
• Borrowers need to provide a detailed business plan and financial statements.

Other Financing Options to Explore:

• Lines of credit
• SBL loans under a defined credit limit under the CSBF program
• Equipment Financing
• Invoice financing

Business owners should consider various financing options to find the best fit for their needs and circumstances.

 

 

What are the 3 main types of financing for businesses?

 

Summary of Main Types of Financing for Businesses:

1. Debt Financing:

• Borrowing money from external sources with an agreement to repay with interest over a specific period.
• Examples: term loans,  business lines of credit, equipment financing, merchant cash advances via a term loan monthly installment credit limit solution - The application process is very quick for most lenders in fintech

2. Equity Financing:

• Raising capital by selling ownership shares to investors or a venture capitalist
• Investors share in profits and losses; no repayment is required.
• Commonly used by startups and high-growth companies.

3. Self-Financing / Personal funds (Bootstrapping):

• Using personal savings, assets, or business profits to fund operations versus taking on debt under startup loans
• Retains full control and avoids debt or equity obligations.
• May limit growth for capital-intensive ventures.
•  

Businesses often use a combination of these financing methods based on their stage of development, financial health, growth objectives, and risk tolerance of the business owner.

 

 

How can an entrepreneur obtain startup financing?

 

Common Ways Entrepreneurs Can Secure Financing:

1. Self-Financing (Bootstrapping): Using personal savings, assets, or business profits to fund the venture.

2. Traditional Bank Loans: Borrowing a lump sum from banks with fixed repayment periods and interest rates.

3. Online Lenders: Utilizing online platforms for faster approval and flexible criteria.

4. SBL Loans Via the Canada Small Business Financing Program: Government-guaranteed loans with favourable terms and flexible

5. Angel Investors: Getting funding from affluent individuals in exchange for equity.

6. Venture Capitalists: Securing funding from investment firms for high-growth startups.

7. Crowdfunding: Raising funds from many individuals contributing small amounts.

8. Family and Friends: Seeking financial support from close contacts for the business's success

9. Government Grants and Subsidies: Exploring non-repayable funding from governmental programs versus personal loan financing solutions

10. Accelerators and Incubators: Joining programs that offer funding, mentorship, and resources.

11. Business Competitions: Participating in competitions for cash prizes or investments.

To succeed in obtaining financing, entrepreneurs should have a well-prepared business plan, understand their funding needs, and demonstrate growth potential and profitability. Building relationships with investors and actively seeking funding opportunities can increase their chances of success.

 

What is the least costly source of financing?

 

Advantages of Self-Financing - Also known as "bootstrapping."

1. No Interest Payments: No borrowing means no interest expenses, reducing overall financing costs.

2. No Equity Dilution: Entrepreneurs retain full ownership and control without sharing profits or decision-making.

3. No Debt Obligations: No regular loan payments, beneficial for businesses with limited cash flow who cannot pay interest on the debt  - Interest rates and other business lender requirements tend to be higher for startups.

4. Flexibility and Autonomy: Entrepreneurs can make decisions without external pressures.

Limitations of Self-Financing:

• Limited Capital: The amount available to borrow money may restrict business scale and speed of growth.

• Not Suitable for Capital-Intensive Ventures: This may not suffice for businesses with high financial needs.

• Growth Constraints: Rapidly expanding businesses may require additional external financing.

 

Entrepreneurs often explore a mix of financing sources as their business evolves and funding needs increase to align with their goals and financial capabilities.

Get Your Business to the Next Level: Exploring Different Financing and Funding Options

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YOUR COMPANY IS LOOKING FOR  BUSINESS FINANCE SOLUTIONS!

From Commercial Loans to Government Funding: A Comprehensive Guide to Business Financing

You've arrived at the right address! Welcome to 7 Park Avenue Financial

Financing & Cash flow are the  biggest issues facing businesses today

ARE YOU UNAWARE OR   DISSATISFIED WITH YOUR CURRENT  BUSINESS  FINANCING OPTIONS?

CONTACT:

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

 

Innovative Business Loans and Funding Solutions to Drive Your Company Forward

 

Business financing needs, aka ' business loans'!  in Canada might be requiring you to ' test the water ‘. But the question that begs to be asked by small business owners  is :

"What amount of capital do you require for your company and, equally important, what is the desired or best funding solution".

 

INTRODUCTION

 

Business owners know that cash flow and the right financing solutions are the lifeblood of a business - from startups to established businesses any company that wants to both expand or generate additional cash flows for funding day-to-day operations - Numerous financing options, both traditional and alternative in nature are available for the business loans and funding you need to succeed.

 

Small and medium-sized companies rarely qualify for the venture capital sought by major tech firms, etc - they want ' main street' /'real world' lending solutions. Let's dig in!

 

 

 

COMMERCIAL LOANS FOR BUSINESSES 

 

Most commercial loans are for established businesses that have been in business for years - startup financing is always a challenge in Canada.  Whether it is a startup or a business already doing well financing can help grow and expand while maintaining efficient day-to-day operations.

A commercial loan can be secured or unsecured - secured loans are asset and collateral-based - assets financing includes accounts receivable, inventory, fixed assets and technology,  rolling stock, and real estate.

 

Unsecured loans tend to be cash flow based and can come in the form of unsecured bank lines of credit or cash flow mezzanine type financing solutions that focus on the quality of the cash flows of the business to meet debt obligations.

 

ELIGIBILITY REQUIREMENTS FOR COMMERCIAL BUSINESS FINANCING

 

Business loan requirements will typically include basic information on the business including financing statements and cash flow projections - Often a business plan is required and in almost all instances will help with funding approval. 7 Park Avenue Financial prepares business plans for clients that meet and exceed bank and commercial lender requirements.

 

 

A full-scale business plan might well be required for larger financing - we're typically talking 1 Million ++ $, and that includes solid executive summaries, cash flow forecasts, etc. But in the ' SME “market (small to medium enterprise) (where a lot of action takes place!) that's definitely not necessarily the case.

 

 

We'll point out though that any small business owner/financial mgr in the SME environment who can't provide basic info such as financial statements,  owner info, background story, etc is somewhat doomed to failure in achieving their company financing goals. In some cases, a third-party business financing advisor/consultant might be the best person to move your financing needs forward.

 

Borrowing limits will always be based on the type of financing needed as well as interest rates commensurate with the credit quality of the business.

 

Keep in mind also that whether it’s a small or large amount of due diligence you will always be required to submit a proper application and relevant backup info - For example - aged receivables, payables, articles of incorporation., tax obligations, etc. 

 

The personal credit history of borrowers will always come up in most commercial loan applications, and in small business financing in Canada, the personal credit of owners is closely tied to how they run their companies in the eyes of lenders. Credit bureau scores can be easily checked at firms such as Equifax and a good minimum score tends to be in the 650 range. 

 

 

WHAT ARE THE FINANCING NEEDS OF CANADIAN BUSINESS

 

 

Many companies in Canada are always working on various .. let us call them ' projects ' which require business capital. The challenge is what type of debt capital or cash flow finance will assist them with any particular project. In some cases, it might simply mean complementary funding to existing loans or business credit lines.

 

Although there seem to be more ' service ' oriented companies than ever before thousands of firms continue to have the basic needs revolving around the investment in receivables and inventory they make in funning and growing their business.  Conservation of cash is always important when it comes to running day-to-day operations while keeping long-term goals in mind.

 

 

BOOST BUSINESS GROWTH WITH THE RIGHT FINANCING STRATEGY 

 

 

Many firms like yours might work hard to obtain larger new orders or contracts in perhaps new geographic or product and service segments of your business. Getting those large new orders/contracts places a strain on day-to-day working capital and cash flow needs, so solutions such as purchase order financing or a short-term working capital loan might well be the solution.

 

Other needs for capital might revolve around basic sales and marketing dollars or the ability to purchase additional products at a significant discount when the opportunity arises. We've met many business owners of the years here at 7 PARK AVENUE FINANCIAL who shared with us stories about being able to pay C.O.D. for an order, thereby allowing them to negotiate up to a 5% discount on that prepayment.

 

Let's not forget that your suppliers carry inventory and a/r investments also!    What will always distinguish a company focused on borrowing capital is its ability to show a well-experienced management team and the ability to produce financial reporting as required by any bank or commercial lender.

 

Always ensure you understand the implications that come with new financing when you already have a senior lender in place. The best solution is of course to have a proper ' cobbled together ' suite of finance solutions that bring the desired level of capital and flexibility.

 

AVOID EQUITY DILUTION IF POSSIBLE

 

Debt financing and cash flow financing are non-dilutive in nature - Don't forget that any new owner/equity capital has the effect of diluting ownership - so although debt and cash flow solutions might seem expensive they are always cheaper than giving up equity ownership via the dilution process.

 

Naturally new capital can come in the form of new owner equity (not what we are talking about here today) or debt and asset monetization. ( That's what we're talking about today ), namely true borrowing and working capital solutions.

 

 

DON'T LET LACK OF FUNDING HOLD YOU BACK - UNCOVERING INNOVATIVE FINANCING SOLUTIONS

 

ALTERNATIVE LENDING SOLUTIONS

 

Traditional loans from financial institutions such as banks aren't always accessible by many businesses - As well banks have lengthy application processes and much more strict criteria for loan approval and eligibility. Alternative Financing solutions are available to the business owner for :

 

Refinancing

Cash Flow Moneitzation

Asset and technology purchases

Business expansion

 

What you are starting a business or focused on improving cash flow solid financing solutions can help you stay ahead of the game, grow sales, and be able to meet business needs around unexpected expenses.

 

What then are the basic financial solutions available in SME COMMERCIAL FINANCE? They typically include the following, and all come with a different interest rate and repayment structure -

 

A/R Financing - (includes factoring, Confidential Receivable Financing)

 

Inventory Finance

 

Bank credit lines/term loans

 

Non-bank full business credit lines – ‘ ABL’ loans

 

Equipment Finance/sale-leasebacks - equipment loans

 

GOVERNMENT LOANS AND GRANTS

 

Government of Canada Guaranteed Small Business Loan Program (this just in! New limit is $1,000,000.00) - Probably the best government-sponsored financing program - Many business owners/ entrepreneurs quite rightly look to the government of Canada for financing programs in the Small business sector. No secret that economists tell us that the 'SME' sector in fact drives the Canadian economy.

 

The Canada Small Business Financing Program - ' CSBFP' is a great start for those looking for capital. Although not as robust an offering as its U.S.  SBA /  small business administration counterpart, the 'SBA' program ( what's with all these acronyms?!) is a viable way to start and grow a business. Monthly payments are made under a term loan structure and a limited personal guarantee is required.

 

Of interest is the fact that many franchises are financed through this program, it's close to a perfect fit for that!

 

Government business loans are available to Canadian business owners who are looking for financing. Although the Canadian government has many different programs in place to help all businesses, they tend to focus on providing small business loans the most. After all, keeping small to medium-sized businesses afloat helps add to local economies and makes the country a more diverse and interesting place to live.

 

Government small business loans may be a viable option for Canadian entrepreneurs looking to grow their businesses. Here is some information about Canada’s loan program to help finance small businesses, known as the Canada Small Business Financing Program or CSBFP. Eligibility is for that firm with under 10 M in sales, and even proprietorships and partnerships can apply. The primary assets financed under the program include leaseholds and equipment and even real estate. The program is often, as we noted in the case of franchises, used to purchase an existing business from a seller or franchisor.

 

Many clients we talk to here at 7 Park Avenue Financial are misinformed about what can or cannot be financed under the program - etc.

 

 

SR&ED Loans- Refundable tax credit financing

 

Royalty Finance

 

Franchise Loans

 

Working Capital Loans - Merchant Cash Advance

 

Unsecured cash flow loans

 

 

Our experience tells us that timelines often drive the financing need, with, unfortunately, many clients demonstrating reactive as opposed to proactive financing searches. Some transactions definitely require more time than others to successfully be completed, and unfortunately, some firms don't have the financial resources to control their destinies! Aka ' running out of cash!

 

Can we provide a guarantee around your business financing needs? Yes, we can! We guarantee that your financing search may well become time-consuming and frustrating and challenging! 

 

CONCLUSION - BUSINESS FINANCING, LOANS FUNDING - A ROADMAP TO FINANCIAL STABILITY AND GROWTH

 

Looking for the right financing options to help your business survive.. and grow?! Whether it's a commercial loan from traditional financiers or an alternative lending and funding option it's important to be well-informed about your options. Get the right business advice about your financing needs and get ready to watch your business grow

 

When it comes to debt and working capital financing call  7 Park Avenue Financial,  a trusted, credible, and experienced Canadian business financing advisor who can assist you with your business finance needs.

 

FAQ: FREQUENTLY ASKED QUESTIONS / PEOPLE ALSO ASK / MORE INFORMATION

 

What are the main types of financing for businesses?

 

   The main types of financing for a business include:

 

Business credit cards and working capital loans / online lenders

Term loans/installment loans

Government Loans

Lines of Credit

Commercial mortgages

Equipment financing /leasing

Business owners own financial resources 

 

What is the difference between secured and unsecured business loans?  

 

Secured business loans such as business term loans are backed by collateral, such as business assets such as real estate, vehicles, or machinery. Personal assets are sometimes used as collateral for bank-type financing. In contrast, unsecured business loans do not require collateral and are based on the borrower's creditworthiness and when used as a  business line of credit the borrower will pay interest only on funds used. Because secured loans provide the lender with collateral in case the borrower defaults, they typically have lower interest rates and longer repayment terms than unsecured loans.

 

 

 What types of funding solutions are available for small businesses in Canada? 

In Canada, small businesses have access to a variety of funding solutions at competitive interest rates, including commercial loans, business loans, alternative lending solutions, and funding options for specific business needs such as business expansion, starting a business, improving cash flow, and property finance. Each funding solution has its own eligibility criteria, borrowing limits, and interest rates, so it's important to do research to find the right fit for your business. Government small business loans work well for a number of startup and early-stage financing needs and are available from banks and credit unions. The maximum loan amount under the government loan program is 1.1 Million dollars.

 

 

How can I apply for a business loan? 

To apply for a business loan for business finances the business owner will need to provide a detailed business plan, financial statements, and cash flow projections. The interest rate on a business loan is typically based on the Bank of Canada policy rate, plus an additional amount that reflects the level of risk being taken by the lender. It's important to do your research on different lenders and their application processes to find the right fit for your business needs.  Minimum personal credit score requirements in the 650  range is required on most business loans ( as well as personal loans )  - Timing on receipt of loan funds should always be considered as alternative financing typically delivers a faster financial solution.

Mastering Business Financing and Lending Sources : A Comprehensive Guide for Entrepreneurs

 

YOUR COMPANY IS LOOKING FOR SOURCES OF BUSINESS FINANCE ! 

Unlocking Your Business Potential: Exploring Business Financing and Lending Solutions

You've arrived at the right address! Welcome to 7 Park Avenue Financial 

        Financing & Cash flow are the  biggest issues facing business today

                              ARE YOU UNAWARE OR   DISSATISFIED WITH YOUR CURRENT  BUSINESS FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

 

Discover the Power of Business Financing and Lending: Fueling Growth and Expansion for Your Company

 

 

Business financing! You've heard the rumour, namely that business lending is more available than ever. Whether it's small business funding or medium to larger corporations we hear capital is almost unlimited.

 

INTRODUCTION

 

For any company in Canadian the ability to access business financing lending solutions is critical, more so for the SME sector which always has a capital challenge. Proper financing and access to capital help businesses overcome growth challenges, allowing companies to seize opportunities that arise.  Understanding what business loans are available and what the benefits of financing are is key to considering traditional and specialized alternative financing solutions for business needs.

 

 

UNSECURED  BUSINESS LOANS - CANADIAN  BANKS 

 

Unsecured business loans in Canada do not require the borrower to pledge specific assets as collateral - Banks focus on an overall view of business and owner credit history, with a focus on profits and business cash flow projections.

But for those firms that for a variety of reasons can't qualify for all or even some of the financing they need from traditional sources such as Canadian chartered banks, there is hope - in the name of asset-based financing options.

 

WHAT STAGE OF BUSINESS IS YOUR COMPANY IN?

Let's backtrack a bit and understand that a company, from a lender's perspective, will always be identified relative to what stage of the company  ' life cycle ' it is in.

 

That might come in several stages, going all the way back to pre-sales revenue r&d  to initial start-up. It's a long journey to that ' high growth' stage. And it's not hard for the entrepreneur to dream about that final stage of business maturity where traditional financing sources are unlimited.

Have we forgotten anyone? Yes, we have, and it's prudent to mention that many companies, for a variety of reasons, are financially challenged and have poor financial performance and some serious cash flow or debt problems. Suffice it to say the good news here is that even these firms can be financed or re-financed, as numerous alternative-based finance solutions are available.

Many firms often find themselves in the position of taking on larger orders or contracts that typical small business funding solutions can't deliver on.

 

 

Purchase Order Financing  - This is an increasingly popular method for a company to support purchase orders or contracts from new or larger clients. Without having to raise new equity or debt your order is financed by the lender based on who your client is and also ensuring you have a legitimate supplier. This financing can be achieved very quickly and makes sense when traditional finance doesn't work.

Accounts Receivable Factoring -  This type of finance allows you to cash flow invoices immediately after you make a sale or deliver your services. The general creditworthiness of your clients allows you to get advances on your sales typically in the 80-90% of the invoice value. Naturally, this eliminates waiting to get paid, which these days seems to take anywhere from 30 to ..dare we say it.. 90 days!

Businesses should investigate Confidential Receivable Factoring  Financing - allowing businesses to achieve all the cash flow benefits of factoring and a/r finance with the ability to bill and collect their own invoices.

Simply speaking A/R financing is a cash flow accelerator!

 

  

SECURED  BUSINESS LOANS / ASSET-BASED LENDING  

 

Asset-based financing solutions allow companies to pledge specific physical assets of the business such as accounts receivable, inventory,  fixed assets and equipment, and commercial real estate owned by the business. Thousands of small businesses in Canada are gravitating to alternative finance solutions.

Non-Bank Business Credit Lines -  Alternative financiers offer credit lines based on your inventory, receivables and equipment as a lump sump collateral. In our experience, these credit lines almost always exceed the amount you would receive under typical bank margining of these assets.

 

  

START-UP LOANS / SMALL  BUSINESS LOANS, AND GOVERNMENT LOANS AND GRANTS  

Starting and growing a business is always a challenge - most early-stage businesses lack business assets as well as the track record that a business lender is looking for. Business plans are essential and will include information on the company and business model,  information on owners, and projected sales and profits - 7 Park Avenue Financial prepares business plans that meet and exceed lender requirements.

Small business loans of various types, both traditional and alternative can provide the cash a business needs to grow or improve production via new assets or technology. Financing is also available in the form of inventory financing, leasehold improvements finance,  and acquisition of assets.

 

 Government Loans and Grants - Canada Small Business Financing Program (CSBFP) 

 

Government loans and grants are always available for funding a business - they are attractive to many business borrowers as loans are typically unsecured and have favourable repayment terms and competitive interest rates. Qualification criteria also easier to receive credit approval compared to traditional chartered bank financing.

 

The Canada Small business loan program is available for any business with under 10 Million dollars of actual or projected revenue. The government bears the majority of the risk with bank and credit union lenders that participate in the program.

 

The loan amount cap on the program is 1.1 Million dollars and recent changes in 2022 to the program greatly increased financing capability, with companies being able to borrow under a term loan structure, as well as lines of credit and working capital and funding of intangible assets. Traditional uses of the program have been the ability to fund leasehold improvements, new equipment purchase assets or technology, as well as acquiring real estate. A business loan calculator will allow simple calculations around monthly payments, amortization, etc. A minimal personal guarantee is also a favourite part of the program.

 

Talk to the 7 Park Avenue Financial team about the government SBL program and the application and process around this popular method of financing business from participating financial institutions,

 

CONCLUSION -  BUSINESS FINANCING BUSINESS LENDING FUNDING

 

As a business owner, you need to understand the different finance options available to grow and succeed in the ultra-competitive markets of today.  Selecting the right lending solution to support growth is key - whether you are looking to fund day-to-day operations, access government loans and grants, buy a competitor, etc. Knowledge of the business lending landscape is key!

 

If your business is growing, or even experiencing challenges investigate non-bank solutions that will allow your firm to be in a  constant position to access capital based on specific needs.

 

Seak to 7 Park Avenue Financial,  a trusted, credible and experienced Canadian business financing advisor who can assist you with business advice and success in achieving business lending solutions.

 

  

  

FAQ: FREQUENTLY ASKED QUESTIONS  / PEOPLE ALSO ASK  / MORE INFORMATION   

 

  

  

What are the best possible sources of business financing?  

 

The best possible sources of business finance include:

Bank loans

Government Loans / Grants

Venture capital/ angel investors

Supplier Financing/ trade credit

Invoice Financing / Factoring

Personal savings / Friends and family

Business credit cards

Short-term working capital loans - lump sum payments via monthly payment based on sales/owner personal credit score - higher interest rate but quickly accessible financing

 

How do you finance business growth?

 

To fund growth and expansion businesses  should investigate:

Reinvestment of earned profits  - they do not bring debt to the balance sheet and do not dilute owner equity

Bank financing for cash loans,  equipment purchases and working capital

Government-guaranteed loan programs 

Fuelling Business Growth - Guide To Commercial Business Loans

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YOU ARE LOOKING FOR A COMMERCIAL BUSINESS LOAN

UNLEASH BUSINESS POTENTIAL WITH THESE DIFFERENT TYPES OF COMMERCIAL BUSINESS LOANS

You've arrived at the right address!  Welcome to 7 Park Avenue Financial 

        Financing & Cash flow are the  biggest issues facing businesses today 

               Unaware / Dissatisfied with your financing options?

Call Now !  - Direct Line  - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs.

Email  - sprokop@7parkavenuefinancial.com

 

UNLOCKING THE POWER OF COMMERCIAL BUSINESS LOANS

 

 

 

INTRODUCTION 

 
In many cases, access to different types of commercial loans can be challenging for business owners to achieve. 

 

Certain types of funding are often much better suited to small business financing needs. There are different types of commercial business loans for funding your business. These essential types of financing help start, grow, and sustain business operations. Other qualifications apply to different kinds of business financing - Choosing the right loan for your business should be job 1! Let's dig in.

 
 

As a business owner, you want to make informed financing decisions. Some loans may offer lower interest rates but more rigid qualifications for borrowing when it comes to qualifying for traditional financial institution bank credit or a similar business credit union solution.

 

WHEN ACCESS TO CAPITAL IS TIME SENSITIVE

 

The time-sensitive borrower must weigh their options to determine which type best meets their needs and circumstances at any given point in time. Some conditions can change over time due to market fluctuations or other factors outside of one's control - whether long-term loans or short-term funding solutions for the loan type.

The good news is that several business finance solutions are more accessible than ever.  Naturally, the ' go-to ' in the minds of many owners and their financial managers is ' the bank. '  Here, capital is virtually unlimited, and the interest rate via fixed or floating rates is typically the lowest regarding the cost of funds for business borrowers.

 

TRADITIONAL FINANCING

 

Traditional loans from banks and other financial institutions are the most common type of commercial business loan. The majority of these loans require collateral,  good personal and business credit, and in some cases, a business plan.

 

The most popular financing in this area is bank term loans, government-guaranteed loans, and business lines of credit. Term loans are lump sum installment type loans for specific projects or investments in the business -  Federal guaranteed loans have less stringent qualifications as the government of Canada backs them.   Access to a business line of credit provides funding for day-to-day business operations, focusing on flexibility/access to capital.

Bank financing comes with a challenge, though - the need to provide full financial disclosure around financial statements, owner personal credit history and net worth,  collateral, personal guarantees,  and in many cases, the requirements to produce a business plan or cash flow forecast. Don't forget to take into consideration the ' timing ' factor, in that the processing time might often be weeks stretching into a month.. or more.
 

 

 

 

 

WHAT TYPES OF BUSINESS LOANS ARE OFFERED BY BANKS?

Types of business loans offered by banks :

Business lines of credit / online banking facilities

Term Loans

Equipment Loans

 

Commercial Mortgage

We can safely say that Canadian banks offer business financing options with the most flexibility, lowest interest rates,  and access to unlimited capital when a firm qualifies.

 

 

 

KEY FACTORS IN BANK LOAN APPROVAL 

 

In recent years access to  SME Commercial financing solutions has changed. Banks and credit unions have become more difficult to get traditional loans from for some businesses; fortunately, there are other options for easy access to the funding they can turn to if this is the case.

 

 

Factors such as years in business, profits, acceptable balance sheet ratios, etc., are key to bank loan approval in a bank's desire to mitigate risk.

Early-stage businesses often utilize personal financial resources to access cash, including business credit cards, loans from friends and family, etc.

 

 

 

At 7 Park Avenue Financial, we encourage clients to separate personal and business financing. Those types of resources are not often the best choice to finance a company, as business failures can significantly damage personal credit.

 

 

ASSESSING THE COST OF FINANCING VERSUS ACCESS TO CAPITAL

 

Is there a clear winner when it comes to interest rates? It turns out not necessarily. Sometimes the longer-term loan will cost you less than its short-term counterpart—even if that one has lower monthly payments and a more affordable interest rate.

 

A lower bank loan, as example, isn't always the lowest-cost loan. This can be true when comparing a long-term lower-interest-rate loan with short-term financing at a higher cost.

 

 

 

ALTERNATIVE FINANCING SOLUTIONS 

 

Alternative loans in Canada are known as non-traditional / non-bank financing for businesses that might in some cases, not qualify for traditional bank financing.  The broad category of these loans comes under the term ' Asset-based Lending'  and includes non-bank business credit lines and invoice factoring. Peer-to-peer lending and short-term working capital loans, also known as merchant cash advances,

Those firms that can't access all or even some of the funding need lender alternative financing to the rescue. Alternative lenders provide the same types of loans available from banks - and are often quicker to approve loans. This financing cost is higher, but it provides access to capital.

 

 
 SPECIALTY LOAN FINANCING  

 

Numerous types of business comes come under the category of  ' specialty finance '. This includes lender financing ( financing for lenders ), equipment and lease financing, commercial real estate financing via mortgages or bridge loans and franchise financing. Talk to the 7 Park Avenue Financial team about how these loans might help your business!

Non-bank business credit lines - focusing on the actual borrowing power of your assets. Asset-based lending is a form of commercial financing in which the company's collateral such as accounts receivable and inventory, is used to provide working capital.

Inventory Financing

A/R financing  ( aka ' factoring ' )

Short-term financing / Merchant Cash Advances /  Corporate credit cards / working capital loans - flexible payment structures to cover operational costs - transactions are approved quickly, and funding is fast compared to traditional financial institutions.

Tax Credit Financing  ( SR&ED loans )

 

Franchise loans - Eligible costs to finance a franchise

 

 

 TALK TO THE 7 PARK AVENUE FINANCIAL TEAM ABOUT YOUR FUNDING NEEDS

Both banks and alternative finance companies provide loans for long-term business growth - These needs might include :

Commercial real estate  mortgages for owner-occupied buildings and  facilities

Mergers and Acquisitions

Franchise Financing

Leasehold Improvements -  ( leaseholds can be easily financed via the Government guaranteed business loan ) New assets can enhance the value of your business.

 

 

Thousands of businesses annually use Government guaranteed loans with competitive interest rates and limited personal guarantee. The total amount available under the program is 1 million dollars.

These types of lending for small businesses are typically longer in duration - ranging from 2-5 years - Government loans can be accessed at competitive fixed or variable rates. This is not an operating line of credit but a term loan structure. Revolving lines of credit are available from banks and alternative lenders if a company is not a start-up. Start-up business loans can be a challenge for entrepreneurs.

 

 

Export Development Canada, another crown corporation, provides purchase order financing, contract financing, and credit insurance for an existing business expanding into other markets in the U.S. and internationally.

 

Talk to  7 Park Avenue Financial about EDC/Export Development Canada and BDC crown corporation financing solutions for a growing business.

 

 
 

 CONCLUSION - TYPES OF FINANCING FOR COMMERCIAL LOANS FOR SMALL BUSINESS & CHOOSING THE RIGHT COMMERCIAL LOAN  

 

Choosing the right type of business loan will help guarantee business success. For approval, business owners and financial managers should carefully assess the financing they need, repayment terms, business loan rates and qualifications, and business loan requirements.  Canadian business financing can sometimes be a long process, so plan and be prepared to weigh the pros and cons of each type of financing that will allow you to fulfill unique business needs and growth plans.

 

Talk to the 7 Park Avenue Financial team about financing and supporting your growth needs without diluting equity. Whether your funding revolves around growing sales revenues, focusing on turnaround financing,   or accessing working capital, we've got the solutions you need. Looking to buy a business or execute a management buyout? Talk to us about our work in this area.

 

When small businesses need capital, it often looks like commercial loans. Commercial loans are different for large businesses because the scale of a loan differs in size, but small and medium-sized businesses also need to rely on access to funds to help fuel growth or fund day-to-day operations.

 

Small businesses rely on commercial loans to fuel growth and fund many day-to-day operations like large corporate entities do. Commercial loans might differ in company size, but access to capital is important for any business looking to grow or operate successfully without having a negative impact or risk financially.

 

For more information about the full potential of different types of business loans, especially if you are focused on ensuring you understand and have access to the right type of commercial loans for your company, speak to 7 Park Avenue Financial,  a trusted, credible and experienced  Canadian business financing advisor with a track record of success in solving Canadian business needs and your goals to stay competitive.

 

 

 

 FAQ: FREQUENTLY ASKED QUESTIONS  / MORE INFORMATION / PEOPLE ALSO ASK

 

 

What is a commercial business loan? 

 

A commercial loan is a financing arrangement between a business and a financial institution like a bank. Loans can be used for various services and are arrangements that typically bring debt to the company's balance sheet. Commercial loans are for corporations and not consumers and generally are under a term loan structure. 

The financing provides the funds to start, grow and sustain ongoing operations. Commercial business loan solutions providers include bans, alternative lenders, commercial non-bank financing companies and business-oriented credit unions. Each provider of business loans will have different credit approval and qualification requirements and different interest rates based on transaction size, credit risk, etc.

 

What are the different types of commercial business loans?

Different types of commercial business loans include traditional bank loans, specialty loans and asset-based lending loan solutions. Conventional loans will be in the form of term loans or business loans of credit, and specialty loans are related to specific industry needs, examples include real estate financing, franchise loans, equipment purchase leasing, etc.

 

How do I choose the right commercial business loan for my business?

 

Choosing the right loan for a business should include assessing factors such as the type of financing needs, availability of flexible repayment terms, interest rate, and approval qualification requirements from the business lender. A business plan will often help identify the type of financing needed, and businesses should be prepared to provide appropriate documentation around financial statements, business plans, and the availability of collateral.

 

 

What are some forms of equity financing?

Forms of equity financing available for a business include angel investors, venture capital companies, private equity firms, and crowdfunding. These forms of financing will often require the business to be in a higher growth stage.

 

   

 What is the minimum credit score for a commercial loan from a bank?   

Commercial banks require a 650+ credit score to lend.

 

 

 What are the most common commercial loans? 

 

 

The most common commercial loans are commercial mortgages, term, government, and bridge loans/business credit lines.