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 loan alternatives. Show all posts
Showing posts with label loan alternatives. Show all posts

Saturday, June 27, 2020

Access Business Loans Via These Alternative Business Financing Solutions


















The best business loans and Canadian business financing options for business owners and financial managers aren't always the obvious ones when it comes to achieving capital needs for your company. If there is any good news in today's highly competitive business environment it is that funding options and a loan alternative are available for everything from startups, growing businesses, as well as financially challenged firms.

Why Is The Use Of Alternative Finance Growing In Canada




Three reasons by alternative lending is booming in Canada :

1.Credit Restrictions from Canadian Chartered Banks

2.Demand for Funding That Is More quickly Accessible and attuned to industry needs

3.Increased Knowledge Around Benefits of Alternative Finance - Studies show that Canadian business borrowing in the past was somewhat skeptical about dealing with non ' bricks and mortar ' financial institutions, but that is changing quickly.

In fact industry statistics from organizations such as the IVEY SCHOOL OF BUSINESS/UNIVERSITY OF WESTERN ONTARIO advise that 867 Million dollars of alternative capital were borrowed via non bank lenders for figures available just a few years ago.


Constant changes in the economy, ( pandemics included !) make it difficult for companies to access the business capital they need. Mainstream financing via Canadian banks etc is not always available when you need it, and alternative methods of financing and the ability to get a commercial loan in canada have almost become an imperative for business owners and their financial managers to inspect.


It is no secret that many industries have unique financing requirements, and even within industries, no company might have the same needs - hence our focus on ... options!

So what in fact drives the need for financing? It typically comes down to the longer-term goals of your company, the size of your business, and the overall 'risk rating' that both traditional and alternative lenders use to provide their capital to your company.

KEY POINT - When it comes to SME COMMERCIAL FINANCE options at 7 Park Avenue Financial e strongly recommend that business owners separate their business and personal credit. Although traditional banking does, in fact, focus on the reflection of your personal credit history as a measure of how you will handle business affairs it is still appropriate to have commercial lenders draw on credit info from business credit bureaus such as Dun and Bradstreet - building business credit and being able to demonstrate proper financials and a business plan and cash flow projections goes a long way to business financing success.


Business owners typically gravitate to term loans - it's a common form of loan that at its basics requires you to make monthly payments over a pre-determined period - typically 2-5 years. These days many clients we speak to are looking for short term working capital loans, typically covering temporary shortfalls or unique situations. These loans are very popular, readily available, and even more good news, quick to close, often in a matter of a week or two.

Those short term working capital loans and financing loans compete directly these days with traditional banks, who of course have better rates but harder approval criteria. Often no hard collateral is required, just the 'promise' of the business and business owner to pay. Typically these loans are for 10-20 percent of your annual sales volume, as a guideline to keep in mind.

Government guaranteed start-up loans are also popular. The government is committed to billions of dollars in these loans every year in Canada. Repayment is long, and covers 3 assets you can finance - equipment, leaseholds, and even real estate! The downside - those great rates and terms and flexibility come with an application process that can be cumbersome if you don't have the expertise of an experienced Canadian business financing advisor.

Businesses run day to day on credit lines, typically secured by receivables and inventory. Asset based lenders provide non-bank lines that offer generous borrowing margins.

Other Alternative business financing and immediate sources of business funding include:

Short Term Working Capital Loan ( Also called 'MCA's or Merchant Advances )

These loans are usually very quickly available with the main criteria for approval focusing on your years in business and loan amounts geared to your annual sales, typically in the 15-20% range. The personal credit history of the owner/owners is also a data point considered for funding. Loan repayments are typically spread out over a year and are often customized to your cash flow receipts from cash and business receivables. Interest rates are higher but flexibility and quick access to capital is the key benefit . Those are often the key benefits to any alternative lending solution .

Receivable Financing


A/R financing is a mainstay of alternative business financing. Financing is based on a high percentage of your receivables, typically 90% which is significantly higher than Canadian bank receivable margining policies. Rather than an ' interest rate ' per se commercial receivable finance funders charge a fee, typically in the 1.5- 2% range.

Firms with good gross margins who can easily absorb a 1-2% reduction in their profit margins can find themselves virtually becoming an automatic cash machine as they generate cash at the same time they create and grow sales revenues. It is generally improper to compare this type of financing to a bank business loan as the interest rates and fees are not a ' apples to apples ' comparison.

Receivable financing facilities can be stand-alone, or combined with other financing, such as an asset based line of credit that allows you to borrow under one facility based solely on your assets and sales. At 7 Park Avenue Financial we recommend that is a sole stand alone facility is used a CONFIDENTIAL RECEIVABLE FINANCING solution be implemented, allowing you to bill and collect your own receivables while reaping all the benefits of a/r financing/factoring.This financing is not a working capital loan that brings debt to the balance sheets, it's simply a monetization of your current assets.

Note that you can even finance a business purchase with an asset based loan.



Purchase Order funding
/ ABL Asset Based Lines Of Credit - These credit line and sales financing solutions are focused on business sales revenues and current and fixed assets. Much less reliance is placed on balance sheet ratios, covenants, outside collateral, personal guarantees, etc, often demanded by more traditional lending institutions.




Equipment Leasing / Equipment Loans / Sale leasebacks


Equipment loans and lease financing solutions are utilized by the majority of North American businesses to acquire both new and used assets. Business owners are sometimes surprised that used assets can also be financed, as long as they are acquired from another business or distributor, not via a ' private sale '. Business borrowing via Sale leasebacks can generate working capital for assets your firm owns outright, including real estate.

Equipment lease approvals are based on your ability to meet the monthly payment with respect to your cash flow, as well as being able to demonstrate the asset financed is a benefit to your business. The asset/equipment is of course the main collateral for the le assets. It is often recommended that you discuss with your accountant the lease vs. buy and the lease vs. loan business financing decision.


Government Of Canada Small Business Loan Program
- Small Business Loans Canada

Although a mainstay of traditional banking many business borrowers are not familiar with the program and have a challenge in locating a banker who will work with them on this government-guaranteed loan. The formal name for the program is the Canada Small Business Financing Program
and allows small businesses, including startups to get 'traditional bank loans ' based on a guarantee the federal government, via INDUSTRY CANADA, provides to the banks.

Loans are up to $1,000,000.00 which is hardly ' small ' and over the last decade over 60,000 loans have been made under the program. Any new or established businesses under 10 Million in revenue can apply. AT 7 Park Avenue Financial we work with clients to ensure a speedy approval without missteps typically associated with bank borrowing - so we work with clients on a business plan, cash flow, company history, management overview, etc.

That business plan and other info help assure a speedy response and approval. Business owners borrowing under the program must have a decent credit score in the 650 range per Canadian credit bureaus such as Equifax.

It is very important to note that these ' SBL ' loans ' can only be used for equipment and leasehold interests and real estate. Unlike the U.S. counterpart in the U.S. it is only focused on those 3 asset categories and can't be used for cash flow, working capital, r&d, inventory, etc. Loans to buy a business in Canada are often utilized under the Govt SBL program.

Many franchise financing needs work very well in this program. As well rates are comparable with Canadian bank interest rates and terms vary from 2-5 years. A business start up loan is often the best way to utilize the program.


Statistics show that more and more Canadian business owners are understanding the various business finance options available to them. As opposed to taking to numerous commercial lenders it makes more sense to talk to a proper business advisor around types of financing, costs, and conditions. Canadian business has been somewhat slow to adopt alternative financing compared to ur U.S. counterparts but for those willing to investigate options there are numerous opportunities to finance your growth and operating needs.



Similar to bank loans for businesses and other mainstream financing alternative funding sources all have their benefits and potential drawbacks if not accessed properly, and for the right reasons - so investigate the options that best suit your firm's immediate needs. Seek out and speak to a trusted, credible, and experienced Canadian business financing advisor with a track record of success.





7 Park Avenue Financial :

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769


Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !




7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



Business financing for Canadian firms, specializing in working capital, cash flow, asset based financing, Equipment Leasing, franchise finance and Cdn. Tax Credit Finance. Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations.


' Canadian Business Financing With The Intelligent Use Of Experience '


ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations. He is an experienced

business financing consultant

.

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 financing 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.

Click here for the business finance track record of 7 Park Avenue Financial




7 Park Avenue Financial/Copyright/2020
































7 Park Avenue Financial :

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769


Email = sprokop@7parkavenuefinancial.com

http://www.7parkavenuefinancial.com

Click Here For 7 PARK AVENUE FINANCIAL website !




7 Park Avenue Financial provides value-added financing consultation for small and medium-sized businesses in the areas of cash flow, working capital, and debt financing.



Business financing for Canadian firms, specializing in working capital, cash flow, asset based financing, Equipment Leasing, franchise finance and Cdn. Tax Credit Finance. Founded 2004 - Completed in excess of 100 Million $ of financing for Canadian corporations.


' Canadian Business Financing With The Intelligent Use Of Experience '


ABOUT THE AUTHOR

Stan has had a successful career with some of the world’s largest and most successful corporations. He is an experienced

business financing consultant

.

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 financing 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.

Click here for the business finance track record of 7 Park Avenue Financial




7 Park Avenue Financial/Copyright/2020























Access Business Loans Via These Alternative Business Financing Solutions













Tuesday, December 9, 2014

Business Financing In Canada : Knowing Loan Alternatives Is Preventive Medicine For Your Company





Looking For All Seasons Business Financing ? Kicking The Tires On Loan Alternatives



OVERVIEW – Information on business financing and loan alternatives in Canada . Knowing the ‘ credit box ‘ is key to successful debt and asset monetization financing



Business financing
, and loan alternatives, in Canada is either at one time (or constantly!) sought by owners/financial managers. If loan options are not understood chaos can reign supreme. Let's dig in.

Unless you're solely in the retail business cash flow, working capital, and debt alternatives should be on the table. We're constantly amazed at the amount of time new clients have spent chasing down financing in areas they will never qualify for - these might include VC equity, Private Equity, etc.

Not knowing how to obtain loan financing, and more importantly, knowing what finance sources you qualify for are key points to consider. There's a great analogy that Queen Isabella was the first VC, having financed Chris Columbus - and probably without a business plan! Key requirements are that some sort of equity be in place and with products and services that have future cash flow potential.

Private equity groups are on the other hand looking for no early development firms, and typically favor niches in certain industries they are familiar with. Whether it’s a VC or a Private Equity Group prepare for: DILUTION OF OWNERSHIP!

Early stage businesses, including start ups should take advantage, or at least investigate the Government Small business loan option. Getting someone to cover off and guarantee your loan is always difficult, so if the Canadian govt is willing to do that... check it out.

Business owners can be forgiven for not breaking down their financing needs into different loan types - that might be:

Lines of Credit - bank revolving credit facilities / non bank asset based lines of credit (typically these finance receivables and inventory)

Term loans - secured / unsecured cash flow loans

Equipment Leasing

Asset Monetization - tax credit financing, sale leasebacks, etc

In every case the owner / manager needs to understand if they fit into the ' credit box ' that defines any particular loan or asset monetization. Those ' fit factors’ include: length of amortization/ amount borrowed/collateral/personal guarantee requirements/ down payments

Business owners in our observation seem to have a desire to blanket the market with their loan / financing request. This often backfires for the simple reason they don't understand the particular ' niche ' that commercial finance company or bank or alternative lender specializes in.

So can we summarize key aspects to ' all seasons' financing? Key areas to focus on are:

Understanding lender specialties

Ensuring proper documentation is immediately available - i.e. business plans, cash flow forecasts, and owner information


Being prepared and knowing finance alternatives is in fact the ' best preventive medicine ' for your financing needs. Consider seeking out and speaking to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can help you avoid ' tire kicking' in Canadian finance.




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 FINANCING 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



Email
= sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '


































Sunday, August 10, 2014

Alternative Business Financing In Canada : The Art Of Loan Alternatives






Capable Of Changing Your Mind On Alternative Financing Techniques ?


Information on alternative business financing in Canada . What loan alternatives are available to Canadian business when traditional solutions can’t be accessed, aren’t enough , or don’t work




Loan alternatives
in Canada come in a variety of forms in Canada. 'Alternative business financing ' is a term we've often thought a bit unusual on occasion, if only for the fact that commonly used business finance alternatives are in many cases tens of years old, and in some cases thousands ! For your firm to be successful in accessing the capital it needs it’s a question of an ‘art’ and a ' science '. Let's dig in.


Business lending in Canada took a major step back in the recession of 2008. Business owners and financial managers are told today that we're back to an abundance of capital - however it never seems to be for them!

It's tough enough to grow your business in a good economy let along one that doesn't provide the right loan alternatives. What then is traditional financing and what's alternative? ask our clients. The simple answer is that it’s financing solutions outside of Canadian chartered banks. The solutions provide do the same thing - they provide cash flow, capital, and loans, but rates, terms, structures, and day to day mechanics are often different.

Stats vary from country to country of course but top experts say that in many cases almost 25% of businesses that apply for bank credit are declined. Typical requests from the bank come in two categories - term loans and revolving credit facilities.

‘ASSET BASED FINANCE ' is the general category for putting together all the different solutions for asset and cash flow financing. These solutions include:

A/R Financing (Factoring) (Our recommendation for clients here is CONFIDENTIAL RECEIVABLE FINANCE

Inventory Financing

Tax Credit Finance

Asset based ABL lines of credit

Purchase Order Financing

Sale Leasebacks /Bridge Loans
Working Capital Term Loans / Mezzanine unsecured cash flow loans

Crowd funding/ Royalty finance techniques


Our first example, A/R non bank financing has only been around a thousand years or so... right around the time the Dead Sea was just only getting sick!
That's our tongue in cheek comment on why ' Alternative ' is in fact more common than most people think. This single alternative form of cash flow finance has a strong appeal to thousands of business owners/financial managers because it immediately ' cash flows ‘your sales. The trick is to pick the right facility at rates, terms and day to day mechanics that makes sense.

While there is no doubt that banks still provide in Canada the huge majority of ' Traditional ' financing the newer forms of capital access are in many cases complimentary to the bank - but essentially are often the real alternative when bank capital can't be accessed.

More and more accountants, lawyers and business peers are recommending loan alternatives outside the bank structure. This pool of capital is large and diverse. In our experience many key financial problems are in fact solved by non traditional finance - and some of the most successful companies in Canada and the world were in fact started by owners and managers who went looking outside the traditional landscape.

If you want to know how Canadian business financing has evolved, and how to navigate the seemingly ' maze ' of financial solutions
seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you to explore both the art and science of loan alternatives.




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 FINANCING ALTERNATIVES 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



Email
= sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '