A Business Cash Flow Loan Overview

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Whether it's Mezzanine Financing Or Alternative Finance Solutions You're Ready For Business Capital Solutions

A business cash flow loan ? Whether your company is expanding to increase sales of simply running into the proverbial cash flow crunch business owners might like to know that financing solutions are just around the corner. The trick ? Knowing what types of loans suit your firms exact needs .

Additional capital infusions , whether they come from owners themselves or commercial lenders allow a company to finance specific needs - which are many times industry specific . For example mfg. companies typically require significant working capital for inventory and receivables .
The challenge is of course to understand that additional debt must be both managed wisely .. and paid back! In certain cases your firm might be looking at buying a competitor or a firm that adds business synergies. At the opposite end of the spectrum some owners might be looking to take out the equity they have built up over the years.

Let's also not forget companies who are experiencing some level of financial stress, but true mezzanine loans require strong cash flow as the collateral - those cash flows are not always present in firms experiencing any form of distress of business challenge.

True mezzanine loans are typically complimentary to the debt you already have in place, although if can also be used to displace current lines of credit or owner equity .

Cash flow loans for larger firms are a ' hybrid ' type of financing, in the pecking order of security they are below secured creditors, but above owner equity holders. From the owners perspective collateralized cash flow loans are cheaper than equity raises.

So whats the problem then with cash flow financing ? It's simply that it is much costlier than secured bank debt and in some cases the lender might want some ownership in your firm.

The real mezzanine financing we are speaking of typically is used by larger firms.

What About Cash Flow Financing For Small and Medium Sized Companies?

Companies looking for SME COMMERCIAL FINANCE solutions have the same challenges as large firms - They too want to fund growth properly , buy competitors or finance a management buyout perhaps.

Non bank alternative financing lenders provide business cash flow financing in a variety of ways . Those solutions include

CASH FLOW FINANCING SOLUTIONS

Non bank business credit lines

Inventory Finance

A/R finance

Equipment financing / Sale Leaseback loans

Tax Credit Financing

Short Term Working Capital Loans

Long term ( 2-5 YR ) working capital term loans



Seek out and speak to a trusted, credible and experienced Canadian Business Financing advisor with a proven track record of success , giving you the ability to weigh the benefits and risks of cash flow finance.



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 area 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.
Prior to founding 7 Park Avenue Financial in 2004 his employers over the last 25 years were, ASHLAND OIL, ( 1977-1980) DIGITAL EQUIPMENT CORPORATION, ( 1980-1990) ) CABLE & WIRELESS PLC,( 1991 -1993) ) AND HEWLETT PACKARD ( 1994-2004 ) He is an expert in Canadian Business Financing.

Stan has over 40 years of business and finance executive experience. He has been recognized as a credit/financial executive for three of the largest technology companies in the world; Hewlett-Packard, Digital Equipment and Cable & Wireless. Stan has had in depth, hands on experience in assessing and evaluating thousands of companies that are seeking financing and expansion. He has been instrumental in helping many companies progress through every phase of financing, mergers & acquisitions, sales and marketing and human resources. Stan has worked with startups and public corporations and has many times established the financial wherewithal of organizations before approving millions of dollars of financing facilities and instruments on behalf of his employers.

Stan Prokop

Cash Flow Loan Solutions In Canada : How & Why Mezzanine Financing Works

Is It Easy For Your Business To Get An Unsecured Cash Flow Loan? You Decide

OVERVIEW – Information on mezzanine financing in Canada. Does an unsecured cash flow loan make sense for your company, are you eligible, and how does it work ? Here's your answers!

Cash flow loan
requirements in the Canadian business landscape might often mean that you need some form of mezzanine finance. What are the requirements and challenges in obtaining such financing and how does it work? Let's dig in.

At some point in time many companies realize they need additional capital to grow / expand. In some cases it also might mean they are seizing the opportunity to buy a competitor. In some instances this type of financing is a way for owners to take some cash out of the business based on the current assets and cash flow in the business. It's times like these that an unsecured cash flow loan makes the most sense.

In certain cases, not always though the way to think about mezzanine cash flow loans is that they are a mix of both debt and equity. The debt side of that equation is simple. It's an equity substitute that puts more cash on the balance sheet, therefore improving your overall relationship of borrowed funds versus owner funds.

One of the most common reasons owners/mgr seek cash flow loans is that the alternative for more senior or bank debt have been exhausted. What makes mezzanine finance even more alluring is that although it's a more expensive form of financing it's never more expensive than equity financing which of course dilutes the owner / owner’s position in the company. Ouch!

We made the statement that mezzanine financing is more expensive, usually in the ' teens' when it comes to interest rate. Why is that the case though? Simply because unsecured cash flow loans are a 2nd position behind any other secured creditors. Although there might be a 2nd lien position on your firm by virtue of the new financing it's clear to all that 1st position security on assets is still always held by a senior lender, typically in Canada a Cdn chartered bank.

The most common explanation of why a mezzanine cash flow loan might be considered ' part equity ' is that in some cases the lender might request a warrant or option to buy into the company based on the financing provided.

While large or public companies use this financing and call it various names - convertible debt, warrants, junk bonds, etc the SME COMMERCIAL FINANCE sector in Canada can safely just call this an unsecured cash flow loan. Simple as that.

Mezzanine/cash flow loans are all about ... you guessed it ' CASH FLOW'!

So to be eligible for this financing be prepared to demonstrate past, present and future positive cash flow.

If you're looking to access forms of funding you may not have previously considered seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success

.





SStan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com
OOriginating business financing for Canadian
companies , specializing in working capital, cash flow, asset based financing . In business 10 years - Completed in excess oOf 100 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing. Info & Contact Details :


hHttp://www.7parkavenuefinancial.com



77 Park Avenue Financial

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

DDirect Line = 416 319 5769

OOffice = 905 829 2653


EEmail = sprokop@7parkavenuefinancial.com


'

Canadian Business Financing with the intelligent use of experience '


A

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.


Stan Prokop













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Mezzanine Finance Solutions : The Powerful Persuasion Of Unsecured Cash Flow Financing

Why Mezzanine Financing Might Be Right ( Or Wrong ) For Your Firm

OVERVIEW – Information on mezzanine financing in Canada . When do ‘ Mezz ‘ bridging finance solutions work, and when are they wrong or unavailable for your firm

Mezzanine financing offers a unique allure to Canadian business owners/financial managers that seek additional capital for their firm. However in certain cases this type of finance solution is potentially either wrong for your firm, or, in some cases simply not attainable. Let examine what we call the ' powerful persuasion’ of the bridging finance capability of ' mezz ' and see when it works, and when it doesn't... Let's dig in.

Some of the key uniqueness of Mezzanine solutions revolves around the fact that it has unique elements of debt and equity - rare or non existent in almost all other financing solutions you might be looking at. This is because it's a ' 2nd position' financing that stands behind any secured lenders that might already by in place.

The other persuasive argument around this solution is the issue of collateral - essentially there is none, other than our aforementioned 2nd position on assets. Another key item is the fact that other secured lenders tend to ' love ' your mezzanine finance scenario if only for the fact that it is treated as ' equity ' on the balance sheet by secured/term lenders/lessors.

If the allure of ' MEZZ ' is that attractive how easy is it to get approved. Companies that are traditionally candidates should have attributes in the following areas:

- Established business
- Operating in a viable industry
- Good candidate for growth

Above and beyond those ' attributes' is the requirement for historical, present and future cash flow generation

that shows ability to service the unsecured mezzanine debt.

The minimum amount of financing done in this area is typically $1,000,000.00 and that clearly is on the small size. Larger deals preferred! In some, but not all cases the lender will also ask for a future equity position in the firm, which owners must certainly consider as a factor in considering this method of finance. Top experts advise that firms can usually expect to receive ' mezz' financing at least 1-3 times its cash flow - although clearly amounts will vary.

Any type of debt, secured, or unsecured (Mezz) will inject a certain number of ratios or covenants into the financing. These typically focus around debt to equity, cash flow coverage, etc, but in some cases might even limit your firm to what it can spend and how re Capex or shareholder compensation/dividends.

We haven’t mentioned the ' cost of financing ‘. Suffice to say that borrowing rates for mezzanine bridging finance will typically always be in the ' teens' which reflects the risk a 2nd position lender takes on transactions such as this . Owners/managers typically benchmark this financing cost against other options such as issuing equity which is of course even more expensive.

Is mezzanine bridging finance right for your company? Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your business finance options.

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 100 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN MEZZANINE AND BRIDGING FINANCE EXPERTISE


7 Park Avenue Financial

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

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com



' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Failure & Success – Let Mezzanine Financing & Canadian Subordinated Cash Flow Loans Be The Difference !

Mezzanine financing and subordinated debt and cash flow loans are a solid alternative to many firms who are searching for capital in the ' grey area ‘. Whats the grey area? Simply speaking it can be the ' high ground ' between debt and equity in your firm, both of those having their own challenges to rise. Let’s take a Canadian walk through the high ground!

There are some typical situations in Canadian business financing that strongly lend themselves to ' mezz ' financing. Typically the word ' growth ' will come up often! ... Simply because that’s one of the drivers all too often of the need for cash flow loans financing.

Business financing in general, certainly when it comes to lending is very tuned to ' ratios ‘. We have always tended to call them ' relationships ‘... a lot nicer term we think! But the reality is that a lot of the debt and cash flow and interest coverage ratios your firm currently may possess simply prohibit you from raising the capital you need... today! Naturally as we all know those ratios, covenants, etc, tend to be Canadian chartered bank driven.

Typical mezzanine and cash flow loans tend to be 3-5 years max... from a term perspective. The mezzanine and cash flow loans solutions you consider should be considered as an intermediate option, not a long term one. Sandwiched in between debt and equity subordinated cash flow loans are usually taken out by one or the other of those at the appropriate time.

Given the general nature of security, i.e. your cash flow, and your projected cash flow it seems to therefore make a lot of sense to ensure you have a management team that can convince the cash flow and mezzanine financing lender that ability to repay the loan is there. Common sense 101, right?

So what can cash flow loans be used for? Typical reasons include buying another firm, a buyout by the management team, simply growing the business, and working capital to fund ongoing and projected sales.

There are instances when the owners of a firm wish to recapitalize with mezzanine financing simply to recoup some of their investment... we would offer up that loading the company up with debt requires a strong case to do that. By inference to what we have talked about cash flow loans of this type are rarely for start up or early revenue firms, as those cash flows are somewhat unpredictable to say the least.

Speak to a trusted, credible and experienced Canadian business financing advisor who can determine if this types of financing suits your current profile. A successful mezzanine financing simply compliments and rounds out your full financial package, and provides the middle ground between our two friends, long term debt and equity.




Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :

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