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 optimal. Show all posts
Showing posts with label optimal. Show all posts

Wednesday, October 28, 2020

Solutions For Optimal Financing Of Capital Structure In Canada












 

 

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Solutions For Optimal Financing Of Capital Structure In Canada
Substitute Failure For Success In Canadian Business Financing 
 

Financing your optimal capital structure might sound like a bit of an esoteric or technical term for many Canadian business owners and financial managers - in actuality, it's easier to understand than you might think, and .. Important!

 

The general idea of capital structure is for the business owner/manager to have a strong sense of whether money is coming from, or could come from your suppliers, your bank and other lenders, or your own owner equity in the company. That is the debt and equity balancing act!It's those three that comprise your capital structure! As debt increases so do those interest payments! Using debt properly and the cost of debt should always be top of mind with a business owner / financial manager. As debt increases, leverage becomes a double edged sword.

 

The manner in which you finance your optimal capital structure makes you successful or drives you into bankruptcy with too much debt. At 7 Park Avenue FInancial we prefer the former by the way - which is why we focus on delivering proper corporate finance structures.

 

In some ways, you might be managing your capital structure quite uniquely and successfully already. Case in point - supplier terms. Just getting a supplier to allow you to pay anywhere from 60-120 days brings you a solid source of cash at minimal cost. Hopefully, the ultimate cost isn’t the relationship you have with your suppliers of course!

 

WHO ARE THE LENDER TO ASSIST IN OPTIMAL CAPITAL STRUCTURE / BUSINESS FINANCE

 

Canada's chartered banks, asset-based lenders, lessors, or working capital firms such as receivable finance and PO based finance firms are your short and long term lenders for capital structure as it pertains to debt. And that debt of course is short term, or long term, depending on the nature of the borrowing.

 

ISSUES AROUND COLLATERAL

 

Another point to be made is that the debt you undertaking within your capital structure has collateral attached to it -and there's only so much collateral to go around.  A positive aspect of debt is that you can leverage it to maximize returns on capital and investment - if done properly.  A great rule of them is that your long term debt is not greater than your shareholder equity. That the standard debt and equity relationship for  many industries And when it comes to total debt a typical bank requirement is that it should exceed equity by no more than 2 or three to 1.Naturally the cost of capital has to be factored into your analysis , and financial experts agree debt is cheaper than giving up equity ownership.

 

BUSINESS ACQUISITIONS REQUIRE PROPER TIME SPENT ON OPTIMAL FINANCING STRUCTURE

 

If you are looking to purchase a business for example it's important to understand that financing will come from a combination of lenders,  your firm or you personally, and potentially the seller - aka the Vendor Take Back.

 
BANKS AND CASH FLOW COVERAGE

 

In talking to a bank about financing your capital structure they are going to focus on cash flow stability.  Banks and other lenders use a simple cash flow analysis tool called ' coverage ' and they like to see cash flow exceed debt coverage by 1.25:1 typically.

 

Lenders, i.e. banks and other commercial finance firms will at the same time look to the balance sheet for collateral - which typically is going to come from receivables, inventory and fixed assets and even real estate. In your search to find the optimal business capital for your firm your firms 'net worth ' / market value will always play a key role.

 

CONCLUSION

We have seen that capital structure is all about the proper mix of debt and equity - the goal is to enhance the value of your company while ensuring you are taking on the right level of risk to ensure the proper ' ROE ' - aka return on equity.

Getting a handle on today’s subject will help guarantee business success. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with financing solutions within your capital structure.


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 '


Sunday, January 13, 2013

Solutions For Optimal Financing Of Capital Structure In Canada







Substitute Failure For Success In Canadian Business Financing

OVERVIEW – Information on implementing financing solutions for optimal capital structure in Canada .




Financing your capital structure might sound like a bit of an esoteric or technical term for many Canadian business owners and financial managers - in actuality its easier to understand than you might think, and .. Important!

The general idea of capital structure is for the business owner/manager to have a strong sense of whether money is coming from, or could come from your suppliers, your bank and other lenders, or your own owner equity in the company. It's those three that comprise your capital structure!

The manner in which you finance your capital structure makes you successful, or drives you into bankruptcy.

We prefer the former by the way!

In some ways you might be managing your capital structure quite uniquely and successfully already. Case in point - supplier terms. Just getting a supplier to allow you to pay anywhere from 60-120 days brings you a solid source of cash at minimal cost. Hopefully the ultimate cost isn’t the relationship you have with your suppliers of course!

Canada's chartered banks, asset based lenders, lessors, or working capital firms such as receivable finance and PO based finance firms are your short and long term lenders for capital structure as it pertains to debt. And that debt of course is short term, or long term, depending on the nature of the borrowing.

Another point to be made is that the debt you undertaking within your capital structure has collateral attached to it -and there's only so much collateral to go around. A positive aspect of debt is that you can leverage it to maximize returns on capital and investment - if done properly. A great rule of them is that your long term debt is not greater than your shareholder equity. And when it comes to total debt a typical bank requirement is that it should exceed equity by no more than 2 or three to 1. Otherwise debt becomes a burden .



If you are looking to purchase a business for example its important to understand that financing will come from a combination of lenders, your firm or you personally, and potentially the seller - aka the Vendor Take Back.

In talking to a bank about financing your capital structure they are going to focus on cash flow stability. Banks and other lenders use a simple cash flow analysis tool called ' coverage ' and they like to see cash flow exceed debt coverage by 1.25:1 typically.

Lenders, i.e. banks and other commercial finance firms will at the same time look to the balance sheet for collateral - which typically is going to come from receivables, inventory and fixed assets and even real estate.

Getting a handle on today’s subject will help guarantee business success. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with financing solutions within your capital structure.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS FINANCING SOLUTIONS



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 10 years - has completed in excess of 80 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 re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/capital-structure-financing-solutions-optimal.html






7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com