Small Business Borrowing In Canada : Your Self Driving Solutions To Cash Flow & Capital Financing

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YOUR COMPANY IS LOOKING FOR SMALL  BUSINESS BORROWING & FINANCING SOLUTIONS!

Against the Odds: Small Business Financing and Cash Flow Solutions in Canada

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?

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

EMAIL - sprokop@7parkavenuefinancial.com

 

SMALL BUSINESS LOAN SOLUTIONS IN CANADA

 

Small business borrowing in Canada forces business owners and financial managers to recognize the need for cash flow and capital, but these two key areas are challenging in many cases.

What solutions are, in fact, available via business lending, and do they need to be temporary, current, or permanent? Is a ‘self-driving ‘  business loan solution available for your business goals.?! Let’s dig in.

 

INTRODUCTION

 

In today's business environment, acquiring funds is vital for businesses that aim to profit and expand. Yet, the complexity of understanding the borrowing options and their prerequisites can be overwhelming.

 

Small and medium-sized enterprises (SMEs), which form the backbone of the Canadian economy, often encounter difficulties in accessing capital and are often unable to raise equity financing.

 

Although conventional bank lending has bounced back since the major downturn in 2008 as well as the Covid pandemic,  smaller businesses frequently find the path to securing funds challenging. However, aside from conventional bank loans, Canadian SMEs have a variety of alternative lending solutions at their disposal.

 

 

WHAT TYPES OF FUNDING OPTIONS ARE AVAILABLE FOR SMALL AND MEDIUM-SIZED BUSINESSES IN CANADA

 

Securing funding for your small business involves considering various alternatives.

 

The traditional bank loan, via banks and business-oriented credit unions, requires an extensive application process. Government of Canada  Small Business Loans, which come with a federal guarantee to the bank,  are another option. These are government-backed loans specially crafted for small businesses, frequently offering more attractive terms and lower interest rates.

 

Other options include alternative lenders like online platforms known for their flexibility in requirements and quicker approval times. Factoring solutions such as  Invoice financing and short-term working capital loans are also worth considering, enabling you to leverage your unpaid invoices or projected future sales.

Business owners must weigh the advantages and disadvantages of each funding option to identify the one that best aligns with their business's requirements and financial standing.

 

 

  

GEARING UP FOR GROWTH  

 

We can't count the number of clients we meet who want to gear up for growth but can't due to business financing constraints -

 

Recent studies indicate 87% of small to medium-sized businesses want to invest more in their company - and the 7 Park Avenue Financial team can demonstrate several ways in which that can be achieved.

 

  

TRADITIONAL LENDERS VERSUS ALTERNATIVE LENDERS   

 

Traditional financial institutions like banks and credit unions have historically been the preferred choice for small business loans due to their competitive interest rates and solid reputations.

 

However, their loan application process can be quite extensive and requires thorough documentation. They often have strict credit criteria, making it hard for small businesses with limited credit history to obtain financing.

 

Alternative lending has gained popularity for thousands of businesses in Canada.  Alternative lenders offer a simplified application process with faster approvals and show more leniency towards credit requirements, making them accessible to a broader spectrum of businesses.  While financing costs and interest rates tend to be higher, they are reflective of greater risk to the lender.

 

Securing a bank loan can be a tough task due to stringent requirements like good personal credit scores, collateral, and a proven business track record.

 

Term loans, often provided by banks, have a definite duration or term and are ideal for long-term business investments and expansion. They're repaid through regular monthly installments, with interest rates dependent on the current index rate, creditworthiness, and loan term.

 

The Business Development Bank of Canada (BDC), a federal development bank and a government crown corporation also plays a role in aiding Canadian SMEs. It provides specific financing, growth and transition capital, venture capital, and advisory services. Talk to the 7 Park Avenue Financial team about BDC programs and qualifications.

 

 

HAVE YOU CONSIDERED ALTERNATIVE FINANCING? 

 

Currently, alternative financing is so popular due to its access to credit and flexibility as opposed to a business loan from the bank. Bank loans for businesses are often typical to qualify for when it comes to new or growing companies needing assets and cash flow solutions.

 

Business owners don't want to run their company on business credit cards !! - They want access to business capital.

 

ACQUIRING NEW ASSETS OR TECHNOLOGY/COMPUTERS/SOFTWARE?

 

Even hiring new people needs cash!  We always remind clients that Equipment leasing is the most solid method of investing in new equipment/technology, software, etc. In many cases, it's a permanent solution required when it comes to business loans, which necessitates a good understanding of your growth and capital needs.

 

The best way to grow sales and profits is to ensure you have the right working capital solution for your needs. A typical need we encounter with many of our clients is their ability to have enough working capital to buy inventory and fulfill new contracts and orders.

 

 

 

FINANCING CURRENT ASSETS - ACCOUNTS RECEIVABLE AND INVENTORY FINANCING 

 

You have a working capital challenge if you carry the additional inventory and receivables that come with that growth. Therein lies the challenge - what type of solution do you need, and how do you find it.  Naturally, you want a facility that meets your needs, can grow with your firm and is structured under the right terms and rates from small business lenders that want to support your business.

 

If you have a proper working capital facility or line of credit, that should generally require no permanent additional working capital funds.

 

Many business owners don't know or understand where that cash flow comes from. It comes from two areas, your ability to maximize your current assets, i.e. receivables, inventory, and purchase orders, or new debt that you are willing to take on in the form of a cash flow working capital loan.

 

Regarding the former solution, Canadian chartered banks offer the best rates, terms, and structure to maximize working capital when applying for a business loan. The challenge is that you cannot always get the money and capital you need to grow in the Canadian chartered banking environment without taking on personal risk. Also, when it comes to bank loans for small businesses, the bank places significant emphasis on the personal guarantee aspect of financing approval.

 

The key to understanding your needs is your ability as a Canadian business owner or financial manager to understand your working capital cycle - i.e. how fast do you collect your receivables, how does your inventory turn, and what are your payment terms or pressures from suppliers?

 

GOVERNMENT LOANS FOR SMALL BUSINESSES - THE SBL LOAN!

 

The Canada Small Business Financing Program is a solid business credit alternative that finances purchasing and financing of equipment, property / real estate, and leasehold improvements and is used by thousands of firms each year. In a way, it's a type of bank loan for business but sponsored by the government.

A company is eligible if it has less than 10 Million dollars in gross annual revenues. Canadian-based business solutions from the federal government should always be explored as an alternative. Interest rates under the program are very competitive and attractive from a  business bank or participating credit union. The interest rate is pegged to Canada's prime rate, and a typical maximum credit amount is in the 350k range, and business banking is maintained at your chosen branch.

 

The maximum loan amount under federal government loans is 1 Million, but that loan cap relates to real estate only - access to funds for equipment and leaseholds is typically the 350k amount.

 

You can facilitate a government loan in a financial institution such as a bank or credit. Let 7 Park Avenue Financial teamwork you quickly through the application process. No personal assets are taken as security for the Government Small Business Loan.

 

The program is a term loan structure, not a line of credit. The loan typically has monthly payments over a 2 to 5-year term. A good credit score and the owner's personal credit history are required to get flexible financing tailored to your needs. Any company or proprietorship may apply.

 

Small businesses and start-up firms will always require special expertise and assistance accessing capital and understanding costs. Here, it's important to differentiate between what type of investment you need (assets? overdrafts? cash flow?) to demonstrate the right level of owner commitment and expertise.

 

Sometimes, a detailed business plan is either required or helpful - 7 Park Avenue Financial prepares business plans that meet and exceed the requirements of banks and commercial lenders.

 

 KEY TAKEAWAYS 

 

1. Small and medium-sized enterprises (SMEs) in Canada have a range of funding options beyond traditional bank loans, despite the challenges they often face with conventional lending.

2. Traditional bank loans offer competitive interest rates but come with a complex application process and stringent credit criteria which may exclude some businesses.

3. Alternative lenders have emerged as a viable solution for businesses unable to qualify for traditional bank loans. They offer simpler application processes, quicker approvals, and are less strict with credit criteria. However, they usually charge higher interest rates to compensate for the greater lending risk.

4. The Canada Small Business Financing Program provides government-backed loans for businesses with gross annual revenues of less than $10 million, making them a practical option for SMEs.

5. Factoring solutions, such as invoice financing, offer another alternative, allowing businesses to leverage unpaid invoices or projected future sales for financing.

6. SMEs need to thoroughly understand their fiscal conditions and long-term goals to select the most suitable funding option.

7. There are tailored options like Business Development Bank of Canada (BDC) financing, traditional bank loans, and asset-based lending solutions that can be explored based on specific business needs and circumstances.

 

  

CONCLUSION

 

Navigating the complexities of securing funding for your small business can be challenging for the business owner. However, with proper knowledge and planning, business owners and financial managers can successfully overcome the hurdles of the borrowing process and secure the necessary funds for your business to prosper.

 

It's crucial to thoroughly examine different funding options, taking into account elements like interest rates, repayment plans, and associated fees. Opt for a solution that most closely matches your business's fiscal conditions, business needs,  and long-term goals.

Investigate non-traditional funding sources such as government loans. These can serve as supplementary channels of support and finance for your business.

 

Despite the obstacles Canadian small businesses may encounter in capital acquisition, there are numerous borrowing options beyond traditional banks. SMEs can look into bank loans, BDC financing, or asset based lending solutions, depending on their particular needs and circumstances.

 

If you're looking for that 'self-driving solution to business funding, speak to 7 Park Avenue Financial, a trusted, credible and experienced Canadian business financing advisor who can assist you with your small/medium business borrowing business needs and real-world business advice for small business financing solutions for your next step to business growth. Whether it's bank small business loans or alternative funding solutions, we've got your back on the challenges you're facing!

 

FAQ: FREQUENTLY ASKED QUESTIONS

 

What is small business borrowing?

Loans are a great way for businesses to grow, but not all loans have the same terms. A term loan is one of those varieties of funding that gives business owners access to funds with a monthly payment and interest rates as lenders offer.

Small business owners often need a monetary boost for their projects and growth. Term loans can be given to them by banks, including real estate or equipment purchases as well as restaurant expansions.

 

What is the Canada Small Business Financing Program?

 

The Canada Small Business Financing Program can help small businesses in need of funding by providing loans for various purposes. 

The program can help small businesses get funding from financial institutions. Loans are available for up to $1,000,000 with a shared risk between the borrower and lender. The CSBFP offers loans that may be used to purchase equipment or lease improvements on fixtures such as new machinery, tools, etc.

 

• The Canada Small Business Financing Program (CSBFP) facilitates loans for small businesses by sharing the risk with financial institutions.
• In the past decade, over 53,000 CSBFP loans amounting to $10 billion have been granted to small businesses.
• Eligibility includes small businesses or start-ups in Canada with gross annual revenues under $10 million. Farming businesses are not eligible.
• The maximum loan amount per borrower is $1.15 million, subdivided into $1 million for term loans (with specific limitations) and $150,000 for lines of credit.
• To apply, a business must approach a financial institution (bank, caisse populaire, or credit union) in Canada. These institutions have the sole responsibility for loan approval. A good personal credit score and a business bank account is required.
• Term loans can finance costs related to commercial property, equipment, leasehold improvements, intangible assets, and working capital. Examples include financing commercial vehicles, hospitality equipment, software, production equipment, and franchise costs.
• Lines of credit can be used to cover day-to-day operational expenses.
• Interest rates vary. For term loans, the maximum is the lender's prime lending rate plus 3% for floating rates or the lender's residential mortgage rate plus 3% for fixed rates. For lines of credit, the maximum chargeable is the prime lending rate plus 5%. Interest payments can be tailored to business needs
• A 2% registration fee is applied to the total loan amount under the program, which can be financed.
• Lenders have the option of requiring an unsecured personal guarantee. Security must be taken on the assets financed or other business assets, depending on the type of financing.
• Buying existing businesses such as franchises can be funded  under the program

ChatGPT

 

 What are the factors to consider when choosing a lending option?

 

1. Interest Rate: This is a crucial factor in determining your overall borrowing costs. A lower rate can significantly reduce these costs and make loan repayment easier. However, rates can vary based on the lender, loan type, and creditworthiness.

2. Repayment Term: Shorter repayment terms generally mean higher monthly payments but lower total interest costs, while longer terms can result in lower monthly payments but increased total interest costs. Consider your business's cash flow and financial projections to select the most appropriate term.

3. Associated Fees: Be aware of any fees tied to the loan, such as origination fees, prepayment penalties, or late payment fees. Over time, these can contribute significantly to the total cost of borrowing.

4. Lender's Reputation and Customer Service: Assess the lender's reputation and quality of customer service. Look for reviews and testimonials from other small business owners to evaluate their experiences with the lender. Choosing a reputable lender with exceptional customer service can offer valuable assistance throughout the borrowing process.

 

 

How Can a business improve its chances of securing funding?

 

1. Maintain Strong Creditworthiness: One key factor lenders evaluate is your credit history. Ensure timely bill payments, maintain low credit card balances, and avoid excessive debt to boost your creditworthiness and increase your chances of securing funds.

2. Prepare a Solid Business Plan: A comprehensive business plan demonstrates your understanding of your market, industry, and financial management capabilities. It should encompass detailed financial projections, market analysis, and a clear growth strategy.

3. Build Relationships with Lenders: Consider connecting with potential lenders through networking events or industry associations. Establishing trust and rapport can improve your chances of loan approval when you need financing.

4. Provide Necessary Documentation Promptly: Be prepared to furnish all required documents like financial statements, tax returns, bank statements, and other pertinent documents. Displaying organization and responsiveness throughout the application process can reflect positively on lenders.

 

What are government grants for a business?

 

Federal and provincial grants and programs bolster small businesses, with funds allocated for diverse purposes like research and development, expansion, or job creation. Moreover, they frequently provide low-interest loans or loan guarantee schemes to stimulate small business lending. Canada's SR&ED program and the Government SBL Loan program are the 2 most widely used programs.

To capitalize on these government grants and programs, you need to research the options in your locality and scrutinize the eligibility criteria. Since these grants usually come with specific prerequisites and deadlines, forward planning and comprehensive applications are key. Many grant programs have ' matching ' criteria.

Exploring unconventional funding avenues and government loans and grants can uncover new funding opportunities for your small business. These sources can offer access to funds that might be unreachable via traditional lenders. It's beneficial to evaluate these alongside traditional loans to discover the ideal solution for your business's requirements.

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

Small Business Financing In Canada

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Working Capital and Financing Options

Small business financing in Canada ' should ' mean that your company has access to all the working capital you need to both run, and grow, your business .

At 7 Park Avenue Financial we believe that is not impossible, but the business owner and his or her financial manager must have a solid understanding of the options and your company's ability to qualify for and execute on the option or options that make the both sense . Note that in some cases it might make sense to cobble together more than one option to achieve that ' cash flow nirvana' you are looking for .

The business reality is that cash flow doesn't discriminate - both companies in looking for SME COMMERCIAL FINANCE solutions, all the way up to the largest corporations need access to cash flow options. The challenge for smaller firms is that business finance loans are often more limited to the smaller company. So it's therefore important to know what those options are!


Accessing the cash flow challenge might be easier than you think . More often than not smaller firms though have the challenge of locating the expertise and resources they need to evaluate the business finance conundrum.


Two key elements of your first step to what we call 'working capital assessment 'are your gross margins and your turnover. That’s the big problem we have with text book / academic solutions to working capital - they point you to the text book calculation - give you a formula which essentially has you subtracting current liabilities form current assets, and voila ! the inference is you have working capital . However, our clients have never paid a supplier or completed a company payroll with a ratio!

Many firms have an ' inventory component ' to their business - These companies are typically non service type firms , which often are less capital intensive.

To properly assess your working capital needs focus on understanding your turnover - how much inventory do you carry, what are the days outstanding in inventory, and as importantly, or more importantly, are your receivables turning over .

Business experts tell us that for many firms 80% or so of the total of all the business assets you have are tied up in A/R, inventory, and, on the other size of the balance sheet let’s not forget accounts payable .

It is possible to have financial business financing success based on your new found knowledge and analysis of your cash flow and asset turnover.


Canadian business financing solutions to small business finance loans really revolve around a couple viable solutions. Typically, in our experience Canadian chartered banks cant satisfy your business working capital needs - if only for the reason that they rarely finance inventory and require significant merit in your overall financials, profitability, external collateral, personal credit worthiness, etc .

Solutions To Business Finance In Canada

 

There are very viable options that have the potential for a 100% turn around in cash flow :

A total working capital solution can be achieved by a they working capital finance solutions such as a non bank asset based line of credit. This solutions monetizes your accounts receivable and inventory into one borrowing facility .

This is commonly called an asset based line of credit that provides high leverage margining on all you business assets.


Other solutions, still as viable , yet somewhat misunderstood are securitization, and purchase order financing of new contracts and orders. (Your suppliers are paid directly for the orders you have in hand - what could be better than that?)

One of the most active types of ' instant small business financing ' Finally, coming up the road at lightening speed is factoring and invoice discounting. We mention them lastly but they are probably the most popular method, gaining traction everyday. Our favorite is confidential invoice financing, allowing you to control your financing .

Recommended A/R Small Business Financing : 

 Confidential Receivable financing, allowing your company to bill and collect your invoices in a normal fashion , turning current and future sales into instant cash flow.

We have identified several ways to determine the need for proper business financing ; we have outlined a number of solutions that will take the guess work out of working capital.

These loan and financing options are available with a bit of research and/or help from a trusted , credible and experienced Canadian business financing advisor who can provide you with timely and valuable assistance in your cash flow needs .




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


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

Looking To Fund Your Business ? 5 Tips On Start Up & Small Business Finance Companies And Banking In Canada

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Information on Small Business Finance , business finance companies and banking in Canada

It sometimes seems that when you're bigger things always seem a bit easier - not always but most of the time.

That’s why when you are looking to fund your business and you're a small to medium sized business owner or financial manager knowing which firms and finance companies are appropriate to deal with seems like a challenge. And business banking from a borrowing perspective seems like a huge challenge.

And another thing, if it’s not all the time, it’s sometimes, because at certain points in your company's growth and history you are looking for business funding of some sort. What are the options - who can you turn to? Never fear... real world advice is here!

Business financing to either start or grow your business is available in a variety of ways and solutions. Let's examine 5 key topic areas.

The number 1 solution, as perceived by many business people is banks and commercial credit unions. However, perception is certainly not always reality as many have discovered. However if you are in a position to demonstrate to the bank that your own pockets (i.e. your own money!) is committed to the business then they are certainly a good place to start.

Want to know who we think is the absolute best bank in town? We’re sure you do, and here’s the answer, its one that houses a banker who is committed to grow and understand your business.

One of the best programs offered by the bank is co sponsored by the government, it’s the SBL loan program, providing you with great rates, terms and structures, and even limited personal liability for the financing.

Point # 2 -There isn’t a day when we don’t get a call asking us for some assistance on government grants. There are probably hundreds , if not more , of government grant programs - our own opinion is that they are often difficult to qualify for and at the same time chances of approval on non repayable funds is , suffice to say, slim . We will add though that the SR&ED program is probably the best program in this area, although its not a grant per se. Check it out though if you feel you qualify.

Grant programs are often targeted to very specific cultural or environmental issues , and many come with strings attached, such as matching funds only, etc.

So focus on getting sources of capital to borrow, not give you!

Point # 3- Talk to a Boy Scout. That’s because that organizations motto of ' BE PREPARED ' runs very true in business. Your ability to present yourself, your background, your historical, present and future financials is critical to obtaining business financing from finance companies and banks in Canada. Many clients seem either overwhelmed with how to do this properly, or quite honestly just aren’t qualified. We are all experts inn our own area of expertise, right?

Solid professional assistance from your accountant or Canadian business financing advisor is steps away, and at a nominal cost, all things considered.

Tip # 4- We all know whats in it for us when we borrow funds in a banking or non banking facility. But whats in it for the lender? Never forget that point. Finance companies in Canada are based around risk and reward. Most business owners don’t realize that business financing in Canada is available from a rate of 3% per annum to 3% per month. All types of assets can be financed or monetized. Companies in bankruptcy proceedings can even borrow at low rates. It’s all about the assets, the rate of return, and how you put together your business funding request.

Tip # 5- Always is prepared to deliver on some level of owner equity, i.e. your own contribution into the business. That can be via a cash injection, retained earnings in the business, or assets that aren’t already collateralized.

So, Canadian business financing . It comes in many forms. Receivable financing, equipment finance, working capital cash flow loans, asset based lending, franchise financing, tax credit finance, etc.


Speak to a trusted Canadian business financing advisor on how to fund your business, and which finance companies and banking partners are appropriate for you.







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


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

Looking for Small Business Financing? Consider An Account Receivable Financing Strategy

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Could account receivable financing help your firm? The dramatic rise of small business financing in accounts receivable ( by the way, Canada's largest corporations use this tool also!) Is simply a factor of companies such as yours wanting to capitalize on the working capital and cash flow that is, in effect, locked up in receivables

It doesn't take rocket science for any business owner of financial manager to figure out that if his or her firm has investments in receivables and inventory then those assets, typically called ' current assets' requires financing in some form. Of course you can ' self finance ' - meaning simply wait for your inventory to turn into receivables, and then wait probably even longer for A/R to turn into cash. But, doing that forces you to give up on sales opportunities and challenges the very core of your financial health, given that we all agree cash flow is king.

If you are fortunate enough to be financing via a Canadian chartered bank you are of course familiar with ' collateral '- our banks do a great job of explaining that to you! Why don't you use your own firm's collateral, its assets, mainly accounts receivable, and monetize that asset into cash.

Clients are often fairly clear on the benefits of account receivable financing, which is also called invoice discounting or factoring. What they don't seem to have the best handle on is how it works.

One you have such a facility set up it quite frankly is one of the easiest and quickest ways to unlock cash flow and working capital on a daily, weekly, or monthly basis. The power to choose your timeframes remains with yourself. And by the way, you only pay for the financing you are using. Let's get back though, to how it works.

In Canada there are two types of factoring, we'll focus on the most common one, which, by the way, isn't exactly our favorite (there is a better one) but let's keep it simple for now.

After your firm generates an invoice you submit it to your factor firm partner. That could be once invoice, several, or many or all. Funds for those invoices are wired, or sent to you, that same day into your account. Didn't you just feel your cash flow being totally unlocked and flowing?! Approximately 10% is held back as a buffer, but as soon as your client pays you get those funds back also, less what is known as a discount fee, typically between 1 and 3% - 2% is pretty well the norm.

2% you say! Isn't that expensive for small business financing. Absolutely, positively maybe, but we actually don't think it is. That is because all in rates from your bank when you total up all the fees, services, standby fees etc often total in the 11-12% range, not the 6% or 7% you think you are getting. And furthermore, if you take the huge amount of cash you just receive and use it to purchase more efficiently, or takes discounts on supplier invoice payments you make your total cost of capital goes down. And, another point, if you are in a competitive environment, (who isn't) does your ability to have unlimited cash flow put you steps ahead of your competition? We think it does.

There are a number of ways to finance your business. If your firm has A/R assets and you are challenged by the timing in which money flows through your business then consider the benefits of account receivable financing. Speak to a trusted, credible, and experienced business advisor on this popular financing tool for small business financing in Canada.





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


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



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


Article Source: http://EzineArticles.com/5144522

A ‘ How To ‘ Primer On Canada’s Government Loan . SBL Small Business Financing Makes Sense

Industry Canada sponsors, but does not administer the SBL small business financing government loan program. Government initiatives are solid source of start up and growth capital for thousands of start up and medium sized firms in Canada. The government small business loan is suited perfectly to provide you a source of funding you might otherwise not be able to achieve.

We also might add that many clients approaching us for assistance and info on financing often ask about ' grants ‘, or info on Community Futures funds . These two programs are also a source of Canadian business financing, but not one we'll be discussing today.

First things first in our ' how to ‘... and that’s simply that Canadian business owners and financial managers need to understand the government is the guarantor of the loans, but not, we repeat ' not' the administrators of the ' SBL' (Small Business Loan) program. That clears up a lot of confusion for our clients, who often mistakenly perceive having to deal with the government on a loan as potentially being somewhat bureaucratic. That’s not the case.

So who does administer and run the program - you might have guessed by now that is our Canadian chartered banks, and some other miscellaneous institutions, but primarily the banks. Adding to the confusion is often the perception that the government crown owned business bank, commonly know as ' BDC ' offers the program. Would make sense right? Guess what, they don’t have anything to do with the program.

The basics of the program are simply that your firm can finance up to $ 500,000.00 under the government guarantee to the bank. (In actuality the government guarantees 90% and the bank assumes a 10% risk scenario) However, you need to understand the500k limit pertains only to real estate; typically the cap on the program is 350k.

What can be financed under the program? It's not as broad as you think. Items financed are essentially equipment, leaseholds, software, etc; the bottom line is assets and software .A major mis conception we often have to explain to clients is that cash and working capital is not part of the program.

Terms? They are great. Really great. Rates are only several points over bank prime , terms can be up to ten years, and oh yes, guarantees, only a limited guarantee is required by the business owner, you in fact are not required to co sign or guarantee all of the loan . We can categorically assure you that thousands of others business in Canada do have the owners personally signing for the full amount of the loan.

Pre payment? Although we find many business owners in Canada ask us about pre payment the reality is that most loans probably run to maturity. But if you did choose to pre pay this is one of the only business financings in Canada that you can pre pay without a penalty.

To qualify for the loan the business owner must have a reasonable personal credit history, some element of a down payment to cover the 10% which the bank is on the hook for, and of course a solid executive summary or business plan that is typical of any business financing request. These can be prepared efficiently for a low cost by a trusted , experienced and credible Canadian business financing advisor, who can steer you through the ' how to's ) of the Canadian government loan for small business financing . You'll want to investigate the SBL!




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/how_to_government_loan_small_business_financing_.html

The Power Of The Government of the Canada small Business Financing Loan - SBL 101 !

Power - The dictionary defines it as the possession of control. You want it? We're going to give it to you as it relates to the government of Canada Small Business Financing Loan... we affectionately call it the ' SBL ‘! (That’s small business loan by the way ...)

So clients are always asking whats so great about the program? We'll give you thing things, actually four! Rate, term, structure, and by the way, a very limited (in our opinion) personal guarantee.

Industry Canada is the government agency that sponsors this great loan program. We're sure the department is staffed by some great people - it must be, because it’s a great program, right? However, you are never going to really meet these folks, as the government has chartered the Canadian banks and other miscellaneous financial institutions to run the SBL loan program on their behalf. So essentially its small business financing at the street level, which is right where you want it.

So how does the program work...? In fact an even better question might be why this type of financing should appeal to your firm.

The bottom line is that your firm is a ' for profit ' (we’re all for profit!) company and are either a start up or revenues under 5 Million dollars then you are a prime candidate for a government SBL small business financing loan.

So why banks don’t just makes these types of loans without all the government backing. Simply because (and we think you might have experienced this already) you might not qualify for what us folks in the real world of Canadian business financing call ' traditional financing '. Traditional of course refers to borrowers who are viewed as strong applicants because of high net worth, ultra solid personal credit history, strong balance sheets, and outside collateral. Who wouldn’t have problems coming up with those these days?!

The Canada Small Business Financing program in fact is very specifically designed to appeal to borrowers such as yourself who perhaps might not qualify for the traditional financing and criteria we've just spoken about.

I don’t think we have ever had a client meeting where the question ' how much can we get?" comes up. Our answer, plenty! If in fact you think 350,000.00 $ is plenty - we do. That’s the current cap on the program - but we'll share a tiny secret here, if you were to utilize the program for a real estate purchase for your business the program caps out at 500,000.00$ . Wow!

Sounds great so far? We have always thought so, so bringing new converts on board is a pleasure. Seek out a trusted, credible and experienced Canadian business financing advisor. You'll then focus on how the program works, if you qualify, next steps, structure, and finally, your approval!

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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/sbl_loan_government__small_business_financing.html

Looking for Small Business Financing ? – Consider An Account Receivable Financing Strategy

Could account receivable financing help your firm? The dramatic rise of small business financing in accounts receivable ( by the way, Canada’s largest corporations use this tool also!) Is simply a factor of companies such as yours wanting to capitalize on the working capital and cash flow that is, in effect, locked up in receivables

It doesn’t take rocket science for any business owner of financial manager to figure out that if his or her firm has investments in receivables and inventory then those assets, typically called ‘ current assets’ requires financing in some form. Of course you can ’ self finance ’ - meaning simply wait for your inventory to turn into receivables, and then wait probably even longer for A/R to turn into cash. But, doing that forces you to give up on sales opportunities and challenges the very core of your financial health, given that we all agree cash flow is king.

If you are fortunate enough to be financing via a Canadian chartered bank you are of course familiar with ’ collateral ’- our banks do a great job of explaining that to you! Why don’t you use your own firm’s collateral, its assets, mainly accounts receivable, and monetize that asset into cash.

Clients are often fairly clear on the benefits of account receivable financing, which is also called invoice discounting or factoring. What they don’t seem to have the best handle on is how it works.

One you have such a facility set up it quite frankly is one of the easiest and quickest ways to unlock cash flow and working capital on a daily, weekly, or monthly basis. The power to choose your timeframes remains with yourself. And by the way, you only pay for the financing you are using. Let’s get back though, to how it works.

In Canada there are two types of factoring, we’ll focus on the most common one, which, by the way, isn’t exactly our favorite (there is a better one) but let’s keep it simple for now.

After your firm generates an invoice you submit it to your factor firm partner. That could be once invoice, several, or many or all. Funds for those invoices are wired, or sent to you, that same day into your account. Didn’t you just feel your cash flow being totally unlocked and flowing?! Approximately 10% is held back as a buffer, but as soon as your client pays you get those funds back also, less what is known as a discount fee, typically between 1 and 3% - 2% is pretty well the norm.

2% you say! Isn’t that expensive for small business financing. Absolutely, positively maybe, but we actually don’t think it is. That is because all in rates from your bank when you total up all the fees, services, standby fees etc often total in the 11-12% range , not the 6% or 7% you think you are getting . And furthermore, if you take the huge amount of cash you just receive and use it to purchase more efficiently, or takes discounts on supplier invoice payments you make your total cost of capital goes down . And, another point, if you are in a competitive environment, (who isn’t) does your ability to have unlimited cash flow put you steps ahead of your competition? We think it does.

There are a number of ways to finance your business. If your firm has A/R assets and you are challenged by the timing in which money flows through your business then consider the benefits of account receivable financing. Speak to a trusted, credible, and experienced business advisor on this popular financing tool for small business financing in Canada.

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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 6 years - has completed in excess of 45 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details:
http://www.7parkavenuefinancial.com/account_receivable_financing_small_business.html

MICROCREDIT, and me ..

The Globe and Mail had a great article written by Anna Paperny today on ' MICROCREDIT ' - I have been hearing about this term for a couple of years now, a lot of times the term seems to be used in connection with third world countries . The premise is very simple, and unbelievably, seems to be a powerful winner . It is simply the process of providing small , ( very small ) loans to small business owners and underprivileged people who utilize the loans to become self sufficient in a small business . The great news is that it's not some community bank or something like that, but its ROYAL BANK OF CANADA - RBC , behind the program in Toronto's ' tough' Regent Park area.

I continually write about small business financing, but this is ' small ' at it's best .

Stan