Sources Of Capital In Canada . How About A Side Order Of Business Funding

Would You Consider New Sources Of Capital If You Had Choices?

OVERVIEW – Information on sources of capital for business funding in Canada . What does the weight of evidence suggest around your needs for new financial solutions



Sources of capital . It's a reality need for businesses that are growing , or wishing to survive. . The capital in a company of course comes from the owner or borrowed funds. Generally speaking business owners prefer to borrow rather than sell equity in the company, as that sale of equity dilutes the ownership position, i.e. they own less of the pie! New equity can come from friends and family, venture capital firms, and angel investors. These parties are looking for good management, integrity, owner financial stake, and growth potential.

However, in the current difficult financial environment many lenders are in fact insisting that business owners put more of their own money into the company. There is never an easy answer when it comes to the debt or equity question.

When businesses borrow funds there is a cost to that capital - as interest on that debt reduces over-all profits. New equity in the company of course does not reduce those earnings, however the profits are distributed more widely and the earnings are proportionately reduced.

Borrowing funds of course comes with risk, as those loans must be repaid. Business owners sometimes get caught in the trap of financing long term projects with short term money - they are therefore at the mercy of having to always roll over that debt, and potentially also seeing rates go up, sometimes dramatically. Also, a business can carry only so much debt, at which point cash flow becomes a potential problem if the company is over leveraged.

Currently rates are very low for businesses that have access to capital. Therefore in many cases it might make sense to lock into longer term loans in the current attractive rate environment.

When the business owner has made the decision to purse business loans the old Boy Scout model works very well - BE PREPARED! Business owners that do their homework will usually be successful. Let’s not forget the banks and finance firms are actually in business to loan funds. Naturally collateral, or additional collateral certainly improves the chances of debt financing success and loan approval.


Debt and equity financing as a sources of capital should be used for the right reasons - expansion, seasonality of business, increased inventory and working capital that will increase sales. Funds that need to address business inadequacies such as poor management, financial losses, falling sales, etc are very difficult to come by! Financial solutions for growing companies includes:

A/R FINANCE

EQUIPMENT FINANCING

WORKING CAPITAL TERM LOANS AND CASH FLOW LOANS

ASSET BASED LINES OF CREDIT

COMMERCIAL BANK FACILITIES

TAX CREDIT FINANCING

SALE LEASEBACKS AND BRIDGE LOANS

SECURITIZATION AND MEZZANINE FUNDING SOLUTIONS

In summary, business owners should carefully consider the positive and negative effects of additional debt or equity capital. Once they have made an informed decision, either on their own or with a trusted , credible and experienced Canadian business financing advisor they should consider the cost of that capital and how it is best achieved via alternate financial solutions for business funding .




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 :

CONTACT:
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















Stan Prokop

Business Financing Challenges ? How Are You Solving The Problem Of Sources Of Capital And Finance In Canada?

What Seems To Be Your Problem .. When It Comes To Business Finance

OVERVIEW – Information on business financing and sources of capital in Canada . How do business owners address the issue of what type of finance makes sense depending on their stage of need and development ?



Here's a question. Are you getting any? What else could we be referring to other than your business financing? In the case of Canadian business it pretty well always comes down to the fact that your company is in a stage , and that stage of development pretty well dictates they type of financing you need, the type of financing you can get, and the amount involved . No mystery there.

So when we sit down with clients and talk about their current failures in raising capital or monetizing assets what seems to be the problem? Do you want to know the answer to that question? We think it’s because a solid majority of business owners and financial managers aren't able to match the sources of capital with their actual needs. Or even more basic, who to turn to when they need some help in making that match.


One glaring mistake we often seem is that many businesses are focused on venture capital and private investors / angel investors, business incubators, etc. The amount of financing that is done in this area is minute compared to the other debt and asset monetization solutions that are in fact available. Sorry to burst your bubble on that one.
The major differentiator in business financing that’s available, as we’ve hinted, is whether your first is in start up or early stage, or if it in fact up, running, and growing. While certain types of non bank financing might seem expensive at times the reality is there is nothing more expensive than giving up equity ownership.

We would say though that for many medium sized firms that are growing, profitable, have good niches, etc that solutions such as an IPO or reverse take over might in fact make sense. In a perfect world, (and we know it’s not) the reality is that successful business financing comes when you have the right mix of capital without giving up any levels of flexibility and ownership.


Can we offer up some solid tips of just conceptually being ‘successful ‘when it comes to business finance in Canada? Consider this: just spending some time on learning ‘the lingo ‘in some of the different types of financing you consider is worth the time. You then will of course be less intimidated. Secondly, look for some of the hidden costs in any financing solution that’s proposed or offered up. Thirdly, look at any source of capital or financing as a journey, without losing track of the big picture. Many of the solutions we work on are in fact intermediate and the business owner and manager forgets they aren’t locked in to any solution forever. So in summary we’re talking about getting to know your sources of finance as well as the techniques and attitude you need to adopt in closing those deals.


Are we able to provide a concise list of sources of capital and financing for the busines owner to consider? We think we can come pretty close. Assuming we are out of the start up phase consider and investigate the following:



The Canadian Govt SBL loan
Equipment financing
Asset based loans
Commercial bank lines of credit
Royalty/Contract Financing
Receivable financing
Inventory Financing
Asset based lending
Tax Credit monetization
Supply chain/PO finance
Unsecured Cash Flow Loans
Mergers
Capital Pool Companies



All of a sudden our comments about learning some of the ‘lingo’ around these might make a lot more sense, right? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with you in completing your journey for business finance capital.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS FINANCING EXPERTISE


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/business-financing-sources-of-capital.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
































Stan Prokop

Don’t Make Mistakes In Sources Of Capital And Financing For A Canadian Business Loan. Debt Or Equity? What’s Best?

Financing Sources And Their Implications in Canadian Business Finance

Information on how the Canadian franchisee entrepreneur can be successful in franchise financing in Canada . Key elements for franchise loan approval .


You're looking for sources of capital and financing for you Canadian business. A Loan? An equity arrangement? A monetization of assets ? What works best is of course the nagging question that continuously faces Canadian business owners and financial managers.

Many Canadian businesses who contemplate equity type arrangements simply aren’t ready, and it’s also the most expensive form of financing when you consider the ownership dilution that comes with that strategy.

There is usually never an easy or obvious method to get rid of financial challenges. In fact if you're looking at bank financing, which is of course ' debt ' you may well find that the bank feels that more equity from yourself is in fact required in order to obtain that debt. That's a bit ironic sometimes!

Are there any tools available to help the Canadian business owner understand both the cost of debt and equity? There are, of course.

Whenever any Canadian firm looks for financing outside the business there is a cost to the owners. Naturally if you borrow in terms of term debt the additional interest financing costs reduce profits. Selling equity of course reduces no profit, but, and it’s a big one, ownership is proportionately reduced.

We are always preaching to clients that many forms of business financing outside of equity in act do not reduce earnings if in fact you're monetizing assets and have a healthy turnover in key areas such as receivables, inventory and fixed assets relative to overall sales. That’s why we're big proponents of strategies such as A/R financing, supply chain financing, asset based lines of credit, etc.

Earnings and cash flow analysis is a solid way of evaluating debt and equity alternatives.

What then are the key areas you should always focus on when it comes to debt vs. equity analysis? Some solid ones are overall risk with respect to your ability to make payments under any debt scenario.

And whether its debt or equity consider what flexibility you have with respect to any covenants the lender or equity partner might insist on. Always watch your leverage, there is only so much debt your firm can manage and handle.

The irony in either borrowing or looking for some equity is that you're usually in one of two positions, success, or failure! That one never escapes us, as we meet clients who are successful and have a need to finance new growth or expansion, of alternatively, they are currently losing money and have some real deficiencies in their company that need to be fixed.

When you are looking for debt you can be sure the lender will focus on working capital coverage, leverage, and operating efficiencies. Equity lenders will focus on management, growth potential, and why your business is unique.

If you want to properly understand available sources of capital when it comes to business financing, a loan, or an equity arrangement consider speaking to a trusted, credible and experienced Canadian business financing advisor.




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 . 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/sources_capital_financing_business_loan_equity.html