Start Up Business Financing For Assets In Canada : Where Does Funding Your Startup Begin ?

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Use the relationship between sales and receivables to measure your operating results and the
investment you have in receivables. Create a simple spreadsheet to show credit sales at the end of the quarter divided by a/r outstanding. You will have a solid understanding of your efficiency in collecting your accounts and it can help identify external financing needs such as A/R financing requirements.











How To Win At Start Up Financing In Canada

OVERVIEW – Information on start up business financing in Canada. Funding start up business asset requirements is often achieved through equipment leasing but this options is not always available – one other alternative is












Start Up business financing in Canada . We are often asked by clients how assets can be financed in the startup funding stage. One obvious solution is generally not achievable, and you may have not considered one other option... which... works! Let's dig in.

Canadian entrepreneurs who have committed some of their own personal capital to a business will almost always need to add additional financing to any new business launch. One of the most obvious asset financing ' go to's' in Canada is equipment financing.

But can equipment leasing satisfy the needs of business owner if a business is new, in start up mode, or very early stages of revenue generation. The answer? More often than not... it can't.

So why does the equipment lease solution not work for a start up. The answer to that lies in the approval process and criteria of Canadian lessors. That's because historical and present cash flow are often a key part of the approval criteria for an asset loan. Notwithstanding the fact that an asset is also the collateral a very large emphasis is placed on ' cash flow ' analysis for transactions that are deemed no longer ' small ticket'.

By the way, although it might be a mystery to some as to how the lessor calculates that cash flow it shouldn’t be, so in effect potential lessees can pre-qualify themselves by understanding that cash flow analysis formula. The lessor will more often than not take you net income, add depreciation, and that amount must typically cover 12 months of your lease payment in a positive manner, with hopefully some left over for other needs. So now you know!

But all our discussion here has not provided an answer for the entrepreneur who needs assets to finance a business in start up mode.

So one solution that we constantly recommend to clients is a Canadian Small business loan, formally called the BIL, or CSBF program. We throw in our own acronym. The ' SBL '.

When traditional financing requires strong outside collateral or other compensating matters the SBL loan requires only your ' promise to pay '. Oh and by the way, that promise is even limited in some extent, as the guarantee required is only 25% of the total financing you receive.

Key benefits of the program are:

Competitive rates
Long amortizations if needed - (5-7 years)
Limited 25% Personal guarantee of owners
No repayment penalty
No outside collateral required

All business assets, including technology assets and software, as well as even ' leasehold improvements can be financed under the program. Frankly you can even buy an existing business also under the same program.

Sometimes the obvious just doesn't work in business. So while the experts tell us that over 80% of all businesses in Canada utilize lease financing startup firms can rarely achieve the financing they need in this manner.

Consider the SBL solution and seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can help you ' win' the start up challenge.





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 Start Up Financing Expertise





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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

What Type Of Start Up Business Financing Loans Are Available For A Canadian Company ? Startup Loan Info

Solving the startup financing challenge in Canada


Information on start up business financing in Canada . Starting a company? What type of loan/loans are available , and what do you need to do to successfully complete a startup finance strategy that makes sense.




We're all for hard work and facing challenges, but boy do we respect anyone setting up a business today and looking for start up business financing . What type of company loan/ loans and finance facilities are available for the Canadian entrepreneur?

We can pretty safely say it’s always been tough to finance a start up but in more challenging economic times you can easily assume a hard job just got harder. So what types of financings are available to Canadian entrepreneurs, and as importantly, what do you need to do to get properly prepared to complete loan/loans?

Many of our clients cringe when we ask them for their business plan - its seems a daunting task for many, and certainly doesn’t have to be. Even a very strong executive summary will often do the trick - information about yourself, your background, your new business, and, most importantly, what we call the financial potential. That potential of course relates to being able to pay back your borrowings!

Want to overcome obstacle #1 then, that business plan. Simply speaking, get someone else to do it, an experienced, credible and trusted Canadian business financing advisor. That recommendation can come from a business peer or friend, a banker, or your lawyer and accountant. These people are on the front lines of start up business financing for your company and others.

So what are some of actual borrowings available for start up Canadian companies? They include the Government small business loan - commonly called the SBL. Another government crown bank provides working capital loans that are true cash loans that are in effect unsecured - they require only your promise to pay, and of course that of your new business .

Other methods of financing your start up include receivable financing, aka ' factoring ', which provides instant cash on every sale you make, albeit at a cost. But ask yourself this, whats more important to you at this time, ' the rate ‘or access to capital? In the majority of cases we think its access to capital. Many firms that are retail or consumer oriented have gravitated to merchant cash advance financing, in effect loans made against your future sales. (A little bit of every future sale is used to repay you loan).

Having realistic sales and cash flow projections often makes or breaks the new start up in Canada. The reality is that many clients we meet with bring us unrealistic sales projections, and, on top of that those projections don’t have realistic cash flow attached to them.

Case in point, the business entrepreneur shows revenue of 100k cash coming in of 100k in that same month. Guess what though, it’s not a perfect world, and the reality is that cash, if you are selling to a business, will come in stages in 30, 60, and we shudder! even 90 days. So get realistic on cash flow, and have your plan B ready!

Many physical assets you need can be financed via Canadian lease financing. But be careful to ensure you have the right type of lease in place, and that the rates are commensurate with your overall credit quality, and that the terms and structure of the lease... you guessed it... make sense! (Don’t lease computers for 7 years!)


Many clients we speak to don’t realize the 100% OPM doesn’t work .OPM is of course ' other peoples money ', and Canadian business owners need to address the fact that they require a reasonable personal investment into the business. Whats reasonable? That question comes up pretty quickly !There is no one single answer ; as an example the government SBL small business loan requires a 10% equity injection by the owner . In the cases of lease financing 10-20% down typically are reasonable requests from the lessor.



So whats our bottom line if start up financing in Canada. First, its boy do we respect your entrepreneurial spirit! But pay attention to those details we have discussed, and seek the services of a trusted Canadian business financing advisor who can make that road you have not traveled before a much more pleasant journey, and distance!



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/start_up_business_financing_company_loans_loan.html