Need Business Turnaround Financing For Your Company? Canadian Solutions For Distressed Corporate Situations

Need a Refinancing Turnaround?


Information on business turnaround financing in Canada . Recognizing corporate distressed challenges and implementing proper solutions.




Business turnaround financing for Canadian firms is clearly one of the most challenging forms of corporate finance for those firms experiencing distress from either internal or external factors, more often than not a combination of both .

You can call it crisis management, turnaround management... whatever, bottom line, your company might need it. How then does a firm recognize that need, and what tools and financial solutions are available in Canada to implement a financial reorganization that makes sense.

Without a doubt it's about understanding both the causes and implications of company financial problems, and then implementing a solution.

When Canadian business owners and financial managers of companies in need of financing changes face their ' to do ' list a number of key focuses must be forged. They include restructuring your current debt, potentially downsizing your business, and addressing various legal issues with your current lenders, which might be both operating lenders and term lenders such as lessors, senior bank facilities, etc.

A common sense way of looking at things is to address some very basic questions, in effect:

What is going wrong and how must management take responsibility?

Do we have resources (i.e. assets) and financial assistance and expertise to begin and complete the turnaround?

Naturally depending on the size of your firm the challenge has different levels of complexity. Distressed situations can be addressed in either a ' strategic ' manner, or via an operating turnaround. Our comments are more focused on the operating turnaround... it’s the basics such as increasing sales, lowering costs, and refinancing assets.

In many cases new creditors must replace your current creditors. Again we emphasize that your current firm might be a start up, or one that has experienced tremendous growth and then stalled, , or in some cases your firm has been around a long time and financial issues simply have come to ahead and need to be addressed. All these firms require external turnaround management assistance, quite frankly, someone who has been here before.

At the end of the day it's about looking at your refinancing options which might include secured debt, bank debt, and other debt with commercial finance companies.

What then are potential solutions for corporate distressed situations? In Canada those solutions are debtor in possession financing; asset based lending, monetizing current assets via working capital facilities that include A/R and inventory and equipment components. Other less widely used options include securitization of contracts, tax credit financing, and supply chain financing.

Business turnaround financing is one of the most challenging aspects of Canadian business financing. Speak to a trusted, credible and experienced Canadian business financing advisor for solutions that make sense for your firm.




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/business_turnaround_financing_distressed_corporate.html

5 Other Myths About Canadian Government Loans . The BIL SBL loan Isn't What You Think!

You Need To Know This About SBL Loans !


5 Other Myths About Canadian Government Loans . The BIL SBL loan Isn't What You Think!



Canadian government loans. We wrote recently about key misunderstandings on the SBL loan program in Canada. We cleared up some myths, hopefully, and... here's some more!

Myth # 1- It can't get any better than this when it comes to misunderstanding. Many Canadian business owners and financial managers are under the distinct impression that if one bank declines your submission then all Canadian chartered banks might, or will do the same.

Here it's also necessary to step back a bit and say that the SBL BIL (Business Improvement Loan) is run my Industry Canada, the federal department branch. However on a day to day business you simply deal with your local banker or via an experienced advisor.

So back to our point, the reality is that if a bank did in fact not approve your submission another bank just well might. Of course we're making the assumption you have properly prepared, which unfortunately isn’t always the case.

This myth, if we can call it that, is one of our biggest ' bones to pick ' with the program, It's that each bank ' interprets ' and then underwrites the program in a different manner. Some even choose not to participate in the program at all, and worse, many do not train their staff to properly understand and explain the program to their clients. But we digress....!

It might be best in many cases to speak to an expert in this area to determine if in fact you are working with the right parties. Talk about saving you time and money!



Myth # 2- Are you guaranteed funding if you have a strong submission and a proper business plan and cash flow forecast. One that addresses the who, what when where and why scenarios as a good plan should. The answer, unfortunately, is no, there are no guarantees. Again, not our favorite way of doing things from our perspective, but each bank underwriter has their own interpretation of your business's success. In our opinion they might be biased about things such as your industry, your geography or location, etc, Suffice to say preparing a tight plan and anticipating all the questions and issues sure helps.

Myth # 3-The rates and terms and structures
offered by each bank differ even though it’s the same Canadian government loans program. The answer is simply no, there are no differences, and the rates are the same under the program, essentially 3% over prime. Where misunderstanding occurs is where each bank has different advance and down payment scenarios. The permanent equity down payment you need in such a loan by the way is 10%.

Myth # 4 - You only need 10% down to get approved and qualified. In theory, correct, in practice not correct! Again, different banks may require some additional working capital back up to help guarantee business success. And again, and not our favorite way of doing things, each bank is different.

And our final debunked myth? Many applicants think they need outside collateral or 100% personal guarantees or other guarantors on the loan, which by the way caps out at $ 350,000.00 as the maximum you can borrow. Not the case. The equipment and leaseholds and even real estate you choose are not collateralized by your personal assets. That’s a good thing.

Is the SBL BIL loan for you? We sure think it is, as long as you have the proper information. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you to ' debunk those myths and get you ... approved!




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/canadian_government_loans_sbl_loan_bil.html

Franchise Financing Canada . Four Things To Consider For Your Finance Loans

Are You Financially Savvy When It Comes To Financing Your Franchise ? Need Some Help?


Information on franchise financing in Canada . What are key considerations for franchising loans when entrepreneurs finance their business


Canadian would be entrepreneurs are very clearly jumping on the franchise 'bandwagon'. Whether they are current entrepreneurs looking to expand their investments and success, or downsized executives clearly there needs not be a lot of discussion on franchising popularity everywhere, and that includes our focus, Canada.

Could any business person, male or female not use some solid advice and mentorship on any one of the many aspects of this industry? We don’t think so, and our focus is on franchise financing in Canada. Simply speaking, achieving the finance and loans you require completing a transaction successfully.

As we said, optimism in franchising in Canada is everywhere, including positive stats on growth and the industry's participation in the economy as a whole.

Does that optimism translate into the availability of capital for financing the business? Let's cover off some key issues around that.

It's important to have a game plan when you enter into a franchise entrepreneurship. Focusing on those objectives in a precision like manner is key.
Is it possible to be familiar with every aspect of franchising that you need to know - we would submit that unless you are in the industry already that is not the case .

A good start might be two fold, first of all talking to a franchise broker or consultant who participates in the industry, and their services by the way are typically no cost to you. They are compensated by the franchisor. Naturally a word of caution is in order because many of these firms align themselves with only certain franchisors, and might not be in a position to expose you to all the opportunities and information you need.

Step two in your initial game plan might well be to talk to those people in our favorite profession, lawyers...! But seriously .. A well versed franchise lawyer will guide you through the pitfalls and legalities of owning your own franchise. The good news here is that the industry is very transparent and a lot of the rules and regulations are heavily focused on protecting you, the franchisee, when it comes to disclosure from your perspective franchisor, etc.

So let’s cover off our promised 4 key information points. Number one is simply that you need to assess the overall risk and return in your investment. While 95% of franchisees success according to many stats, you want to ensure you are not in the other 5%. Here is where you need to spend a decent amount of time on financial prospects, cash flow analysis, and measuring overall chance of success relative to the financial investment you are prepared to make as your equity contribution in the business. Suffice to say that aligning yourself with a successful and well run franchisor sure helps.

That brings us to point # 2 today, the size of your investment .Franchise purchase prices come in all size, from small non asset service based franchises to large ' bricks and mortar ' opportunities such as full service restaurants . Spend a significant amount of time on your equity contribution, where that capital comes from, and the methods under which franchise financing in Canada occurs. They exist, but they are limited.

For instance in the U.S. a large amount of financing in the industry is done under whets known as a 401k rollover, essentially collapsing what we know as our RRSP's in Canada. That doesnt work in Canada, unless you want to be penalized by the tax bit on that one! We don't recommend that to clients as you can imagine.

Point # 3 - Finance options. In Canada there are limited options to finance your purchase, of either an existing resale or a new unit are limited. The good news is that those that exist work. You can work with a specialized franchise finance firm, take advantage of the government BIL program (which finances thousands of franchises) and compliment both of these with additional leasing and working capital scenarios.

Finally, point # 4... and it's a bit of a tricky one. Do you as a franchisee require experience within the industry that you are buying into? To be honest we are not 100% sure on that one ourselves. We all agree it would be helpful to have some background in the industry you are proposing to invest into, however, we have observed over time that solid management and marketing skills go a long way in any business. Even large corporations bring in people from outside their industry, sometimes....!

Don't underestimate the advice and info you can get from a number of sources when considering purchase and finance loans alternatives. Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in this regard. 4 Points ....hopefully well taken!




Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.

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.

Do Something Uncomfortable . Try ABL Finance As Your Canadian Asset Based Lending And Financing Alternative!

Canadian Asset Based Lines Of Credit


Information on ABL finance in Canada. Reasons why asset based lending is the new paradigm in Canadian business financing .



We can't speak for everyone but isn't it safe to say that either in our personal lives, or in business we're often reluctant to enter into a new situations simply because of the feeling of uncomfortableness. That's one of the reasons why Canadian business owners and financial managers might be reluctant to step outside their zone of comfort when it comes to looking at financing via ABL finance; an asset based lending arrangement for their new business line of credit facility.

We would maintain it’s hardly a risk, as an asset based line of credit revolving facility is becoming more mainstream and popular everyday.

In some cases it simply not knowing what an initial course of action might be. That's actually quite simple - investigate what ABL, how it works, what are the benefits, what are the costs, and finally get a sense of how and why it differs from bank facilities.

It's clear to most business owners that the Canadian economy is clearly improving over the challenges of recent years. That's why it’s critical that firms such as yours have the ability to secure sufficient funding to support their growth and survival. It has been that access to funding that has been one of the greatest hurdles

It's clear to many Canadian firms that capital is available, it's simply a case
of being able to access funding that in many cases Canadian chartered banks are reluctant to make available. Canadian bank facilities via commercial business lines are credit are clearly the low cost solution and can offer numerous other services such as cash management, forex, etc.

But what if traditional bank lines of credit are not available to your firm? Enter asset based lending! This is where that feeling of ‘uncomfortable 'might be setting in. Why? Simply because it’s different, in that it focuses solely on your asset and your company's ability to turn those assets into cash flow.

Why is ABL finance a better fit in many cases. We'll offer up simply the fact that it supports growth and a number of unique needs your firm might have.

Recent studies suggest that asset based lending grew over 25% in Canada over the last year or so. The vast majority of this activity is clearly the refinancing of existing bank lines and turning them into an ABL financing arrangement.

In Canada large cap ABL financing is very different from facilities sought by smaller firms. Larger facilities often start in the 5-10 Million dollar ranges and go into the tens and hundreds of millions of dollars. The same type of facility is also available to firms in the SME sector where these working capital faculties start in the 250k+ range. Talk about a broad spectrum.

And that broad spectrum translates into a wide variety of rates and deal structures.

There is a lack of information quite often to the SME borrower who has heard about ABL finance, wants to know more, and might think his or her facility isn’t relevant, if not for size alone. In our opinion the majority of Canadian business owners and financial managers are ' desperate' for quality information on Canadian business financing alternatives.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in both understanding and creating an ABL facility to turn your collateral into cash flow, quickly, and efficiently.





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.

The Real Truth On Canadian Film Tax Credit – Let Movie & Animation Financing Refund Loans Enhance Your Project

You already have the financing in place that it takes to make a winning film, animation, and TV project successful - you just might not know it.

We're talking about the Canadian film tax credit system, and why movie and animation refund financing of your tax credit can be the last piece of the puzzle in your Canadian production, or U.S./Canadian co -production.

The reality is, and of course we're sorry (kind of ...) that more and more U.S. regions are eliminating or downsizing the film and animation tax credits that can often make or break your projects final success. In fact, using Hollywood California as an example, as at June 2011 the state has in fact used up all their tax credits for the remainder of the year! No wonder why U.S. and of course Canadian producers and owners realize the Canadian system is still committed to job creation and support of the industry.

Ours has never been to debate the merits of the Canadian film tax credit (animation and TV included of course)... Ours has been to promote it and ensure our clients are using it. In Canada , aka Hollywood North the tax credits are viewed in all provinces as great economic and tourism development, and, as we said , we're not arguing!

In Canada the film, TV, movie and animation credits can generally get up to 40% of your project financed. That of course leaves the other 60% up to you, but what a great head start!

Although most producers and owners think of the Canadian film tax credit in terms of movies/ film etc. the Digital media area is probably growing the quickest. 6 of Canada's ten provinces already have a separate special digital media tax credit in place.

B.C. has a very strong and growing animation environment (could that be because of its proximity to California?!) and provides 17 1/2% credit to your total labour cost on any project.

While most U.S. and Canadian producers always tend to think in terms of Toronto, Montreal and Vancouver as major film and production and animation centres the reality is currently that the most lucrative digital tax credit is out of Nova Scotia. They have a very simple formula, 50% of expenditures that qualify under the legislation, or 25% of your total budget. Your tax credit accountant and Canadian business financing advisor can assist you in maximizing what works best for your project.

Quebec also increased and broadened its tax credits, with 25% of all expenditures qualifying for a Canadian film tax credit refund. When you compliment this with the federal Productions Services tax credit an additional 16% of financing becomes available.

Naturally there are all sorts of nuances in maximizing and qualifying for your tax credits. Producers should in general always set up a special purpose entity and typically should own the copyright or content.

Your tax credits in Canada can be financed, either through traditional sources, or independent firms specializing in this type of financing, also at the same time usually helping you maximize the credits. Financing is available on a ‘when completed ' basis, or, often more desirable, on an accrual basis as you start to spend on your project. Bottom line: Cash flow and working capital for your project.

So, as we said your challenge is equity, debt, gap pre -sales, etc. But let tax credits be the final component to your projects success.

If you choose you could creatively carve out the tax credit from your overall finance plan and enhance the equity position, of simply finance the credit refund on its own. Use your tax credit to either attract an investor, or as a stand alone component.

When you want the real truth and current dynamics of the Canadian film tax credit and refinancing strategies speak to a trusted, credible and experienced Canadian business financing advisor.

P.S. Mr. Demille - we're ready for our (tax credit) close up!

Cash Flow Problems Hampering Growth? Survival? Canadian Business Working Capital Solutions. Right Here Right Now!

Solutions To Your Biggest Financial Dilemmas


Information on business working capital solutions for Canadian firms who face cash flow problems arising from growth . Measuring the problem and addressing the solution !






When Canadian business owners and financial managers encounter cash flow problems several business working capital solutions are available.

One of them is very ' not ' obvious which is to stop growing. That's a tough one for the entrepreneur to swallow of course. but it's true. Stopping growth means that additional funds are not needed to maintain higher level of inventories, receivables, or the need to invest in new equipment.

When you are in a turnaround or crisis type situation is when it's of course the most difficult time to grow and expand your business. That's simply because pressure from secured lenders and unsecured trade creditors is at its height. And that's never comfortable.

Today it might seem like we are talking about the not so obvious, so another key point that we will offer up is simply the fact that when you're focused on only growth there is a lot of room sometimes to hide cost or other issues that might be being mismanaged in your company.

Again, tough to swallow, but when you increase sales, as we said, you increase the need for working capital. If you stopped growing and simply ran your business efficiently you will probably find you can free up cash flow and cease the pressures with your lenders and suppliers.

That's also the best time, again as difficult as it may seem, to focus on profitable business as opposed to ' volume ' type business. We can't help but be reminded about the old saying ' we'll make it up on the volume '. Our point, you never do!

So instead of sometimes only trying to focus on growth and revenue Canadian business might well do better to address raising prices, and, heaven forbid, reducing sales! This frees up your current assets, which is at the core of your cash flow problems, as they represent your business working capital.

When you think of it, we're actually saying you should be setting up a comparison model between your cash flow and your sales growth.

Many businesses in Canada, (perhaps not tech type business) would be very happy with a ten percent year over year sales growth. Let's say you were focused on growing at 25% this year, a huge increase by any measure. However, profits and cash flow and working capital don't move lock step with those sales.

While profits on paper might show up nicely it’s the changes in your current assets you should be focusing on. Here is where you want to ensure that A/R is also rising at the same rate. This is not the time to be offering extended trade credit to your clients.

So, what have we focused on ?Just the basics, which are that in today’s case management and controlling growth have a huge effect on business working capital .

A perfect world just may exist when you're growing sales and addressing profit and cash flow issues at the same time.

Solutions for cash flow problems in Canada include asset based lending, receivable financing, mezzanine debt, purchase order/contract financing, and even monetization of your tax credits.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in the need for proper business working capital.





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.

Discover Why Leasing New And Used Construction Equipment Works. Lease Finance Equals Financial Flexibility !

A Solid Financial Strategy For Your Company’s Asset Needs




Certain types of asset classes lend themselves to maximum flexibility and maximum benefits when it comes to lease finance. Leasing new or used construction equipment definitely falls into that category.

The acquisition of these sorts of heavy ' yellow iron ' type assets ebbs and flows with the economy, and the Canadian economy has clearly ' righted' itself after several tough years.

The attractiveness of this type of financing is that it is applicable to all asset types and firms with different levels of credit quality. It's of course all about getting ' approved ' and using those assets to generate revenues and profits.

In many cases firms acquiring such equipment might be in the SME sector, even start ups. Therefore the general credit history of the owners is always on the table as a discussion point.

Lessees of other types of equipment might be surprised that lessees of new and used construction equipment can easily get approved despite a negative credit history.

The reason? Simply that these types of heavy equipment assets generally have a solid resale value, and in many cases hold significant value years later. That certainly isn’t the case in Computer and technology leasing, where assets quickly devalue as technology changes.


Owners of firms in the construction and heavy equipment area quickly recognize that lease finance is simply a very effective use of capital, and that capital translates very quickly into cash flow conservation.


When Canadian business owners and financial managers are looking to acquire, and lease these ' yellow iron' type of assets they need to consider three key factors.

First of all the type of lease they choose is important. It's at this time they need to consider the issue of ownership, i.e. who will own the asset at the end of the lease term. The majority of leasing we see in this area of the economy has the business owners and managers opting for a ' lease to own' type strategy. Title would only revert to the leasing company if your firm was unable to make payments and defaulted.

Understanding the real cost of a lease is critical to equipment finance success. That's our 2nd key point. Knowing the rate, and in particular how it's calculated can make or break some of the financial benefits of your lease transaction. Leasing companies in Canada can employ several ' tricks ' ( maybe we should call them pricing strategies!) to improve their yield, so be cautious of down payments, whether payments are calculated in advance or arrears, and how your purchase option figures into the total pricing.

We maintain there is no real difference, from a financing perspective, if you choose a new or used asset. In some cases your firm simply might have access to a great deal on a used piece of equipment, so financing that ' good deal ' makes even more sense. We do not agree with some that maintain it's difficult to lease used construction equipment. It can easily be done!

Pricing in your transaction will depend on your firms overall credit quality, and the industry in Canada divides itself nicely into different tiers of pricing, credit, and asset quality.

Firms with lower overall credit quality can expect some form of down payment, or perhaps a shortened amortization on the term of the transaction.


When you choose lease finance you are making a trade off between financing costs and conservation of capital. For most businesses in the SME sector conservation of capital becomes priority one and leasing wins that decision.

So there you have it. Whether you are looking for trucks, excavators, bulldozers, all other ' yellow iron ' your asset finance needs can be satisfied.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your new and used construction equipment finance needs.







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.