What’s New … And Working When It Come To Business Funding? Creative Financing 101!

Looking For Business Financing Creativity?

OVERVIEW – Information on business funding sources in Canada . The right combo of creative financing from traditional and non traditional sources will get you the capital you need


Business funding in Canada. We have remarked on more than one occasion that the landscape has dramatically changed over the last number of years.


Frankly (perhaps it's because we're getting older?!) we can barely remember the days when options seemed almost unlimited and everyone was saying ' there's too much capital and too little deals '. Yes, the government and banks seem to have a party line about trying to help, and while interest rates are at rock bottom lows the amount of funding out there, either traditional, or in the area of ' creative financing' seems somewhat limited to the Canadian business owner or financial manager.

We think the banks and the government would say that the amount of funding solutions out there is still the same, the reality is that they are simply harder to get approved for, at least for the amount of capital you need.

So where does the business owner/manager start? Let's explore some of the more creative ways to fund your business, whether you are a start up or established company.

Start up businesses of course seem to have the biggest challenge. They are typically funding via a ' bootstrapping' method revolving savings, home collateral, and friends and family loans. They all work, but they are just not that desirable!

Naturally not being aware of the other more traditional or creative ways to fund your business hampers any chance you have for success, let alone growth. At the end of the day you need the right amount of debt and the right amount of equity to make things work.

Many business start without a plan, and in business that is of course the ' business plan ‘. We always tell clients that even if they don't need a plan for financing purposes (you usually do though!) you should have your own ' flight plan ' in place for your business, and that document does just that!

Naturally when we talk to clients about additional financing they are often focused on ' the bank ‘. The challenge here quite often is that while our Canadian banks are pretty good at funding businesses for growth, they aren't that great when it comes to financing early stage companies. That always comes back to the banks vested interest in preserving capital. So when you can't properly demonstrate a track record, the right amount of sales and profitability, or external collateral, what in fact are some alternatives for business funding?

One method is the Government Small Business Loan, which we've always thought isn't really that small - i.e. 350k is the borrowing limit. It's available all across Canada and criteria is much more ' looser ' than traditional bank financing.

Other creative

financing alternatives in Canada include:

Equity Credit Lines - You lend your business the funds on a secured basis

Business Credit Cards

Loans from Angel investors

Reverse takeovers of a public shell

Royalty and Revenue Sharing

Vendor financing

Business Incubators

If we had to pick the most traditional method of ' alternative financing ' today we would have to say its factoring or receivable financing .It's used by thousands of businesses to stabilize and generate ' lumps' in your cash flow , it covers short term emergencies, and lowers receivables and increases cash.


Our bottom line, there are numerous traditional and alternative financing sources the business owner may not even be aware of. Seek out and speak to a trusted, experienced and credible Canadian business financing advisor who can assist you in business funding you need.

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 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_funding_creative_financing.html

Getting The Best Equipment Leasing Rates? Here’s How To Achieve The Best Asset Finance Rate In Canada

Understanding Equipment Finance Rates In Canada



OVERVIEW – Information on achieving the best equipment leasing rates in Canada . How important is the asset finance rate when you’re acquiring new equipt?



Equipment leasing rates in Canada. When it comes to achieving the best asset finance rate for your lease, equipment loan, or sale leaseback we have often said to client that it just might be time to ' Walk a Mile in My Shoes '.

That was a song by singer Joe South, and what we mean in talking to clients on this subject is that it just might be prudent to put yourself in the leasing company shoes.

So let’s take a look at what factors affect your overall lease rate in Canada. And the good news is that today it’s a very competitive environment out there, and if you're dealing with the right firm it's very possible to achieve solid rates, terms, and structures that make sense... for your firm!

So, how exactly does a leasing company make money, and furthermore can you gain somewhat of an edge by utilizing this knowledge to your firms benefit.

In general size does count in Canada, so as a general statement larger credit worthy transactions are very much sought after and command the best rates often not that far from bank prime. The industry also has a thriving ' small ticket ' model that focuses on quick approval for transactions generally under 25k. While rates might be a bit higher in this industry model its all about ease of doing business, which is important to the business owner and financial manager.

You as a borrower rarely consider where the lease company gets its funding, but guess what... they borrow it also. The spread between their borrowing rate and your implicit rate in the lease is... no surprise... their proft.

But the lease company makes money in a number of different ways, not just their cost of funds on the actual cash flows of the lease. One method that increases the lessor yield or profit is their ability to request down payments from your firm on the transaction.

While the industry generally flaunts a ' 100 % no money down' philosophy your should therefore negotiate for lowest down payment possible, if in fact you are asked to provide one. Oh, and by the way some firms might call this a 'security deposit', but at the end of the day it’s still in the category of a down payment.

The actual cost and value of the asset is a key driver in the lease company's assumption around profit. In Canada you have a choice between two types of leases, capital and operating.

If you choose an operating lease you or the lease company will make or lose a significant amount of money if the transaction is not priced and understood properly. Thats because returning the asset to the leasing company allows them to not only profit on the finance / interest rate portion of your transaction, but also the sale of the asset to further increase profit.

In the Canadian marketplace you might be asked, and typically you will... to pay miscellaneous lease costs associated with the administration of the lease, ie government registration fees to collateralize the asset, documentation preparation, etc. These generally are no more than a few hundred dollars.

We've highlight some of the factors that affect equipment leasing rates in Canada. If you're looking for an asset finance rate that suits your firm seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business needs.

7 PARK AVENUE FINANCIAL
CANADIAN EQUIPMENT LEASE SOLUTIONS 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 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/equipment_leasing_rates_asset_finance_rate.html

Are You Shirking Business Growth Finance Opportunities. Be A Master , Not Follower Of Cash Flow Financing Principles And Solutions

Some Key Growth Finance Business Essentials


OVERVIEW : Information on business growth finance in Canada . Cash flow financing, asset monetization and proper business borrowing is key to success


Although business growth finance solutions are a priority among most business owners and financial managers it's easy to shirk

your responsibilities in this area when confusion reigns around types of solutions, pricing, and the concern that the whole business world in fact might be over obsessed with growth!

The other side of that coin when it comes to cash flow financing solutions and growing sales is that your industry, employees, etc might in fact perceive your slow growth as a sense of failure. In the larger corporate world those slow growth companies often get gobbled up along the way by competitors.

The thing though, is that while it’s important to have growth financing in place it really doesnt matter if in fact you're not generating reasonable profits, and returns on all the assets that you have in your business.

Different types of financing in Canada are required for different levels of growth. Your company can grow by expanding markets, organic growth, and of course you also could acquire a competitor.

So if your company is in fact growing, or focused on growing for all the right reasons how do you assess and execute on the financing component?

One other key point is also that you can utilize a finance strategy to acquire a competitor, which can be handled in a number of ways: asset loans, reverse takeovers, unsecured cash flow loans, etc. Naturally the benefits of a successful acquisition are often significantly set off by the high price you might pay for such an acquisition if it was not valued properly, or executed on properly.

Also, at a certain point it’s really difficult to keep up high growth and maintain the return on investment you are looking for.

So what are some of the options for cash flow financing and asset finance when it comes to business growth? If your firm is deemed commercially credit worth at the Canadian chartered bank level a lot of price and flexibility options become immediately viable. They include unsecured cash flow loans, accessing bank revolving lines of credit, The good news here is that you are often in a position to use assets you already own via asset based lending or some form of creative sale leaseback arrangement .

If there is a bottom line today re: business growth finance its simply that depending on which stage of the life cycle your business is at you do in fact have the ability to access sources of financing such as trade credit, institutional or bank facilities , and alternative financing capital via independent and specialized commercial finance companies .

Just remember that if you are in fact focused on growth you need to always have the financing to underpin it. In a perfect world you want to be able to combine internal resources with external solutions.

Just remember that the transition to growth might not be as easy as it seems; so seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with the proper external financial solutions.

7 PARK AVENUE FINANCIAL
BUSINESS GROWTH FINANCING SOLUTIONS





Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 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/cash_flow_financing_business_growth_finance.html

What Type Of Asset Finance Is The Lubricant To Growth Financing In Canada ? Financial Assets Are Critical To Business Success

Let’s play the Match Game Of Asset Finance In Canada


OVERVIEW – Information on growth financing strategies in Canada. Your ability to properly match asset finance of your financial assets to the right type of solution is key to proper growth .



Growth financing in Canada. As if keeping your business alive as a Canadian business owner or financial manager wasn't enough, what about all the growth financing challenges you have to face?!

There probably are thousands of businesses in Canada who are either content to stay roughly the same size, or , at the opposite end of the spectrum, want their business financial assets to grow, but just don't know how , or where to turn to . Businesses in the SME sector in Canada are sometimes quite happy to put those earned profits regularly back in the bank accounts of their owners. That’s ok, for course, just not complementary to a growth strategy.

As we said though, many firms wish to capitalize on asset finance solutions in Canada to add assets to their business open a new location, buy a competitor, even in some cases franchise their business model.

So if it is true that financing is the key ' lubricant ' in that growth financing depends on, and if the business owner’s dont have ability to fund their firm personally, what are in fact the options? In reality there are more than you think!

Naturally early start up firms in Canada though do in fact rely on initial owner equity. But sooner or later you need growth financing of financial assets for key investments in offices space, software, computers, and other infrastructure and business model assets.

We never fail, or at lease try not to fail at pointing out to business owners/mangers that internal cash flow generated form asset turnover is a key to growth finance. It's just that they are never enough! And if you're not big enough to go public yet, or engineer a reverse takeover then financing financial assets is in fact going to be a key driver in your revenue and profit growth.

Here though we are at a key point in the juncture of your firm. Because here's where mistakes are made, we’re referring to the sometimes inability of the business owner/manger to match the right assets with the right type of financing. So a very key point is in fact that you should be financing receivables, inventories, and tax credits with short term financing vehicles in Canada.

Those solutions include bank lines of credit, receivable finance, inventory finance; asset based non bank lines of credit, and purchase order/supply chain financing.

Longer term assets should be financed with term loans, equipment leases , secured or unsecured cash flow loans ( unsecured is best!) , etc .

If you wish to match the right assets you have, or need, with the right type of financing seek out and speak to a trusted, credible and experienced Canadian business financing manager today.

P.S. That is of course only if you want to grow your business!

7 PARK AVENUE FINANCIAL
CANADIAN GROWTH FINANCING AND ASSET FINANCE SOLUTIONS






Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 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/asset_finance_growth_financing_financial_assets.html

Man Buying A Business Receives Financing Approval! Surprised? Here’s Some Info On Franchise Loans In Canada

Franchise Financing In Canada


OVERVIEW – Information on franchise loans in Canada . Get the right financing when you’re buying a new or existing business from a franchisor .





Franchise loans in Canada. When you're buying a new or existing business in this large segment of the economy should you be surprised to read our headline regarding financing approval? That depends of course... on whether you yourself have been approved, or declined!

There is of course some ' right ways ' to finance a busines in the franchising industry. Top experts in the field can provide you with both the guidance to ensure your finance request is approved, as well as minimizing the time it takes to get to the goal line - that time often being the most frustrating part of your search to finance entrepreneurship.

We continually remind clients that they must focus on a total solution, that being both the turnkey financing of their project, as well as taking into consideration working capital and growth financing. Those latter two are sometimes forgotten, leading to disastrous consequences.

In Canada financing for franchise loans is provided by a small handful of resources - they include specialized finance companies, the government SBL loan, and third party lease and finance companies.

Using any one or a combination of the above financing resources effectively puts you very quickly very close to the goal line when buying a business.

Many new franchisees associate ' the bank ' as the source of their possible financing. They are thinking in terms of what we could call ' conventional financing ‘. So the question then is very simple. Do Canadian chartered banks in effect finance franchise loans? The answer is a resounding yes, couple with a resounding watch out.

While our bank system has the lowest rates in Canada, as well as generally flexible terms the reality is that a conventional loan of this type requires that you put up personal assets, quite often the equity in your home. That of course requires approval from your husband or wife, whom many franchisees tell us is more difficult than negotiating with a banker.

We further remind clients that they would do well to consider the concept of separating their personal life and finances from business finances - that is just common sense, and one of the many reasons you also consider incorporating your franchise into a separate legal entity. However, in fairness to our great and strong banking system in Canada almost all the banks have embraced the franchise industry and have some experts in their system who can address your needs. It's just finding out which branch they are located at!!

So what about the franchisee who can or doesn't want to pledge all those personal assets (you have to have assets to pledge them apparently)? One solution is of course to partner with someone who can assist in relieving the total financial burden of the business. However, in our own experience a lot of issues (mostly character and personal!) arise in partnership challenges of managing and owning a business. Going alone, while lonely is often the best solution.

In general the potential Canadian franchisee requires a reasonably good personal credit history, as the franchise lender wants to know you manage your own personal finances in a manner that reflects how you will manage your business.

So, when you plan or system to successfully enter the franchise industry seek out and speak to a trusted, credible and experienced Canadian business financing expert for assistance with franchise loans in Canada . Your focus? Doing it right... and quickly.

7 PARK AVENUE FINANCIAL
CANADIAN FRANCHISE 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 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/franchise_loans_financing_buying_business.html

What’s The Difference Between A Bank Or ABL Revolving Credit Line And Factoring ? What’s My Limit?

Here’s Your Reality Check On Cash Flow Financing In Canada



Here’s Your Reality Check On Cash Flow Financing In Canada



When Canadian business owners and financial managers are up to their necks in running their companies, growing sales, and managing operations to effectively use assets ... the last thing they think they have time for is to understand some key differences in terminology when it comes to financing their current assets . We're talking about receivables, inventories, and tax credits they might have, etc.

So why is the terminology so important? Simply because we have found different terms have different meanings depending on who you are talking to. Let's explain why you need to know this when it comes to considering either a bank revolving credit line limit, or an ABL factoring type of arrangement.

Bank lines are typically put in place for a one time set amount. It’s pretty safe to say that they are, in general, reviewed on an annual basis. Here's where the terminology gets important. Under this type of facility your assets, primarily A/R and inventory are in effect ' collateral ' for your borrowing. You have given the bank this ongoing collateral - and in the majority of bank deals you are also required to provide personal guarantees or outside collateral.

Your current assets are then margined, again, typically on a monthly basis and you can borrow within the previously mentioned limit. Banks manage this process by a simple document called a ' borrowing base certificate ‘, essentially highlighting the aging and turnover of your current assets.

So how does this differ from an asset based line of credit through a non bank ABL firm? (A = Asset B=Based L= Lending)

Factoring, or receivable financing is the most common, let’s call it a ' sub set ' of asset based lending. So although this could include fixed assets and real estate, to keep things simple we'll focus today on just receivables and inventory.

In the case of factoring receivables the documentation somewhat differs when you set up your facility, because it specifies that any receivables you wish to finance are in effect ' sold ' at the time of financing. The finance firm manages this quite effectively, and a common way they do this is to set up what is known as a ' lockbox ' or ' blocked account '. Here is then what happens. As you generate sales on a daily or ongoing basis you immediately receive funds. As these funds are collected by yourself, or your finance firm the monies are deposited into an account controlled by the finance firm. That makes sense given you have already received the funds when you generated sales.

We hasten to add that the recommended solution for this type of ABL factoring is in fact a confidential facility, allowing you to bill and collect your own receivables and maintain effective customer relationships.

Final point today - and it’s about your limit. As we noted bank arrangements typically are focused on one pre set limit. This sometimes does not address seasonality or bulges in the business of the Canadian business owner and financial manager. ABL factoring on the other hand in essence grows automatically with your sales. In effect its unlimited financing with your qualified assets; i.e. receivables and inventory.

So, our point today? Understand the terminology and nuances and what they can and can't deliver for your firm. Need help? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in managing the reality check of cash flow and working capital financing in Canada.

7 PARK AVENUE FINANCIAL
CANADIAN ASSET BASED LENDING & WORKING CAPITAL 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 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/factoring_revolving_credit_line_limit_abl.html

Why Consider SBL Loans In Canada . The Government Business Loan Program Might Be The Financing You Need

Assessing the BIL/CSBF Loan Program In Canada


OVERVIEW – Information on the government business loan in Canada. How SBL loans provide the financing your business just might need.



SBL Loans in Canada. It's the government guaranteed business loan program in Canada; so why should you or your firm be interested?

The Canadian government, via Industry Canada has provided this loan program for years in an effort to help businesses in the SME sector (in this case those with sales or projected sales under 5 Million $) get the financing they need through the loan guarantee.

Each year thousands , and we mean in the 8000 range , of companies receive access to Billions of dollars of funding for the purchase of assets, technology, software, and yes, even leasehold improvements - paint and drywall and HVAC included!

But does this loan make sense for your company, and, if it does, how do you access the program? Is there the proverbial ' red tape ' that most of us associate with ' I'm from the government and we're here to help'!

Nothing against our good friends in the government, but clients are surprised to know they have no, repeat ' no ' direct ' interaction with the government for this type of business loan.

That's because the gov't has designated Canadian chartered banks, and a few other miscellaneous institutions with providing this loan. It' somewhat ironic that even the governments quasi bank, the ' BDC ' is in fact no even able to provide these loans.

So the bottom line is that your transaction is directly done with a ' hopefully ' knowledgeable banker that understands your business needs, and the program. The gov't guarantees a large portion of the loan to the bank once your transaction is approved, and repays the bank in a worst case scenario.

But we're talking about getting the loan, not defaulting on it!

To recap, SBL loans can be used to expand or modernize any facility as long as your business is in that facility. This is not a real estate flip financing program, trust us on that one!

Additional assets under the program that can be financed include machinery, equipment, furniture, and leasehold improvements.

What cannot be financed under the program? Unfortunately many clients think it’s a cash loan, a working capital loan, or an inventory and receivables financing loan. It is none of the above.

So how does one qualify for the program? As we said, it’s a lot easier than you think, and if you are successful rates, terms and structures are excellent, including a limited personal guarantee.
Speak to a trusted, credible and experienced Canadian business financing advisor on how you can benefit from this solid financing alternative for either your start up business, or an existing one in which sales are under 5 Million dollars.

P.S. You'll be please to know that you can even purchase an existing business, or franchise, under the program!

7 PARK AVENUE FINANCIAL
CANADIAN SBL LOAN 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 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/sbl_loans_business_loan_government.html