A merchant cash advance for business cash flow continues to grow and become more widely used in smaller sized firms in the Canadian business environment.
Smaller Canadian firms who do not have major investments in receivables and inventory do not have the financing alternatives enjoyed by their larger company counterparts. Larger corporations use the concept of securitization as a method of financing working capital and enhancing balance sheets. This type of sophisticated financing allows firms to improve liquidity and satisfy lender loan covenants.
Smaller firms, usually do to cost, lack of financial sophistication, and size are unable to utilize such alternative financing. Additionally, in the current 2009/2010 financial environment many firms are struggling with their ability to maintain bank credit facilities, let alone increase them!
The discounting of future sales, for cash today , allows firms to convert working capital into immediate cash. This comes with a cost which we will also discuss.
It is critical to note that when a firm sells, or factors, or discounts (they all mean the same thing) they retain no ownership or interest in the future sale .
Depending on how the merchant advance facility is structured they may or may not have responsibility for the ultimate non- collectibility of the account. Lenders address that issue in a variety of manners.
Smaller companies in Canada aren't able to enter to large multi year arrangements, with lower costs, that would allow them to achieve the benefits of a true securitization.
But ... ! .. you can sell sell future sales under a discounting agreement. This can be done with a minimum of cost and deals can be structured uniquely to the customers situation, and their is a lower cost and no reliance on lawyers, advisors, etc.
If used on a regular basis the merchant cash advance discounting process continually generates new working capital, allows the customer to generate better rates as time goes on, and, most importantly, relieves the financial stress of managing working capital.
It is very important to note that smaller companies have some distinct choices that on occasion the larger firms don't have. They can on a one time basis, or periodically choose to utilize this alternate financing method.
Ultimately the business owner does have to pay back the lender or generate sales that will allow the repayment .
Typically the costs in business cash flow financing vary greatly. Rates range from 1.5 - 3% on a monthly basis. Most customers view this as an ' interest rate ', while the lender tends to view it as discount rate.
Generally the facility can be set up in a couple of weeks! We have seen our clients set up a facility in a matter of days !
As we can imagine it takes the larger corporations many months (and many thousands of dollars) to set up their large dollar securitization facilities.
In summary, more and more firms are turning towards a merchant cash advance business cash flow loan to manage their working capital and liquidity challenges.
Firms are strongly advised to search out experts in this area who know the Canadian marketplace, as it differs substantially from the U.S. environment in this unique method of alternative financing.
--
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/business_cash_flow_merchant_cash_advance.html
Our blog highlights Canadian Business Financing solutions via receivable finance , equipment finance, working capital financing, asset based lending, business acquisition financing,franchise finance, and tax credit monetization via SRED and Film Tax Credits. Our goal is to educate and assist Canadian businesses with their financing needs. You Are Looking For Canadian Business Financing! Welcome to 7 Park Avenue Financial Call Now ! - Direct Line - 416 319 5769
Monday, January 3, 2011
Why a Confidential Factoring Receivable And Invoice Finance Program Will Work For Your Firm
Are we right or wrong? We have always maintained that knowing something others don't in business gives you an advantage, and we think you’ll see that advantage when we tell you about a confidential factoring program that works and why this type of invoice finance puts you head and shoulders above your competition.
You probably have heard that thousands of Canadian firms have moved to invoice discounting as their primary finance vehicle. Unfortunately mis information about this type of financing is everywhere, and we'll show you how the advantages of receivable financing can be put to work immediately.
The real power of confidential invoice financing is the fact that you have the ability to bill and collect your own receivables. 99.9% of your competition won’t be able to do this, and it is that stigma along with their suppliers, employees, etc that your competitors cant overcome.
Invoice financing works because as you grow your company the collection of cash doesn’t, unfortunately, match the amount of sales you are generating. Those customers of yours continue to pay you in 30, 60, and 90 days... like it or not.
Naturally we tell our clients they have the option of restricting their customer’s credit, holding shipments, and enforcing a strict collection policy - as you can imagine that is not their preferred solution - which is more often than not to extend more credit and be patient with their customers.
If you have an operating line of credit from a bank you could generally fund this working capital at a pretty decent cost - unfortunately small and medium sized business in Canada can't always access this type of credit.
Enter a confidential factoring receivable and invoice finance program! When you utilize this type of financing you are generating all the short term borrowing you need, and, more importantly, you have the ability, unlike those competitors of yours to bill and collect your own receivables. Most receivable financing in Canada is actually done on a full notification basis - it works, but we don’t like it, because it involves notifying our clients, employees, etc as to how your firm is being financing. We prefer that to be our clients business, not the entire marketplace!
When you use confidential invoice financing you receive approx 90% of the invoice amount the day you generate the invoice. The balance is simply held back and remitted to you when your customer pays you - less the financing charges.
And hey, what about those financing charges - aren’t they high? We have some strong opinions on that, mainly due to mis information that abounds on the cost of factoring. Confidential invoice factoring costs the same as regular financing in this manner, and we point out to clients that the charge is not dissimilar to carrying those accounts receivable for 60-90 days on your books. And making using of that cash to generate further sales and profits, enhance relationships with suppliers, etc, is a key benefit of this financing.
Speak to a trusted, credible and experienced Canadian business financing advisor and learn how you can take a unique competitive lead via a confidential invoice finance program.
--
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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/confidential_factoring_receivable_invoice_finance.html
You probably have heard that thousands of Canadian firms have moved to invoice discounting as their primary finance vehicle. Unfortunately mis information about this type of financing is everywhere, and we'll show you how the advantages of receivable financing can be put to work immediately.
The real power of confidential invoice financing is the fact that you have the ability to bill and collect your own receivables. 99.9% of your competition won’t be able to do this, and it is that stigma along with their suppliers, employees, etc that your competitors cant overcome.
Invoice financing works because as you grow your company the collection of cash doesn’t, unfortunately, match the amount of sales you are generating. Those customers of yours continue to pay you in 30, 60, and 90 days... like it or not.
Naturally we tell our clients they have the option of restricting their customer’s credit, holding shipments, and enforcing a strict collection policy - as you can imagine that is not their preferred solution - which is more often than not to extend more credit and be patient with their customers.
If you have an operating line of credit from a bank you could generally fund this working capital at a pretty decent cost - unfortunately small and medium sized business in Canada can't always access this type of credit.
Enter a confidential factoring receivable and invoice finance program! When you utilize this type of financing you are generating all the short term borrowing you need, and, more importantly, you have the ability, unlike those competitors of yours to bill and collect your own receivables. Most receivable financing in Canada is actually done on a full notification basis - it works, but we don’t like it, because it involves notifying our clients, employees, etc as to how your firm is being financing. We prefer that to be our clients business, not the entire marketplace!
When you use confidential invoice financing you receive approx 90% of the invoice amount the day you generate the invoice. The balance is simply held back and remitted to you when your customer pays you - less the financing charges.
And hey, what about those financing charges - aren’t they high? We have some strong opinions on that, mainly due to mis information that abounds on the cost of factoring. Confidential invoice factoring costs the same as regular financing in this manner, and we point out to clients that the charge is not dissimilar to carrying those accounts receivable for 60-90 days on your books. And making using of that cash to generate further sales and profits, enhance relationships with suppliers, etc, is a key benefit of this financing.
Speak to a trusted, credible and experienced Canadian business financing advisor and learn how you can take a unique competitive lead via a confidential invoice finance program.
--
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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/confidential_factoring_receivable_invoice_finance.html
Sunday, January 2, 2011
How To Get Approved For Cash Flow Funding Via A Merchant Cash Advance In Canada
There isn't a day these days when we don’t meet or talk to a small business client who is having cash flow funding challenges. One solution becoming increasing popular in Canada is a merchant cash advance.
With the right partner firm we have found this type of financing to be a solid interim solution for cash flow financing and working capital. Let’s look at how this type of financing helps our clients achieve working capital success and why it might be right for your firm.
You can call it non traditional or alternative, but quite frankly its becoming more popular everyday and thousands of businesses are taking advantage of this type of business cash flow funding . The success of merchant cash advance financing always seems to come back to the issue of your business not being able to secure working capital financing from what we call our traditional sources, i.e. banks, finance firms.
And the reality around this type of financing is that it is quick and easy, and , more remarkably, often unsecured , depending solely on your ability to generate sales based on historical performance and projected profits . Even though the government continues to encourage banks to pay more attention to small business financing the reality is that traditional financing is 99.9% of the time secured via collateral, personal net worth’s, strong personal credit scores of the owners, and generally stable financial performance from a historical perspective.
The above is all well and good, but tends to eliminate the hundreds of clients we meet who have real business challenges and can’t meet some or all of the aforementioned lending criteria.
So how does this type of financing work. You may have heard of the business financing known as factoring. This, in a nutshell, is the financing of your receivables as you generate them. - I.e. same day cash for sales you make. However, thousands of firms, perhaps yours, have a major revenue component made up of cash and credit card sales, and you still need financing for the same reasons: purchasing inventory, reducing payables, making loan payments, etc.
That’s where the merchant cash advance comes in - in essence you receive cash today for future credit and cash sales. Isn’t this risky for the lender, asks our clients? That may or may not be... but the reality is that if your firm, as an example , can demonstrate via bank statements or credit card sale stats that you have solid sales then the merchant advance lender is prepared to advance you funds today for a percentage of those future sales . A quick example is that you could receive , again, as an example, an $80,000 cash flow loan today and repay it, by agreement, with , for example, 20% of all future cash or credit sales . You are receiving cash today, allowing you to fuel further growth in sales and profits.
Speak to a trusted, credible, and experienced Canadian business financing advisor as to how your firm can benefit today from this innovative and valuable cash flow financing.
--
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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/merchant_cash_advance_cash_flow_funding.html
With the right partner firm we have found this type of financing to be a solid interim solution for cash flow financing and working capital. Let’s look at how this type of financing helps our clients achieve working capital success and why it might be right for your firm.
You can call it non traditional or alternative, but quite frankly its becoming more popular everyday and thousands of businesses are taking advantage of this type of business cash flow funding . The success of merchant cash advance financing always seems to come back to the issue of your business not being able to secure working capital financing from what we call our traditional sources, i.e. banks, finance firms.
And the reality around this type of financing is that it is quick and easy, and , more remarkably, often unsecured , depending solely on your ability to generate sales based on historical performance and projected profits . Even though the government continues to encourage banks to pay more attention to small business financing the reality is that traditional financing is 99.9% of the time secured via collateral, personal net worth’s, strong personal credit scores of the owners, and generally stable financial performance from a historical perspective.
The above is all well and good, but tends to eliminate the hundreds of clients we meet who have real business challenges and can’t meet some or all of the aforementioned lending criteria.
So how does this type of financing work. You may have heard of the business financing known as factoring. This, in a nutshell, is the financing of your receivables as you generate them. - I.e. same day cash for sales you make. However, thousands of firms, perhaps yours, have a major revenue component made up of cash and credit card sales, and you still need financing for the same reasons: purchasing inventory, reducing payables, making loan payments, etc.
That’s where the merchant cash advance comes in - in essence you receive cash today for future credit and cash sales. Isn’t this risky for the lender, asks our clients? That may or may not be... but the reality is that if your firm, as an example , can demonstrate via bank statements or credit card sale stats that you have solid sales then the merchant advance lender is prepared to advance you funds today for a percentage of those future sales . A quick example is that you could receive , again, as an example, an $80,000 cash flow loan today and repay it, by agreement, with , for example, 20% of all future cash or credit sales . You are receiving cash today, allowing you to fuel further growth in sales and profits.
Speak to a trusted, credible, and experienced Canadian business financing advisor as to how your firm can benefit today from this innovative and valuable cash flow financing.
--
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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/merchant_cash_advance_cash_flow_funding.html
Looking For Canadian Tax Credits For Film Financing?
The train has just left the station and unfortunately your project isn’t on it? We're of course referring to the fact that you might be missing out on Canadian tax credits for film financing.
While many states in the U.S. and in other parts of the world also can only currently describe their film tax credit programs as mild disarray Canada's robust tax credit program for film finance is dead on track for being generous, robust, and, in our clients opinion well administered and funded .
Utilizing Canadian film and video production services tax credits can be the final piece of your financing puzzle as you cobble together debt, equity, and tax incentives to complete the financing of your project. The new paradigm of film financing (we’re also talking of course about television and digital animation projects) is to do the best you can with any number of finance vehicles to complete your project. The economic meltdown of 2008 and 2009 is behind us, things are looking up, but unfortunately there is left a bit of scorched earth as the landscape for independent film financing has eliminated many finance firms, hedge funds, and banks who participated in this entertainment financing.
But through all that the Canadian tax credits for film financing not only stayed intact, they got more generous, and most would agree are efficiently administered. And when you take those tax credits and utilize them as a key part of your financing strategy then you've got a winning combination.
The Canadian government uses provides these tax credits to attract productions such as yours - their own reasons , whether they be cultural, economic, employment , etc are for academics and tax payers to debate - all you have to do is utilize these credits to the maximum for your own projects success .
In the past the entire approval and financing of the Canadian tax credits for film financing was viewed as cumbersome. Boy has that changed. With the aid of a Canadian film tax consultant you can very quickly assemble a competent team which would include an entertainment accountant who can validate your budgets and spends, and at the same time help you navigate the whole tax credit certification process.
With a proper team in place, and having your other debt and equity lined up, you can actually cash flow the credit prior to your project completion - that simply provides you with cash flow and working capital for your project. Typical tax credits on a per cent age basis can actually be 30-45% of your entire project. We repeat - 30 -45%!
So whats our bottom line again? We think its quite simple - don’t let the Canadian tax credits for film financing train leave the station without your project on board! Speak to a trusted, credible and experienced Canadian business financing advisor in film tax credits who can help you cash flow and monetize your project.
--
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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/canadian_tax_credits_for_film_financing.html
While many states in the U.S. and in other parts of the world also can only currently describe their film tax credit programs as mild disarray Canada's robust tax credit program for film finance is dead on track for being generous, robust, and, in our clients opinion well administered and funded .
Utilizing Canadian film and video production services tax credits can be the final piece of your financing puzzle as you cobble together debt, equity, and tax incentives to complete the financing of your project. The new paradigm of film financing (we’re also talking of course about television and digital animation projects) is to do the best you can with any number of finance vehicles to complete your project. The economic meltdown of 2008 and 2009 is behind us, things are looking up, but unfortunately there is left a bit of scorched earth as the landscape for independent film financing has eliminated many finance firms, hedge funds, and banks who participated in this entertainment financing.
But through all that the Canadian tax credits for film financing not only stayed intact, they got more generous, and most would agree are efficiently administered. And when you take those tax credits and utilize them as a key part of your financing strategy then you've got a winning combination.
The Canadian government uses provides these tax credits to attract productions such as yours - their own reasons , whether they be cultural, economic, employment , etc are for academics and tax payers to debate - all you have to do is utilize these credits to the maximum for your own projects success .
In the past the entire approval and financing of the Canadian tax credits for film financing was viewed as cumbersome. Boy has that changed. With the aid of a Canadian film tax consultant you can very quickly assemble a competent team which would include an entertainment accountant who can validate your budgets and spends, and at the same time help you navigate the whole tax credit certification process.
With a proper team in place, and having your other debt and equity lined up, you can actually cash flow the credit prior to your project completion - that simply provides you with cash flow and working capital for your project. Typical tax credits on a per cent age basis can actually be 30-45% of your entire project. We repeat - 30 -45%!
So whats our bottom line again? We think its quite simple - don’t let the Canadian tax credits for film financing train leave the station without your project on board! Speak to a trusted, credible and experienced Canadian business financing advisor in film tax credits who can help you cash flow and monetize your project.
--
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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/canadian_tax_credits_for_film_financing.html
Saturday, January 1, 2011
How Much Will Sred Tax Credit Financing Cost You and why Sr ed Funding Makes Sense
Does a sred tax credit financing make sense for your firm, and whats the cost of sr&Ed funding in Canada? Well, we'd like to show you some solid reasons to consider a sr&ed loan - we'll let you make that decision , our role is to inform – yours is to decide!
If you are filing sred tax credit claims in Canada you also have the option to finance those claims, when completed, or in some cases, in advance! More about that advance scenario later.
Not every Canadian business owner and financial manager knows they can finance a sred claim - we meet with clients all the time who are surprised their tax credit can actually be financed and monetized into real cash flow, immediately. Naturally we are even more surprised when we run into firms that don’t even know about the program , or , more astonishingly, consider it ' troublesome' to file for a non repayable tax credit . Are we missing something, or is that akin to saying ' no thanks' to some free money.
If you do an internet search on the term ' government grants and loans ' you will see that there are thousands of inquiries around that term. In our humble opinion the two best ' government ' related programs in Canadian business financing are the Scientific Research and Experimental Development program, aka SRED! The other program is the government guaranteed subsidized Loan program, commonly known as the BIL program. More about that one on another day.
Filing your sred claim with the assistance of a firm or accountant or industry specialist is a large part of maximizing your claim. They know the positioning and guidelines around a proper submission, and its all about that fine line of maximizing your claim but ensuring it meets all the criteria. In the last year or so the government has actually streamlined the whole process around submissions, and the jury is still out as to whether Canadian business owners filing for sred tax credits consider this a good or bad thing.
Anyway, sred tax credit financing is available if you have a claim. And we are not talking via the bank, which generally doesn’t consider this a finance vehicle, but rather independent finance firms and Canadian business financing advisors who specialize in sr&Ed funding.
Clients are always very focused on their questions - we can close our eyes and rhyme them off - ' how much does it cost' ' whats involved' and ' how much can I get '.
Claims are generally financed at 70% of the value and the balance is simply held back as a buffer. The whole process can be completed in a week or two with your firm’s co operation, sr&Ed funding is structured very uniquely. You receive funding and don’t make any payments on this financing; it’s a kind of bridge loan. The financing charges are in the 2% per month range - sometimes less, and sometimes more and you can use the funds for any general corporate purpose. With a good track record your claim can be financed during the year as you spend funds , so it is kind of an accrual scenario .
Does sr&Ed funding makes sense? It does it you can use the cash from your non repayable grant to grow your business, increase profits, continue the battle against the competition, and increase your firms cash flow and working capital. The opportunity cost of not doing anything with your claim might just be too great!
Speak to a trusted, credible and experienced Canadian business financing advisor around tax credit financing that might just make great 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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/sred_tax_credit_financing_sr_ed_funding.html
If you are filing sred tax credit claims in Canada you also have the option to finance those claims, when completed, or in some cases, in advance! More about that advance scenario later.
Not every Canadian business owner and financial manager knows they can finance a sred claim - we meet with clients all the time who are surprised their tax credit can actually be financed and monetized into real cash flow, immediately. Naturally we are even more surprised when we run into firms that don’t even know about the program , or , more astonishingly, consider it ' troublesome' to file for a non repayable tax credit . Are we missing something, or is that akin to saying ' no thanks' to some free money.
If you do an internet search on the term ' government grants and loans ' you will see that there are thousands of inquiries around that term. In our humble opinion the two best ' government ' related programs in Canadian business financing are the Scientific Research and Experimental Development program, aka SRED! The other program is the government guaranteed subsidized Loan program, commonly known as the BIL program. More about that one on another day.
Filing your sred claim with the assistance of a firm or accountant or industry specialist is a large part of maximizing your claim. They know the positioning and guidelines around a proper submission, and its all about that fine line of maximizing your claim but ensuring it meets all the criteria. In the last year or so the government has actually streamlined the whole process around submissions, and the jury is still out as to whether Canadian business owners filing for sred tax credits consider this a good or bad thing.
Anyway, sred tax credit financing is available if you have a claim. And we are not talking via the bank, which generally doesn’t consider this a finance vehicle, but rather independent finance firms and Canadian business financing advisors who specialize in sr&Ed funding.
Clients are always very focused on their questions - we can close our eyes and rhyme them off - ' how much does it cost' ' whats involved' and ' how much can I get '.
Claims are generally financed at 70% of the value and the balance is simply held back as a buffer. The whole process can be completed in a week or two with your firm’s co operation, sr&Ed funding is structured very uniquely. You receive funding and don’t make any payments on this financing; it’s a kind of bridge loan. The financing charges are in the 2% per month range - sometimes less, and sometimes more and you can use the funds for any general corporate purpose. With a good track record your claim can be financed during the year as you spend funds , so it is kind of an accrual scenario .
Does sr&Ed funding makes sense? It does it you can use the cash from your non repayable grant to grow your business, increase profits, continue the battle against the competition, and increase your firms cash flow and working capital. The opportunity cost of not doing anything with your claim might just be too great!
Speak to a trusted, credible and experienced Canadian business financing advisor around tax credit financing that might just make great 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 6 years - has completed in excess of 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/sred_tax_credit_financing_sr_ed_funding.html
Friday, December 31, 2010
Worried About Getting A Loan For A Franchise ? - Here's your 2011 Franchise Financing Guideline!
We know you'd rather start the New Year off with a positive attitude about your new role as entrepreneur - let’s demonstrate how you get a loan for a franchise and how franchise financing works in Canada.
Buying a franchise is clearly one of the bigger decisions you'll make in your personal and business life, and you want to be able to do that with specialized information and assistance to help you succeed.
We would never say there are a large number of ways to finance a franchise in Canada , but there are some tried, tested, proven and recommended methods and strategies and we'll show you how they work!
You never want to feel you have been pushed or misguided when you are thinking of getting a franchise financing loan. That's where professional info is always the best solution.
We're the first to agree that the attractiveness of buying a franchise is a powerful concept - you're literally buying a proven formula and it’s no secret that you have a better chance of surviving if you purchase a franchise as opposed to starting your own independent business that has no track record.
So when you decide to finance that franchise the ' legwork’... if we can call it that, is important. Your goals are threefold actually, you want to be able to successfully purchase the franchise, ensure you have some capital to operate it, and finally, growth is important to your overall success, so you want access to growth capital for your business if you need it.
The majority of franchises are cash flow based, i.e. the restaurant industry, so operating capital and growth capital are not as important in those scenarios. But if you are purchasing a business that has receivables, inventory, and equipment needs, well... be aware that those items need working capital financing.
Franchise financing has three parties to it, yourself as the borrower, the franchisor itself, and of course the finance firm or bank. Generally most franchisors in Canada will determine if you are a qualified candidate for them - that includes a combo of business and or industry experience, as well as some sort of qualified financial credit check on yourself that determines you have the wherewithal to successfully purchase a business.
You only need two things to finance a franchise and get a loan for a franchise. Simple, right. Well those two things tend to be the 2 items that our clients worry about - they are Debt, and Equity. Equity is of course the amount of funds that you personally will put into the business - debt is what you'll borrow of course.
In Canada the current environment calls for a 30-50% range owner equity infusion... this number in our opinion seems to have crept up over the years. The debt or loan for franchise acquisition comes from predominantly the government. The government!! clients ask? Yes, because the majority of franchises financing in Canada are done under a special loan program called the BIL/CSBF loan program. To qualify you need a business plan, and miscellaneous info required to support your application.
This loan eliminates a huge part of the risk in getting a franchise, because your personal guarantee is limited, thanks to our friends in Ottawa who sponsor the program. Also, and we think this is great; the loan finances things like leasehold improvements, which typically would be impossible to get elsewhere.
Speak to a trusted, credible, and experienced Canadian business financing advisor who will assist you to complete franchise financing successfully. Getting a loan for franchise finance is not as hard as you think, if you have an expert on your side in 2011.
--
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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/franchise_financing_loan_for_franchise.html
Buying a franchise is clearly one of the bigger decisions you'll make in your personal and business life, and you want to be able to do that with specialized information and assistance to help you succeed.
We would never say there are a large number of ways to finance a franchise in Canada , but there are some tried, tested, proven and recommended methods and strategies and we'll show you how they work!
You never want to feel you have been pushed or misguided when you are thinking of getting a franchise financing loan. That's where professional info is always the best solution.
We're the first to agree that the attractiveness of buying a franchise is a powerful concept - you're literally buying a proven formula and it’s no secret that you have a better chance of surviving if you purchase a franchise as opposed to starting your own independent business that has no track record.
So when you decide to finance that franchise the ' legwork’... if we can call it that, is important. Your goals are threefold actually, you want to be able to successfully purchase the franchise, ensure you have some capital to operate it, and finally, growth is important to your overall success, so you want access to growth capital for your business if you need it.
The majority of franchises are cash flow based, i.e. the restaurant industry, so operating capital and growth capital are not as important in those scenarios. But if you are purchasing a business that has receivables, inventory, and equipment needs, well... be aware that those items need working capital financing.
Franchise financing has three parties to it, yourself as the borrower, the franchisor itself, and of course the finance firm or bank. Generally most franchisors in Canada will determine if you are a qualified candidate for them - that includes a combo of business and or industry experience, as well as some sort of qualified financial credit check on yourself that determines you have the wherewithal to successfully purchase a business.
You only need two things to finance a franchise and get a loan for a franchise. Simple, right. Well those two things tend to be the 2 items that our clients worry about - they are Debt, and Equity. Equity is of course the amount of funds that you personally will put into the business - debt is what you'll borrow of course.
In Canada the current environment calls for a 30-50% range owner equity infusion... this number in our opinion seems to have crept up over the years. The debt or loan for franchise acquisition comes from predominantly the government. The government!! clients ask? Yes, because the majority of franchises financing in Canada are done under a special loan program called the BIL/CSBF loan program. To qualify you need a business plan, and miscellaneous info required to support your application.
This loan eliminates a huge part of the risk in getting a franchise, because your personal guarantee is limited, thanks to our friends in Ottawa who sponsor the program. Also, and we think this is great; the loan finances things like leasehold improvements, which typically would be impossible to get elsewhere.
Speak to a trusted, credible, and experienced Canadian business financing advisor who will assist you to complete franchise financing successfully. Getting a loan for franchise finance is not as hard as you think, if you have an expert on your side in 2011.
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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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/franchise_financing_loan_for_franchise.html
Thursday, December 30, 2010
Asset Based Lending Canada - Why An ABL Working Capital Loan is Your 2011 Finance Solution
Optimistic as us? We would bet a nickel that you're a lot more optimistic about business growth and prospects heading into 2011 - Could it have gotten any more challenging over the last two years? Doubtful !
So how asset could based lending Canada and a working capital loan facility give you all the business financing optimism you might have lost over the last couple years.
Simply for the reason that, when properly utilized and structured an asset based line of credit, aka an ' ABL ' is in our opinion your best bet for a one stop shopping solution for all your cash flow needs.
That’s a pretty powerful statement, so let’s examine what an ABL solution is, how it works, and more importantly, why you should potentially consider it for your business financing and working capital solutions.
Simply speaking asset based lending is a cure all for firms that are highly leveraged, have had some challenges in financial performance, and at the same time have an asset base to move forward on and grow the business .
The term asset based line of credit is in no way misleading - it’s simply a line of credit that finances your assets (receivables, inventory, and potentially equipment and real estate) on a revolving basis. To put it in better context think bank line of credit without the rations, covenants, additional collateral, emphasis on personal guarantees and personal net worth, etc.
An ABL working capital loan or revolving facility simply gives you the tool to grow your business, and that tool is cash. No longer will you have to worry about negotiating seasonal or one time bulge needs in your finance needs, and you could even consider an ABL facility as a solution to acquire a competitor.
In many cases the asset based lending Canada solution that you need is a stop gap against two key challenges, the ability to grow your business when you don’t have enough owner equity and are potentially over leveraged.
Naturally the alternative solution to a working capital facility such as this is for the owners of the company to put in more equity and long term working capital. That typically has a lot of challenges to it, and if you talk to anyone seasoned in business finance you'll quickly learn that giving up equity is a lot more expensive than monetizing your assets, which is what a working capital loan facility does when you consider the ABL solution .
So how does the facility work - it is a non bank solution with an independent firm, and provides you with 90% receivable financing, and inventory borrowing that’s based on the actual value of your inventory, not some pre determine cap or limit that many banks impose. (That’s because banks generally don’t have the ability to understand your inventory values - ABL lenders do!).
Asset based lending, in our experience is a bit more costly than traditional banking, but the upside is you have unlimited cash flow financing for your growth and unique business challenges. One other perceived disadvantage of asset based lending in Canada is simply that you have to report on your a/r and inventory in a more timely fashion - Quite frankly though we often tell clients that type of reporting will help them understand their business better .
So, you're probably intrigued! As we have shown you a solution to expand, meet cash flow needs, and access working capital cash flow that might otherwise not be available. Speak to a credible, experienced and trusted Canadian business financing expert on how to access a working capital loan and operating facility today - It’s your 2011 best bet for business financing.
--
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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/asset_based_lending_canada_working_capital_loan.html
So how asset could based lending Canada and a working capital loan facility give you all the business financing optimism you might have lost over the last couple years.
Simply for the reason that, when properly utilized and structured an asset based line of credit, aka an ' ABL ' is in our opinion your best bet for a one stop shopping solution for all your cash flow needs.
That’s a pretty powerful statement, so let’s examine what an ABL solution is, how it works, and more importantly, why you should potentially consider it for your business financing and working capital solutions.
Simply speaking asset based lending is a cure all for firms that are highly leveraged, have had some challenges in financial performance, and at the same time have an asset base to move forward on and grow the business .
The term asset based line of credit is in no way misleading - it’s simply a line of credit that finances your assets (receivables, inventory, and potentially equipment and real estate) on a revolving basis. To put it in better context think bank line of credit without the rations, covenants, additional collateral, emphasis on personal guarantees and personal net worth, etc.
An ABL working capital loan or revolving facility simply gives you the tool to grow your business, and that tool is cash. No longer will you have to worry about negotiating seasonal or one time bulge needs in your finance needs, and you could even consider an ABL facility as a solution to acquire a competitor.
In many cases the asset based lending Canada solution that you need is a stop gap against two key challenges, the ability to grow your business when you don’t have enough owner equity and are potentially over leveraged.
Naturally the alternative solution to a working capital facility such as this is for the owners of the company to put in more equity and long term working capital. That typically has a lot of challenges to it, and if you talk to anyone seasoned in business finance you'll quickly learn that giving up equity is a lot more expensive than monetizing your assets, which is what a working capital loan facility does when you consider the ABL solution .
So how does the facility work - it is a non bank solution with an independent firm, and provides you with 90% receivable financing, and inventory borrowing that’s based on the actual value of your inventory, not some pre determine cap or limit that many banks impose. (That’s because banks generally don’t have the ability to understand your inventory values - ABL lenders do!).
Asset based lending, in our experience is a bit more costly than traditional banking, but the upside is you have unlimited cash flow financing for your growth and unique business challenges. One other perceived disadvantage of asset based lending in Canada is simply that you have to report on your a/r and inventory in a more timely fashion - Quite frankly though we often tell clients that type of reporting will help them understand their business better .
So, you're probably intrigued! As we have shown you a solution to expand, meet cash flow needs, and access working capital cash flow that might otherwise not be available. Speak to a credible, experienced and trusted Canadian business financing expert on how to access a working capital loan and operating facility today - It’s your 2011 best bet for business financing.
--
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 50 Million $$ of financing for Canadian corporations .Info re: Canadian business financing & contact details :
http://www.7parkavenuefinancial.com/asset_based_lending_canada_working_capital_loan.html
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