A ‘ How To ‘ Primer On Canada’s Government Loan . SBL Small Business Financing Makes Sense

Industry Canada sponsors, but does not administer the SBL small business financing government loan program. Government initiatives are solid source of start up and growth capital for thousands of start up and medium sized firms in Canada. The government small business loan is suited perfectly to provide you a source of funding you might otherwise not be able to achieve.

We also might add that many clients approaching us for assistance and info on financing often ask about ' grants ‘, or info on Community Futures funds . These two programs are also a source of Canadian business financing, but not one we'll be discussing today.

First things first in our ' how to ‘... and that’s simply that Canadian business owners and financial managers need to understand the government is the guarantor of the loans, but not, we repeat ' not' the administrators of the ' SBL' (Small Business Loan) program. That clears up a lot of confusion for our clients, who often mistakenly perceive having to deal with the government on a loan as potentially being somewhat bureaucratic. That’s not the case.

So who does administer and run the program - you might have guessed by now that is our Canadian chartered banks, and some other miscellaneous institutions, but primarily the banks. Adding to the confusion is often the perception that the government crown owned business bank, commonly know as ' BDC ' offers the program. Would make sense right? Guess what, they don’t have anything to do with the program.

The basics of the program are simply that your firm can finance up to $ 500,000.00 under the government guarantee to the bank. (In actuality the government guarantees 90% and the bank assumes a 10% risk scenario) However, you need to understand the500k limit pertains only to real estate; typically the cap on the program is 350k.

What can be financed under the program? It's not as broad as you think. Items financed are essentially equipment, leaseholds, software, etc; the bottom line is assets and software .A major mis conception we often have to explain to clients is that cash and working capital is not part of the program.

Terms? They are great. Really great. Rates are only several points over bank prime , terms can be up to ten years, and oh yes, guarantees, only a limited guarantee is required by the business owner, you in fact are not required to co sign or guarantee all of the loan . We can categorically assure you that thousands of others business in Canada do have the owners personally signing for the full amount of the loan.

Pre payment? Although we find many business owners in Canada ask us about pre payment the reality is that most loans probably run to maturity. But if you did choose to pre pay this is one of the only business financings in Canada that you can pre pay without a penalty.

To qualify for the loan the business owner must have a reasonable personal credit history, some element of a down payment to cover the 10% which the bank is on the hook for, and of course a solid executive summary or business plan that is typical of any business financing request. These can be prepared efficiently for a low cost by a trusted , experienced and credible Canadian business financing advisor, who can steer you through the ' how to's ) of the Canadian government loan for small business financing . You'll want to investigate the SBL!




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 .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/how_to_government_loan_small_business_financing_.html

Failure & Success – Let Mezzanine Financing & Canadian Subordinated Cash Flow Loans Be The Difference !

Mezzanine financing and subordinated debt and cash flow loans are a solid alternative to many firms who are searching for capital in the ' grey area ‘. Whats the grey area? Simply speaking it can be the ' high ground ' between debt and equity in your firm, both of those having their own challenges to rise. Let’s take a Canadian walk through the high ground!

There are some typical situations in Canadian business financing that strongly lend themselves to ' mezz ' financing. Typically the word ' growth ' will come up often! ... Simply because that’s one of the drivers all too often of the need for cash flow loans financing.

Business financing in general, certainly when it comes to lending is very tuned to ' ratios ‘. We have always tended to call them ' relationships ‘... a lot nicer term we think! But the reality is that a lot of the debt and cash flow and interest coverage ratios your firm currently may possess simply prohibit you from raising the capital you need... today! Naturally as we all know those ratios, covenants, etc, tend to be Canadian chartered bank driven.

Typical mezzanine and cash flow loans tend to be 3-5 years max... from a term perspective. The mezzanine and cash flow loans solutions you consider should be considered as an intermediate option, not a long term one. Sandwiched in between debt and equity subordinated cash flow loans are usually taken out by one or the other of those at the appropriate time.

Given the general nature of security, i.e. your cash flow, and your projected cash flow it seems to therefore make a lot of sense to ensure you have a management team that can convince the cash flow and mezzanine financing lender that ability to repay the loan is there. Common sense 101, right?

So what can cash flow loans be used for? Typical reasons include buying another firm, a buyout by the management team, simply growing the business, and working capital to fund ongoing and projected sales.

There are instances when the owners of a firm wish to recapitalize with mezzanine financing simply to recoup some of their investment... we would offer up that loading the company up with debt requires a strong case to do that. By inference to what we have talked about cash flow loans of this type are rarely for start up or early revenue firms, as those cash flows are somewhat unpredictable to say the least.

Speak to a trusted, credible and experienced Canadian business financing advisor who can determine if this types of financing suits your current profile. A successful mezzanine financing simply compliments and rounds out your full financial package, and provides the middle ground between our two friends, long term debt and equity.




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 .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/mezzanine_financing_cash_flow_loans_subordinated.html

Canadian Franchisee Funding & Business Loans – In Over Your Head In Lenders & Finance ?

All of us in business are sometimes ' out of our element ' when we are required to create a ' win ' in an environment we sometimes don’t fully understand. So we forgive all clients who seem overwhelmed in the area of franchise finance lenders, funding for their new life as a franchisee, and getting business loans that... oh yes... hopefully make sense!

What we want to do now then is make what you perceived as a journey into a ' short trip “! By the time we have met you quite often you have made the decision to purchase a franchise in an industry either intrigues you, or, hopefully more so, one that you are sure you can be successful in.

Franchising today, in terms of total sales, is a mega portion of the economy - the numbers are staggering. Industries such as automotive, home improvements, business and consumer services, food, specialty and entertainment all have great franchise opportunities.

So whats harder, picking a franchise or trying to figure out who are the franchise finance lenders in Canada and whats the best method of franchisee funding? We'll let you be the judge of that.

Start up or acquisition financing of a franchise in Canada does not have to be as formidable as it might seem. You need a plan, some expert help (much of which is free) and you should have a roadmap to succeed. We'll boil down guaranteed success to 3 very simple issues.

The 3 issues that you should focus on or rationalize vis a vis your franchise finance funding are as follows : a reasonable personal credit record and net worth ( in relation to the size of your franchise investment ) , a basic but clear presentation or proposal ( aka ' business plan' ' executive summary') .. and finally, knowledge of who you are going to present it to for guaranteed success . Simple enough?

Your proposal or plan reflects how you present your business - the essence of the document is info on yourself, your franchisor, and your financial plan re sales / profits / cash flow, and info your industry sector. That's not at all complicated, and with some able assistance that type of document can be prepared in days.

Let’s remember we're talking about business loans, not a personal loan when it comes to franchise finance. Typical financings we see come in at the 350 - 500k range - naturally many franchisees select smaller businesses, some larger .

So, who are the franchise lenders in Canada? That seems a mystery to many clients for some good reasons. One of which the largest franchise financing program in Canada was probably never mean to be just that. We're talking about the governments BIL/CSBF program. Thousands of successful Canadian entrepreneurs use the programs for rates, terms and structures that you could only think ' the big boys' get in terms of attractive finance.

Alternatively one large specialty franchise lender in Canada has a significant presence. In many cases they are aligned on a program basis with your franchisor who might be participating in some manner on the financing.

Don’t forget also that many franchise business loans revolve around the purchase of a franchise business from an existing franchisee. In many cases that becomes a true business loan with a focus on what assets are being purchase, is the business profitable, what are the cash flows and future potential of that business.

Franchise finance funding can also be compliment ed by a working capital term loan, or working with a specialized equipment finance firm to acquire assets outside the main franchise loan . Additionally innovative merchant advance funding arrangements can help you with working capital and cash flow.

Bottom line. It's of course that you shouldn’t feel overwhelmed or not in control of a key element of your franchise decision, the financing. You have alternatives, assistance in the form of an experienced Canadian business financing advisor you may wish to consult with... providing you with the knowledge you can be successful in approved funding and business loans for your new venture.





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 .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/franchise_finance_lenders_funding_business_loans.html

Important First Step - Understanding Why An ABL ( asset based lending) Business Line Of Credit Is Different

ABL is a compelling business line of credit that utilizes the concept of asset based lending. But why does this type of financing differ from traditional bank lending?

Simply because when you utilize this type of operating financing your company is ' running on all cylinders ' when it comes to maximizing your financial borrowing ability. Let's examine why.

An ABL facility in effect creates a borrowing umbrella around your assets. This allows you to meet all your short term business operating needs, at the same time addressing key issues of both growth and any seasonality or cycles in your business.

On many occasions if your company has inventory as a key current asset you are going to be in a position when that inventory and your receivables fluctuate dramatically. Typically in our experience a traditional Canadian bank line of credit is unable to hand large fluctuations in business line of credit needs. Typically that’s because the bank lines have fixed limits, and are focusing on your historical needs, not your current ' bulge ' requirements.

The credit qualifications that you might be associating with a typical bank line of credit essentially don’t come into play with ABL asset based lending. In fact you can say all those rations, covenants, outside collateral, personal guarantees, etc are thrown out the door.

We've got nothing against a bank business line of credit by the way. And no one more than us is as strong a supporter of the strong and credible Canadian banking system. It's just that the majority of clients we meet are unable to access all, or even any, of the business line of credit that they need. That then hampers growth, ability to compete, etc.

Clients can be forgiven for understanding how an ABL business line of credit works or how they differ from whats generally available in Canada , That’s simply because the trend toward asset based finance has only received ' traction ' over the last number of years . We’ll also add that that traction, in effect our ' firing on all cylinders ' analogy gained a lot of steam during the global 2008-2009 credit recession when business financing dried up and came to as about as close to a standstill that we can imagine .

The essence of the ABL business line of credit could not be more fundamental - a facility is created under which you borrow against your assets on a revolving basis. You repay this business line of credit as your business fluctuates on a daily basis.

The key difference is simply you must have assets to borrow against ( inventory, a/r, equipment or real estate ) and you must be able to produce proper ( usually monthly) reports on key business metrics such as balance sheet, incomes statement, aged a/r and aged a/p and inventory lists . We submit if your business can't produce these already you might have bigger problems!

Investigate ABL asset based lending. You might well find that this type of non bank business line of credit not only differs significantly from what you thought it was, but moreso, might be the solution you didn’t know existed for your financing needs. Speak to a trusted, credible an experienced Canadian business financing advisor on why ABL works for you!




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 .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/asset_based_lending_abl_business_line_of_credit.html

Methods Of Financing Working Capital In Canada – Current Assets Leverage For Cash Flow Loans

Isn't it ironic that business can be actually quite good... or even great..? which then becomes a problem only because in business survival and growth it’s all about financing working capital... turning those current assets of your firm into loans or monetization facilities for cash flow.

In a perfect world Canadian business owners want to be able to meet their day to day operations, make any loan or lease payments and be able to plan for upcoming expenses or growth. How could one statement like that induce so much stress!

A lot of that planning comes from the ' current assets ' category of your financials, simply speaking your liquid assets such as cash on hand, receivables, and inventories if in fact your business has inventory. (Some services businesses just have A/R).

Small and medium sized businesses in Canada rely on either capital from their owners personal resources, or their decision to take on loans and debt of some sort.

But what type of loans makes sense when it comes to liquidity? Perhaps a better re phrasing of that question would be ' what is ' good' working capital debt? In our personal credit lives we think of good debt, i.e. a mortgage, and bad debt ' credit cards'!

Naturally considering new ownership or additional equity in your company or business (taking in a partner, etc) is simply a dilution in the long run and somewhat downsizes the overall incentive for all owners to grow the firm.

And when it comes to debt the amount of ' debt' or loans your firm can take on is certainly often limited relative to your own current financials and the state of borrowing in Canada , which vacillates from great to not great as you may have noticed!

So, whats the solution? Is financing working capital the way to go? (As opposed to term loans and more debt) It’s not as complicated as you think. And it all comes back to our friends, those two guys known as ' current assets '!

A large part of working capital financing in your business can come from yourself. Real basics such as ensuring you aren’t paying your payables before you're collecting your receivables... if you're doing that you're simply creating a working capital shortage that you have self imposed.

And let’s discuss your solutions for working capital constraints. We get a huge kick out of receiving newsletters from banks which focus on how to manage your cash surpluses when they are writing about working capital and cash flow. We haven’t had one client come in today with a cash surplus problem, but it's only noon....

Canadian business owners and financial managers challenged with financing working capital have a solid handful of solutions. Naturally in a perfect world (you mean it's not?) you would prefer to not take on a term loan for permanent working capital. But back to that perfect world... that might mean you have an overdraft or bank line of credit. For many small and medium sized businesses that simply is not attainable - or if it is it’s not quite enough.

Real world solutions for financing working capital and current assets, without loans involve what we call the monetization or cash flowing of those current assets, That typically is a working capital facility, non bank in nature (yes they are available and exist!) that allows you to draw daily, as needed on your a/r and inventory in the form of a business line of credit. Larger facilities of this nature are termed ' asset based lines of credit ' - we call them ‘ABL’s ... and them often are superior to bank facilities for a lot of different reasons.

More esoteric working capital solutions, but nonetheless real, are financing your tax credits, purchase order finance, or securitization of your contracts or receivables.

Speak to a trusted, credible and experienced Canadian business financing advisor on the right method of leveraging cash flow from your assets and business. Today would be a good timeframe!





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 .Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/financing_working_capital_current_assets_loans.html

DIY Equipment Finance & Leasing Canada ? Best Companies for Asset & Lease Equipment Needs

When the Canadian business owner or financial manager looks to the leasing of an asset, as opposed to a purchase it’s a great time to invest in some knowledge around which companies to approach for equipment finance needs.

But can you be expected to be a ' DIY ' expert in this broad area of Canadian business financing. What we are saying is that it will pay you handsomely to either invest some time in understanding some key fundamentals of equipment finance, or, alternatively work with an expert who can assist you.

Why invest some time in this type of business acquisition? Simply because the Canadian lease landscape has evolved significantly over the last couple years. A combination of the economy in Canada, the lease industry players, new accounting rules and a myriad of product offerings can make it seem daunting.

By the way we're quite sure any business owner can work with lease companies and enter somewhat quickly into a lease for an asset, but is it the right lease and what are the financial implications and benefits or lack of benefits around that transaction. That’s the $ 50,000 dollar question!

Because almost 80% of all business utilize leasing Canada - that’s why it sometimes is both easy and mis- understood. Many business owners simply don't either under the lease product/service offering, or, alternatively fail to recognize the benefits. Yes, its only one method of financing an asset (you can consider a term loan)... but when a lessor / lease company’s recognize you know what you're talking about you have simply increased your chances for success.

Lease and equipment finance doesn’t bring cash flow and working capital into your company, but boy does it reduce the amount of funds that go out of your firm! The ownership of the equipment from by the lessor, for the term of the lease allows you to structure payments, write off payments as an operating expense, and more importantly keep you ' nimble' when it comes to assets and technologies that you finance over short or long terms. (Typical lease terms in Canada range from 3-5 years).

Business owners might want to do the math but we're quite sure that if you work the numbers it makes sense to enter into a couple of short term equipment finance transaction rather than purchase/buy outright the same assets over a number of years.

If you do invest time in understanding some lease finance basics, or alternatively work with an expert you'll see that you can actually determine when it makes sense to either upgrade, return, or renew any lease finance transaction.

Can our DIY lease financing business owner affect the final credit and structure approval of his or her transaction? The reality is that tougher credit standards are in place since the 2008-2009 global recessions. Therefore the industry focuses on creditworthy lessees- but the good news is that some basic structuring around any transaction can still make your deal happen. Issues such as term, pricing and down payment can be negotiated to the point where it makes sense for the lessor and your firm.

Working an experienced Canadian business lease financing advisor can ensure you get the best pricing, structure, and achieve the benefits you're looking for.

So, everyone’s talking about ' DIY ' these days. Why not invest some time in developing a solid relationship with a lease advisor? Success in asset leasing allows you to grow your company with the assets you require... today!






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 .Info re: Canadian business financing & contact details :


http://www.7parkavenuefinancial.com/equipment_finance_companies_lease_leasing_asset.html

Technology Financing – Options and Strategies for IT And Solar Assets In Canada

Financing technology, whether it be IT ( information technology ) assets, or the new kid on the block, solar finance , requires a combination of access to capital and solid expertise . Let's examine some key options and strategies in tech finance that will provide your firm with the growth potential you need. Oh, and by the way, this pertains to whether you are a user or a vendor of these assets.

Key issues that come into play are valuation of assets, useful economic life (ouch! isn’t that an accounting term?!) and types of financing available in the Canadian marketplace.

Clearly tech financing covers a variety of industries, we're focusing today primarily on computing and solar industries, but our comments are broadly applicable to a number of other asset types.

One of the key challenges in financing technology is simply the fact that the majority of goods and services provided and utilized by your firms either depreciate rapidly, or , unfortunately slowly become obsolete. There is a great analogy that tech assets are like a mines assets, they are depleted and are ' replenished by development '. A true analogy!

Financing tech assets must take into consideration the obsolescence factor - a good example of course if pc's, laptops and servers which easily can depreciate 30% per annum. Creative financial arrangements around these types of assets is critical and we'll discuss that a bit also.

Software and services, often financeable, are other solid examples of high technology assets that require specific options and strategies. These products are high gross margin to the seller and when financed properly provide both benefits to the user and profits to the vendor/lessor. Factors that drive software financing are upgrade cycles, continued proliferation of PC'c and mobile products into all facets of business, as well as the obvious productivity gains these products provide.

Tech and Solar assets can be either finance or purchased. When these assets are financed key issues for financial and credit scrutiny include interest coverage and cash flow, valuation of the technology re type of financing desired.

In the U.S. Surprising almost half the country's employed work in IT and other emerging tech areas such as solar, wind, etc. We're quite sure Canada's numbers would be too far off that.

For computer IT assets typical lease and other financing terms rarely go over three years... it’s simply a question of the useful life of these types of assets. Solar projects require alternative strategies, since they typically have a longer payback.

Financing transactions in IT and Solar industries tend to be cash flow, and not asset based when it comes to lending and financing transactions. These type of transactions clearly aren’t ' asset based lending ' in its traditional form. Upgrades are common in computer, they aren’t in Solar.

It is important for both borrowers and vendors and lessor to separate financing from licensing and technology issues - the intellectual property in the asset being financed rarely, if ever transfers to the borrower.

Key options and strategies in technology financing typically include operating leases, providing the user with significant flexibility.

When either financing tech and solar sales, or utilizing and acquiring such assets consider working with an experienced, credible and trusted Canadian business financing advisor who should be selected on the basis of experience, knowledge, and references .


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 .Info re: Canadian business financing & contact details :

http://www.7parkavenuefinancial.com/technology_financing_options_strategies_solar_it.html