Financing Working Capital For Business – Canadian Business Cash Flow Alternatives

Management and Sourcing of Working Capital Finance For Canadian Business Owners

Information on working capital for financing and what alternatives business owners and financial managers in Canada can seek and utilize . Management of business cash flow and monetizing current assets should be a owner/manager priority .






Looking for some facts and ' real world ' information on working capital for financing purposes in Canada? Business cash flow is at the center of your firms day to day operations, here’s some great ideas for Canadian financing; let's unlock some of those secrets your competitors are using... and give you some vital insights into business financing success.

You may or may not be in a liquidity crisis - we're pretty sure though that you would prefer to avoid one! Naturally that sort of ' crisis' or just plain challenge revolves around how you have chosen to finance your firm from an operational point of view. So yes, it’s all about (unfortunately) ratios and balance sheet structures, which you in many cases have chosen not to deal with. So let’s determine how you can get some cash flow predictability into your business.

So how do you go about addressing business cash flow? It’s more simple than you thing, you have to accelerate business receivables, control your cash outflows, and address those balance sheet issues we referenced above. It absolutely does not mean you have to take on additional debt, if in fact that is even possible in some cases. There are numerous ways to monetize your balance sheet. We have always gotten somewhat of a ‘kick ' out of the standard metric that banks and other financial lending institutions use to measure your business ' cash flow '.

The reality is that there are tens of different meanings and interpretations to cash flow (don’t panic, we're not going to cover them off today!) but the one 99% of people gravitate to is the ' current ratio ‘. It's the simple calc that takes your current assets over current liabilities and gives you a ratio (we call them relationships). We're told bigger is better in this calc, and that a 2:1 final number is preferred.

But... guess what? If your inventories aren’t moving and receivables are slow to collect and perhaps even over 90 days is that number relevant anymore. The most effective way to measure cash flow is really ' operating cash flow ' - it tracks business cash based on the changes in working capital accounts. For example, if your sales are going up and receivable levels went down then you are generating that positive operating cash flow we just spoke of.

We can assure you we have learned by now that clients don’t visit us looking for classroom lectures on ratios, and debates on what measurements lenders use or don’t use ineffectively. What they do want is ways to liquidate or monetize those current assets.

In Canada you have numerous alternatives to working capital financing. These include traditional bank lines, receivable financing, asset based lines of credit that are non bank in nature, and the monetization of any tax credits such as a SRED credit. (Yes, Sred credits can be cash flowed today!).

So is there a bottom line..?? if there is it’s simply that you can improve your working capital yourself by accelerating A/R and inventory turn overs, creating a sale leaseback on assets owned, or, even consider a permanent working capital injection via a term loan.

Or, as we have stated, consider re monetizing your balance sheet today in the 4 methods we've noted above. Want assistance in whats right for your firm. Speak to an expert Canadian business financing advisor who is experienced, trustworthy and credible. Don't underestimate the need to address these issues 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 . 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_cash_working_capital_for_financing.html

Looking For Canadian Business Financing & Lending - Commercial Finance Company Options

Facts and Resources for Canadian Business Financing Options

Information on why business financing in Canada involves the proper selection of a commercial finance company for refinements to your current business finance strategy .



In Canada business owners and financial managers have an assortment of specialized finance companies that provide a broad level of financing products, all of them different in nature, so let’s examine why a certain commercial financing company might be your best logical choice for financing your business needs.

The good news is that Canada has hundreds of different and specialized financing sources... in fact we think quite often that our clients main challenge is simply identifying who those sources are and matching their finance offerings to their own specific needs . Some organizations are actually very significant entities and offer a broader subset of business financing less than one roof.

In order to determine the right commercial finance firm it is essential to think senior, or junior. What do we mean by that? Simply that if you are entertaining a senior debt facility it must be recognized by the business owner that that lender requires an overall first security position on the asset or assets being financed . Canadian banks do that well by an all encompassing document known as a General Security Agreement.

In many cases you the business owner aren’t seeking term debt, but an operating credit line. That type of facility in Canada is available from a Canadian chartered bank, but more and more corporations are going against the grain so to speak and seeking out an Asset Based Line (ABL) of Credit that allows them to draw on current assets with numerous other flexibilities.

Numerous boutique commercial loan firms in Canada provide temporary ' bridge ' loans... you guessed it , they are a ' bridge ' to a future re financing of certain assets .

In the U.S. there is a huge industry revolving around what is known as 2nd lien debt... simply speaking a second charge behind the first charge of any asset? This type of financing in Canada is somewhat rare, if not available at all.

There are some great hybrid vehicles... and we're not talking cars here! These hybrid business financing offers take on a senior debt position, at the same time structuring some equity participation for the lender. Talk about a lender that motivated to help your firm! We hasten to add also that these types of arrangements can also be facilitated with privately controlled companies, not public entities as might be assumed.

Leasing companies in Canada are highly specialized asset lenders that finance every type of asset imaginable, even patents and technologies n some cases. Many firms take the leasing industry scenario one step further, and finance assets a sale leaseback basis, providing additional cash flow to existing owned assets.

A somewhat robust VC and Private Equity industry also exists in the Canadian business financing landscape. They facilitate growth, re financing, going private, going public and very specialized scenarios.

Numerous firms in Canada utilize merchant banks - these again are specialized firms that bring capital into your business, along with their own. They are compensated in the form of fees, and of course equity ownership with respect to any direct investment in your firm.

Bottom line. Pretty clear we think. If you are looking for a commercial finance company you've got numerous choices, they might be debt, equity, or hybrid financings. Business financing made simple, if you've got some expert guidance in place that places your needs and your own particular situation at the top of the priority list!
Seek and speak to a trusted, credible and experienced Canadian business financing advisor when looking for a commercial finance company in Canada.



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/commercial_finance_company_financing_business.html

Have Questions On Leasing Finance and Equipment Financing In Canada ? Common Sense Approach To Asset Lenders

Work Through The Lease Finance Process With New Confidence


What questions and issues should owners be asking or facing when it comes to leasing finance in the Canadian marketplace . What key issues in equipment financing should business owners address when it comes to working with asset lenders for structures that work for your firm .




In a perfect world, ( know it's.. not! .. but ..) your ability to successfully structure business financing is critical to your firms survival. Let's ensure you've got a solid handle on leasing financing when you're entertaining equipment financing as a strategy for success. And in the process we'll ensure you've got a solid handle on asset lenders in Canada.

The long term goal is to make equipment financing make sense. That of course means ensuring you have a reasonable level of pricing on your transactions, and, most importantly, that the proposition put forth by asset lenders in Canada makes sense... for your firm! So it’s therefore about asking the right questions and following up on those to make good business financing decisions.

Common sense dictates you want to talk to asset lenders based upon your final choice of an asset that will add value... and profit to your business. You will find yourself going through a three pronged stage of negotiations and fact finding (for you and the lessor)... on then to approval and commitments by both parties, and finally documentation and funding. Seems simple right, so where then do things go wrong?

Your firm makes a stronger case for leasing finance when the asset you have chosen allows you to grow your business and generate additional cash flow. But at the same time you should also be thinking of the term of the transaction, i.e. how long will this asset last. In a perfect world you want to try and best match the useful life of the asset to the term of the lease. In initial discussions with asset lenders ensure they understand the assets value in your overall growth and future plans... that’s important.

Choosing the asset is half the battle, ensuring you can pay for it is of course the other half. That's why some basic cash flow analysis and payment budgeting should be critical at this point in your finance decision. A simple financial calculator can calculate estimated lease payments in seconds. Although we're still at the beginning of the transaction give careful thought to what will happen to the asset at the end of the lease - for example, do you want to use it, return it, re finance it for an extended period of time, etc...

We've spoken recently on ' the box ' in leasing. What's the box? asks our clients. It’s the proverbial credit box - that cage that lessors try and put you in to ensure you perfect fit into the box modules - deal size, asset type, your credit quality, pricing re interest rate they will charge... etc.

We've seen clients spend countless hours, days, weeks, even months! muddling their way through the boxes. This where some common sense information on what type of equipment financing company most suits your firm is worth a lot .. in terms of time and money. Your ability to present the asset, your credit quality, and your long term viability when it comes to making payments is critical at this point.

Experts. You can’t be expected of course to know the substantial and fragmented nature of leasing financing in Canada. Who are the asset lenders, which one suits your perfectly, and are you working with the right firm if you have had financial challenges in the past that will be convincingly solved in the future.

We continue to believe the common sense approach to working with an expert in any area of your business makes sense .Speak to a trusted, credible and experienced Canadian business financing advisor to ensure you have the questions, and the right answers! in place for Canadian asset lenders. Allow the power of leasing finance to help you over achieve on your business finance goals.





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/leasing_finance_equipment_financing_asset_lenders.html

What To Consider When Funding Your Company Via Accounts Receivable Financing As An Alternative

Use A/R Finance For business Capital – After You’ve Read This!

Information on accounts receivable financing in Canada . When funding your company with business capital via a/r finance consider these key issues .


So, you're almost there. After evaluating a number of both traditional and alternative business financing and capital cash flow alternatives you've chosen a non bank accounts receivable financing strategy as your new form of company funding.

So far so good. Right? But let's get you some expert help, guidance and tips around selecting the right strategy for your new financing. We'll focus on some key issues that traditionally in our experience have made it hard for client to both understand and be successful with this form of working capital financing.

First things first, so lets cover off a very basic question - which is simply ' how does the facility work on a daily basis?’ You need to understand that the amount you can borrow in A/R financing revolves solely around your ' eligible ‘receivables. So what do we mean by eligible? Depending on who you are dealing with ( we prefer you deal with the good firms, not the less than good ones !) eligibility traditionally revolves around your Canadian and U.S. invoices under 90 days from an a/r aging point of view . Also, if you find you are unable to finance clients who are U.S. based you are absolutely working with the wrong party.

Drawing on a day to day basis on this facility are based on your a/r aging report .Company funding of your receivables revolves around your ability to produce an a/r aging that balances of course, and reflects invoices that are due and owing by your clients .

Many of our clients don’t understand a key process around which your day to day operation works. It’s called a 'blocked account ' process. Sounds complicated, but really isn’t. Here's how it works. Receivables that you submit are financed on a daily basis, with those funds being deposited directly into your regular commercial bank account. An accounts receivable financing company is generally, almost always, NOT a bank, but you still use your general bank account for all financing under this facility. Funds are usually deposited daily, as you need them.

But, when you clients pays, the process changes. You deposit those funds into a blocked account which is in the name of your financing partner. That makes sense, since you have already received the benefit of those funds. At this time any holdbacks that are in place with your facility ( generally no more than 10% are paid back to your firm, less of course , and here it comes .. the financing charge!

And now to that almighty question that we get, pretty well every day these days. What is the financing charge from a funding company for accounts receivable financing? This form of financing in Canada should typically not exceed between 1.5-2% per month. What clients need to bore down and understand is some technical terminology around what the actual charged ' discount ' (aka interest financing charge) rate is, what funds are held back in reserve on each invoice, and any small nominal charges re wire transfers, processing, etc.

Want to understand A/R finance a lot better? It’s easy to get bogged down in the technical terms, and some of the players out there do a great job of confusing this valuable type of financing. Focus on how it works, what it costs, and more importantly who you're dealing with. Consider seeking and speaking to a trusted Canadian business financing advisor who can assist you in ensuring this for of business capital works... for your company!


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/accounts_receivable_financing_company_funding.html

A Common Sense Way To Choose Canadian Business Leasing Companies For Equipment Loans – A Lease & Loan Alternative

Make the Right Choice for Lease Finance in Canada



Information for Canadian business on choosing the best method to select leasing companies for equipment loans – A lease and loan alternative selection process .




Rest assured you're in the same boat as thousands of your competitors - and whats that boat about? Simply not knowing who or what to turn to when selecting business leasing companies for an equipment loan for your business. More importantly, leases and loans that makes sense, not the kind where you wonder if your firm got a transaction at market rates, terms, and structures.

So is there a fast track to selecting the right lease finance company for asset financing that works, and makes sense? There are a couple of challenges we try and help clients overcome, not the least of which is the fact that there are tens and literally hundreds of firms all across Canada that ' seemingly ' fit your needs. And, and it’s a big and... if you have all the time in the world to develop relationships with these hundreds of firms, well then... let’s just say we're jealous!

But not knowing who to turn to can in fact, as many clients have experienced, cost you tens and thousands of dollars, depending on your past experience with leasing companies in Canada. One alternative is of course to send a lease bid document out to a large number or select number of parties. That makes sense for government agencies and large corporations probably, but not for small and medium sized businesses in Canada.

The reality is that all those lessors out there have their own unique business models, and are you ready... because this could be painful... they are going to try and fit your firm in a box . In a box? We're talking about the ' credit box ‘... that elusive credit policy that seems to be understood, by the lessor, but not perhaps yourself. You see each firm (who by that way had to go out and borrow money to lend it to you) has a credit box. In that box is a set of criteria around asset types, deal sizes, ratios, covenants, personal guarantees, outside collateral, years in business... well we think you get the drill

And oh yes, if there were one type of business equipment leasing company in Canada the search for asset financing might not be so daunting. In reality those hundreds of different firms are actually in 4 sub categories.

Those sub categories are bank lessors, independent leasing companies, captives (ouch! that even sounds painful - do they have a box also?) , and insurance companies.

So do we have a favorite and a recommended solution for each and every business owner and financial manager in Canada? Actually we do its number 5 in our list of 4! We're talking about an independent, experienced, trusted, and credible Canadian business financing advisor... one who should be an expert in lease financing. Utilize their experience for market knowledge, eliminating financing sourcing time, and ensuring you are getting market rates in the current low interest rate environment of 2011 where in fact lease financing is very competitive and wants your business. Adding value and saving your firm money is a powerful double punch in Canadian asset 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 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/leasing_companies_equipment_loan_loans_business.html

Is There A Small Business Loan From Government ? Yes, Here’s Why Canadian SBL Loans Work !

Canada’s Small Business SBL Loans Solve Your Finance Challenges

Information on why the small business loan from government is one of the most sought after loans from small and medium sized businesses in Canada . Let SBL financing help your start up or established business.


If we had to separate some of the major confusion surround two to three key areas of the small business loan from government in Canada , aka ' SBL loans ' it would be quite easy, as clients seem continually mis informed about some of the key attributes and benefits of this program .

Let’s get ' small ' out of the way first. The Canadian SBL loan underwritten by the government (more about that later!) actually goes to $ 500,000.00 dollars from a lending limit. That’s one of the initial sources of confusion for our clients... because the 500k amount refers solely to your utilization of the facility for a real estate deal. All other transaction under the program is capped at 350,000.00$.

In many cases it actually might make sense to do a real estate deal under SBL loans. For example your 10% required equity under the program is significantly less than the 25- 30% or more that is required by other lending institutions under a conventional mortgage scenario.

We've done a calc and a 500k mortgage utilizing the SBL would run you around 5500 a month for a commercial transaction. That is a higher payment than a longer amortized commercial mortgage but consider the fact also that your required permanent own equity into the deal is only 10%, and you personal guarantee under the program is actually only 25%. Try getting that lower personal guarantee from another commercial lender... we dont think you'll be able to.

Let's circle back again to what the word small means in a small business loan from government sources. The program, which actually is officially called the BIL /CSBF program actually stipulates that your current or projected revenues cannot exceed 5 Million dollars per annum.

As you can imagine, and as we experience, that covers thousands of business in Canada that should be accessing the program, but either aren’t aware of it or don't fully understand some of the rules and guidelines of the program .Oh, and by the way, almost 7500 Canadian firms used the program in 2010... so somebody out there, including your competitors perhaps?.. accessed over 957,000,000.00$ in capital in 2010. So we think it’s about time you got on board.

We think the program works for a couple of great reasons... it usually can finance companies who would not otherwise be able to receive traditional financing - aka your ' friendly chartered bank ' , and , secondly, it covers the financing of assets that you need to grow ( or start ) your business .

The two main asset categories that the program finances are equipment and leasehold improvements. That covers a lot of what you need to be successful. And by the way things such as computer software are covered under the program also. as that generally falls under the equipment category.

So as a Canadian small business owner do you feel challenged on whats available and how to proceed to successfully execute on SBL loans financing. Speak to a trusted, credible and experienced Canadian business financing advisor on why the small business loan from government, aka ' the SBL ' will help your firm go to the next stage of its growth or development.



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/small_business_loan_from_government_sbl_loans.html

Don’t Risk Losing Out On Franchise Financing Loans - Info For Canadian Franchisees Re: Franchising Loan Success

You’ve Got An Important Decision To Make - So Get Informed On franchise finance in Canada

Information on Canadian franchise financing . What types of loans are available , who is lending , and is there one franchising loan strategy that makes the most sense .




The reality of owning your own franchise business should not be over shadowed by the risk of not obtaining the right, and full amount, of franchise financing you need for a franchising loan. So let’s examine the right, and wrong way, of franchise loans and lending in the current environment.

The right amount of financing you need for your acquisition is often a somewhat stressful time in the total process of buying a business in this segment of Canadian business ownership.

Commercial lending financing does exist in the Canadian environment, it’s a situation of knowing what’s available, and then, of course, executing on completing the financing. Sounds simple, but many Canadian would be entrepreneurs often find themselves challenged by the whole franchise financing journey... and in reality it’s a process, not a journey.

In a perfect world you are looking for a franchise loan that has low or at least acceptable interest rates, nominal fees associated with the transaction, and has the right term or maturity that suits your payback plans and general cash flow situation.

But, does such a loan exist? It actually does, and you'd be surprised where you might find it. Many clients tell us they have spoken to the Canadian bank with whom they typically have had a long term relationship, only to find that little information has been forthcoming as to how they might be able to successfully finance their new business venture .

Naturally any bank that finds you willing to personally pledge and collateralize your home, savings, etc is very anxious to have your business and approve that loan, but it mixing your personal assets with your business venture the optimal solution. We find it rarely makes sense to follow that strategy, buy hey... that’s just us.

In Canada the financing options of franchise lending and loans is available, but somewhat less limited than in the U.S. . . . One or two large firms dominate the major franchise financing opportunities in Canada - these firms focus on the largest name brands and larger transactions that in many cases can range up to several million dollars in total financing required.

But what about the hundreds, even thousands of franchise loans that are required for purchases in the 100-500k range. Who finances those, and if they are financeable does the financing come with those low rates and great terms and structures we spoke of previously?

Actually the Canadian BIL/CSBF loan program addresses that question pretty perfectly. It finances your franchise on terms that compete with the big boys. And we're always rooting for the little guy!

The BIL program assists business purchasers such as yourself to effectively finance the franchise you wish to purchase. Rarely will your franchisor be able to assist you with financing so your ability to prepare a solid 'package' of info and position the package from a solid financial point of view is critical. Other financial solutions such as specialized equipment and asset financing can also round out your financial solution.

Bottom line, franchise financing should not be a risky or stressful time for the completion of your business acquisition. Speak to a trusted, credible and experienced Canadian business financing advisor who can help you complete franchise financing with lending that makes sense... today.

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