Commercial Bank Financing In Canada – Solutions and Maybe An Alternative Via Business Banking Competitors!

Canadian Bank Business Financing .. & Alternatives !

Information on commercial bank financing in Canada . What are the key issues in getting approved for the business financing your firm needs . There is in many cases a bank alternative via non bank financing from competitors to the Canadian banking industry .


When most Canadian business owners and financial managers think of commercial finance in Canada commercial bank financing comes up logically as the ' go to ' solution. That seems logical because probably for many decades in Canada it was the only solution. In recent times financing alternatives via bank competitors have proliferated. Let’s examine some key aspects of Canadian chartered bank commercial financing, and perhaps some alternatives... who knew!

Borrowing from a chartered bank in Canada comes under two categories for most small to medium sized corporations ... term loans and revolving lines of credit. Banks are very focused on your cash flow for the simple reason that it, plus additional collateral that is pledged, becomes the source of repayment.

It is well known that the Canadian chartered banks have pretty well the highest reputation in the world for being well run, profitable, and soundly capitalized. That becomes a double edged sword when you are a borrower looking for commercial bank financing , for the emphasis on your overall credit risk, assets, cash flow coverage , and personal guarantees of shareholders is somewhat intense !

When your lines or credit or term loans can’t be repaid in the eyes of the bank then you're deemed ' none performing ‘... (Even though you're working as hard as ever!) .

Over times business owners realize that a lot of the financing they need might not be accomplished by a Canadian chartered bank because of the significant emphasis that is placed on the rear view mirror. What do we mean by that?! Simply that your past financial performance is often a huge part of the overall bank approval decision for your new financing. So even if you have great prospects, new contracts, new owners, new equity, etc, etc, etc the reality is that last years financial losses, or negative cash flows or some other incident in fact will probably preclude you from being approved, at least in the amount that you might desire.

But of course being approved by a commercial bank in Canada for the financing you need pretty well means you are achieving the best finance rates and terms in the country. The banks low returns on commercial borrowers (because of those low rates) are compensated by the low risk they take.

When clients talk to us about focusing on a traditional Canadian commercial bank financing it is our advice that they totally disregard rate (because as we said, there isn’t any better) and instead focus on the ratios and covenants and personal guarantee that make up your financing approval.

And what about those alternatives and competitors to Canadian chartered banks .Over the last 10 -20 years a number of very solid alternative finance offerings are available to you the Canadian business borrower. They include asset based lending via non bank credit lines, confidential receivable financing, equipment financing for new and sale leaseback scenarios. Even more alternatives are available, including purchase order financing, bridge loans, and private equity.

In many cases a lot of the banks actually have started new divisions to compete with these new competitors - however typically in our opinion their same credit standards are in place; that is to say it’s not a bad thing, just the same challenge of getting approved within a bank offering.

Want to discuss commercial bank financing, or an alternative via competitors to the chartered banking industry in Canada? Speak to a trusted, credible and experienced Canadian business financial advisor who can work with you to achieve proper financing for your firm.




Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com
Originating business financing for Canadian companies , specializing in working capital, cash flow, asset based financing . In business 7 years - has completed in excess of 80 Million $$ of financing for Canadian corporations . Core competancies include receivables financing, asset based lending, working capital, equipment finance, franchise finance and tax credit financing .Info re: Canadian business financing & contact details :


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

Create A Customer Financing Program For 10 Cents! Looking for Canadian dealer / vendor funding For Your Clients? Here’s How!

Interested in a Customer Strategy To Increase Sales, Profits, and Cash Flow – Try This!

Information on the benefits of a customer financing program for Canadian companies who wish to implement a vendor funding program for their client base . Dealer /cust. Finance pays off !



Buddy, got a dime? Did you ever think you could increase sales, profits, and the almighty cash flow for a ten cent investment?

More about that 10 cent investment requirement later ; but we're talking about utilizing a customer financing program, often called a dealer or vendor program, for assisting your clients in financing their purchases - of your products and services .

When Canadian business owners and financial managers think of acquiring assets from their vendors / suppliers almost 80% of all businesses consider lease financing as a financial mechanism to acquire that asset. But wait a minute... lets turn that situation around; aren’t in fact yoru own clients thinking about financing options when they are looking to acquire YOUR products and services. You've proven they do, if only because you do it also.

So is the price of any product or service one of the critical aspects of any firm considering a purchase of any type? You bet it is. In fact in surveys we have seen for years ' price' actually becomes an ' obstacle to innovation ' - a term we've grown quite fond of.

So are you in a position to remove that obstacle to innovation that your clients are experiencing. You are in fact, if you choose to develop a customer financing program. This type of program allows your customers to match reasonable cash outflows with the benefits they receive from your product.

There are a couple of different ways you can do this, so let’s cover them off. Our favorite is the ten cent investment scenario we discussed earlier, but in fairness to all parties let’s ensure you understand all your options.

You have the choice of actually forming your own finance firm or division - for many major manufacturers this in fact is almost a must. Think of what GMAC did for GM... Namely allowed their clients to finance millions of cars over the years... how by offering them financing or subsidized financing.

The reality for small and medium sized firms in Canada is that they are probably better served by aligning themselves with an independent third party who has day to day expertise in offering customer financing and funding to customers such as yours. They have the expertise and business model in place

As we said earlier the benefits of a dealer / vendor program (you in effect are the dealer/vendor) are significant. Very significant. They include increased sales, a total solution perception by your customers (i.e. product/service/financing) and lower inventory levels due to the fact that sales turn around faster, bottom line... what they call a faster sales cycle.

So how is it possible to do all these great things on a ten cent investment? Well we've estimated 10 cents as the cost of a phone call, and if you seek out and call a trusted, credible and experienced Canadian business financing advisor with significant lease experience you will be in a position to implement a full customer financing program at no cost.

That advisor will work with you to identify a financing partner(s) that you are comfortable with, thereby ensuring you can use vendor funding for any size of deal of credit quality in your customer base. Many programs can be ' tweaked ' to ensure you have numerous other small benefits that add up to a significant amount of what lessors call ' control' in your customer base. That might include upgrade programs, end of term programs, or Zero per cent financing subsidized by yourselves to increase sales for a short period.


So is that ten cent investment (isn’t calling even cheaper than that these days?!) worth it. We'll let you decide. But your competitors are doing it, so if more sales, increased profits, and a faster sales cycle appeal to you consider making that call for a customer financing 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 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/customer_financing_dealer_funding_vendor.html

Deciding On How To Finance A Franchise? Canadian Franchising Business Loan Info On Financing and Lending That Makes Sense!

Make the Right Decisions in Canadian Franchise Financing

Information on how to finance a franchise in Canada . Getting a franchising business loan that makes sense for the entrepreneur . Financing & Lending tips for the new Canadian franchisee.


Not only do you want to have a solid plan when you want to finance a franchise in Canada - it sure helps when that plan makes sense for the business financing loan / loans that you need!

We think that most Canadian entrepreneurs who are either first time franchisees or perhaps are adding another location to their business would agree that its not as important as to where the franchise lending and business funding comes from, but that you get the full funding at terms that make sense for you personally .

Let's examine some of those key decision points and requirements that you need to fulfill a proper franchise financing solution in Canada.

We think that a lot of franchisees are sometimes overly focused on ' the interest rate ' when they are seeking a franchise loan. That’s human nature we guess, but the reality is that the loan is simply commensurate with your overall credit quality and in line with the types of financing that are out their in the Canadian business financing market - unfortunately that market for new franchisees is somewhat more limited that in the U.S.

In Canada franchises are financed really in only 3 or 4 different manners -- actually 5 we could say if you considered financing the whole franchise yourself through personal savings.

While that might seem a good idea we think in many cases it is not for a variety of reasons - i.e. collapsing personal investments and savings and assets when you don’t have to cant be an overall great strategy. We spoke awhile back to a franchisee who had pledged and used all his personal assets to acquire a franchise - business was slow, and he was unable to secure additional outside financing to re- boot the business because all his personal assets were pledged/gone. Bottom line, not recommended!

So the question then becomes as to how you decide to finance a franchise once you have made that acquisition decision. We'd like to share a couple key points. First of all, whether it’s a franchise or any business whatsoever, it’s financed by two guys, debt, and equity; i.e. what you borrow and what you put in yourself. Spend some time determining the optimal mix and you will best be able to gravitate to the right financing strategy.

In Canada these days we see franchisees putting in anywhere from 10 -50% as their personal investment into the business. Whats the perfect number? The reality is there isn’t one, because each business requires a different amount of financing and has a different mix of assets and financing needs. The key assets and financing needs in franchising are all your initial soft costs, such as the franchise fee, and then comes your costs to open the door, often called the ' turnkey ‘. That turnkey component consists of equipment, leaseholds and opening working capital.

We spoke of 4 methods of franchise financing in Canada .Those are as follows : Specialized commercial finance firms that have dedicated franchise finance divisions , Equipment financing, Working Capital term loans as a supplement to your overall financing, and finally the BIL/CSBF loan . The latter is the government SBL loan that is used by hundreds, probably thousands of franchisees to acquire their franchise. It only has one or two limitations, one of which is that it caps out at 350k, but that certainly covers a lot of franchises in Canada in different industry segments - examples restaurants, service businesses, etc.

So, today’s bottom line? Simply that spending some quality time early on in the process in understand which of the 4 options makes sense for you is a valuable investment. That time, coupled with your business plan and financial projections will help you ensure that you have the right mix of financing solution, as well as a properly chosen business loan strategy for your franchise.

Speak to a trusted, credible and experienced Canadian business financing advisor on how to best decide which financing mechanism 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 . 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/finance_franchise_lending_financing_business_loan.html

Smarter & Faster Canadian Business Financing - Why Asset Based Lending Credit Facilities Work!

Simplify Business Credit With An ABL asset based line of credit !


Information on asset based lending as a business financing ‘simplifier’ for your operating credit needs in Canada .


We recently did an internet search for the term ' business financing ' in Canada. Last month in Canada 18,100 searches were performed for that term. WOW! We're quite sure that asset based lending could satisfy a lot of those Canadian business owners and financial mangers looking for business credit facilities that comes ' smarter and faster '. How? Let’s take a look.

Asset based lending is business to business lending , providing cash flow and revolving credit facilities for firms of all size in Canada . In truth the facilities work for firms requiring a monthly business credit line in excess of 250k, and ranging upward to tens of millions of dollars. We're quite sure that covers many of those 18,100 queries made on the internet.

Asset based lending uses your receivables and inventory by the way to provide you with a lending facility against those two assets. Because of the manner in which these types of credit lines are calculated you can be sure that 99.99% per of the time you are going to have access to more cash flow. And that's what business financing is about, right?

ABL ( asset based lending) business financing is business credit that can be used to grow your business, acquire another business, or simply speaking, fix a lot of the financial challenges that you are experiencing, almost immediately .

A key benefit often overlooked in the approval process is the fact that your firm is now in a position to negotiate better terms and prices for your products and services that you need. Why / because you have ' business buying power ' Vis a Vis your new found access to more business credit.

So when we look at those 18,100 firms that searched for business financing last month in Canada why didn’t these companies simply call you know who... Canada's chartered banks?

The quick answer to that is that they probably have tried to arrange additional or new financing with their chartered bank or credit union, but have exhausted all attempts at approval simply because they can’t meet more rigorous bank qualifications. And , unfortunately, in some cases they have even been asked to leave the bank or find themselves in the ' special loans' portfolio of the bank - we hasten to always commiserate with them that we know that’s not a ' special ' feeling you want to have in business.

In many cases the banks or other private equity type firms will suggest or request that the business owners put up additional personal equity into the business to justify new financing. Asset based lending does not require you to consider that option , simply because you already have the one thing that ABL financing needs to work smart and fast .. Assets!

So how does the ABL lender do it differently then. The short answer is that they place a lot of emphasis on understanding your business, getting regular bi weekly or monthly reports from yourselves on the basics , such as a/r, a/p, inventories, etc. This business financing expertise allows asset based lending to work in pretty well every industry in Canada - its real world working capital finance

If you want your company to be on the growth trail again , without taking on extra debt ( ABL business credit financing is cash flowing your assets, not adding debt to your balance sheet ) speak to a trusted, credible and experienced Canadian business financing advisor - let ' smarter and faster' work for your credit needs.. 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/asset_based_lending_business_financing_loans.html

What Type Of Start Up Business Financing Loans Are Available For A Canadian Company ? Startup Loan Info

Solving the startup financing challenge in Canada


Information on start up business financing in Canada . Starting a company? What type of loan/loans are available , and what do you need to do to successfully complete a startup finance strategy that makes sense.




We're all for hard work and facing challenges, but boy do we respect anyone setting up a business today and looking for start up business financing . What type of company loan/ loans and finance facilities are available for the Canadian entrepreneur?

We can pretty safely say it’s always been tough to finance a start up but in more challenging economic times you can easily assume a hard job just got harder. So what types of financings are available to Canadian entrepreneurs, and as importantly, what do you need to do to get properly prepared to complete loan/loans?

Many of our clients cringe when we ask them for their business plan - its seems a daunting task for many, and certainly doesn’t have to be. Even a very strong executive summary will often do the trick - information about yourself, your background, your new business, and, most importantly, what we call the financial potential. That potential of course relates to being able to pay back your borrowings!

Want to overcome obstacle #1 then, that business plan. Simply speaking, get someone else to do it, an experienced, credible and trusted Canadian business financing advisor. That recommendation can come from a business peer or friend, a banker, or your lawyer and accountant. These people are on the front lines of start up business financing for your company and others.

So what are some of actual borrowings available for start up Canadian companies? They include the Government small business loan - commonly called the SBL. Another government crown bank provides working capital loans that are true cash loans that are in effect unsecured - they require only your promise to pay, and of course that of your new business .

Other methods of financing your start up include receivable financing, aka ' factoring ', which provides instant cash on every sale you make, albeit at a cost. But ask yourself this, whats more important to you at this time, ' the rate ‘or access to capital? In the majority of cases we think its access to capital. Many firms that are retail or consumer oriented have gravitated to merchant cash advance financing, in effect loans made against your future sales. (A little bit of every future sale is used to repay you loan).

Having realistic sales and cash flow projections often makes or breaks the new start up in Canada. The reality is that many clients we meet with bring us unrealistic sales projections, and, on top of that those projections don’t have realistic cash flow attached to them.

Case in point, the business entrepreneur shows revenue of 100k cash coming in of 100k in that same month. Guess what though, it’s not a perfect world, and the reality is that cash, if you are selling to a business, will come in stages in 30, 60, and we shudder! even 90 days. So get realistic on cash flow, and have your plan B ready!

Many physical assets you need can be financed via Canadian lease financing. But be careful to ensure you have the right type of lease in place, and that the rates are commensurate with your overall credit quality, and that the terms and structure of the lease... you guessed it... make sense! (Don’t lease computers for 7 years!)


Many clients we speak to don’t realize the 100% OPM doesn’t work .OPM is of course ' other peoples money ', and Canadian business owners need to address the fact that they require a reasonable personal investment into the business. Whats reasonable? That question comes up pretty quickly !There is no one single answer ; as an example the government SBL small business loan requires a 10% equity injection by the owner . In the cases of lease financing 10-20% down typically are reasonable requests from the lessor.



So whats our bottom line if start up financing in Canada. First, its boy do we respect your entrepreneurial spirit! But pay attention to those details we have discussed, and seek the services of a trusted Canadian business financing advisor who can make that road you have not traveled before a much more pleasant journey, and distance!



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/start_up_business_financing_company_loans_loan.html

Making The Biggest Leasing Mistake Ever? Not Offering Financing For Customers? Customer Financing Programs & Canadian Vendor Loans Work!

Customer Finance Programs = Sales / Cash Flow/ Happy Clients


Information on how Canadian firms can offer financing for customers via customer vendor loans and lease finance programs that will increase sales , cash flow , and provide value added service to your clients .



We're the first to admit we have all made mistakes (could we call them strategic mis-steps?!) in business. Here's one mistake not to make - lose business and sales revenue because you don’t offer financing for customers. Let’s look at how customer financing programs and vendor loans and leases work.

We've spoken recently of ' obstacles to innovation '. That a great term for trying to understand why some of your prospects or clients don’t acquire your product and services. In fact, there is one reason that consistently ranks high in surveys as to why Canadian business owners and financial managers don’t acquire new assets or technologies or upgraded services. That reason? You guessed it, price/cost/budgets.

So is there a way to eliminate one of the largest obstacles to innovation your client has. We've got the answer, and it’s ensuring you have the abilities to offer financing for customers via a formal (or informal) vendor loan or lease program.



The #1 reason for firms such as yours to offer customer finance programs is probably ' sales '! We're talking increased sales of course. The thought of getting involved in putting together such a program might seem a bit overwhelming to some of our clients. But the reality is that if you don’t choose to offer the financing yourself you do in fact have the ability to partner to offer this service to your client base.

So what is a vendor program? It's simply your firm utilizing lease and loan financing to increase sales of your products and services. And yes, services, software being and example can in fact be financed!

Many clients we talk to feel strongly that offering such a solution is simple a strong weapon in their overall sales tool kit.

So why do we feel strongly that offering customer financing is such a good thing. For a variety of reasons. Here are some of them. In business we all agree it’s about relationships, and offering a financing solution to your client base simple enhances that overall business relationship.

All sales people in business probably regard ' the budget ' as the proverbial enemy. Boy is it hard to make a sale of your great product and services when ' the budget ' of your client precludes him or her from signing that P.O. on the dotted line. But lease financing via a customer vendor program allows you to circumnavigate that budget in many instances.

While you might dwell on your own firm’s financial condition remember that the customer has their own situation to think of. Quite often clients don’t commit to your products and services because they ' haven’t got the financing lined up ‘. So unbeknownst to you your customer is out there trying to arrange financing for the acquisition of your product and service. Wouldn't it be easier to hand them that solution, ensuring your sales cycle just got a whole lot shorter?

Remember also that if customers are out there prospecting for financing solution they just might run into a competitor’s product or a financing offer that in fact makes your competitors product more attractive.


So whats our bottom line point today, simply that by offering financing for customers via client financing programs that work you can clearly differentiate yourself from the competition, and enhance your own reputation with your clients . That’s a classic win win unless we're missing something! Speak to a trusted, credible and experienced Canadian business financing advisor who can help you set up a simple program to achieve the benefits of what we have discussed. Whether on a program basis or on a single transaction you'll find customer programs tailored to financing your products work. And that’s a good thing.


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/financing_customers_customer_programs_vendor_loans.html

Straight Talk On Confidential Factoring In Canada – Why Accounts Receivable Financing & Invoice Services Just Got Better!

Fact & Fiction on Receivable Financing In Canada


Information on Canadian confidential factoring and invoice services in Canada . Why C I D ( Confidential Invoice Discounting ) Just made factoring and accounts receivable finance a whole lot better!



We're the first to agree that when one of Canada's newest forms of business financing just got better that’s clearly a good thing! We're talking about the concept of confidential factoring, invoice services that finance your accounts receivable for working capital and cash flow.

Canadian business owners and financial managers demand flexibility when they look to alternate financing methods. If you choose the right facility, as in our case today, confidential accounts receivable financing you have just converted 90% of your receivable investment into immediate cash flow availability.

That benefit becomes even more dramatic when you consider this type of financing essentially gets larger as your sales increase; your financing ability travels locks step with your sales increases. Your revolving credit facility of confidential factoring becomes your new financing safety cushion.

While the majority of our clients use this type of financing for ongoing operations and growth remember also that you have the ability to use this finance mechanism for a number of other reasons - they might include acquiring a business , restructuring your company without the need for additional equity, etc.

Many clients utilize this type of accounts receivable invoice services in the context of also combining their inventory and purchase order financing needs .You've then created a triple combination of financing power for your firm , outside of traditional Canadian chartered bank financing .

So lets just backtrack a bit and ensure you understand the whole issue of confidentiality around C I D; Confidential invoice discounting. When you set up this type of facility you effectively retain total control over your A/R function - you are billing and collecting your own receivables.

Those familiar with traditional U.S. and U.K. type offerings available in Canada know full well that is not the case with the offering that is used by 99% of your competitors. Those firms in Canada that use receivable financing but without a confidential facility have in effected handed their billing , collection, and all important client contact info over to the factor company . Does that type of traditional factoring work? Absolutely. It’s just that confidential A/R financing puts you in control, not your finance company. You bill and collect your own receivables, without any notification at all to clients, suppliers, etc.

Canadian businesses are of course used to paying for added value. That’s just common sense. So then our clients can of course be forgiven for asking if confidential factoring services costs more. The answer is NO! Your advance rate and financing charges are the same with confidential factoring as they would be in the traditional for of notification model used by your competitors.

We would add however that to take advantage of confidential receivable financing a typical A/R portfolio should be at lease in the 250k range. There is no real upper limit on the size of any facility

Accounts receivable financing has filled on of the biggest voids in Canadian financing. It is often mis understood, in no thanks to some of the firms that offer it. If your company is growing, unable to attract more traditional financing then confidential then invoice services such as we have describe are for you . The optimal situation is when your cash flow is being drained because your sales are growing, requiring to maintain higher levels of A/R and inventories, etc.

If you wish to better understand the nuances and yes, the benefits of factoring invoice services in Canada, and which one works best for your firm speak to a trusted, credible and experienced Canadian business financing advisor 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/confidential_factoring_invoice_services_receivable.html