Understanding the SBL . The Canadian Small Business Financing Loan Is A Winning Finance Strategy

Obtain Capital Financing You Need To Grow Or Start A Canadian Business


Information on the ‘ SBL’ . The Canadian small business financing loan provides asset financing to start up and small businesses in Canada via Industry Canada.




Understanding the Canadian Small Business Financing, aka, the ' SBL ' is not as hard as Canadian business owners, start up entrepreneurs, or first time franchisees might think.

It's those three categories of business in Canada that are typically the ' prime suspects' for success financing approval under the SBL.

So are there ways to fast track and maximize success under the program. We sure think there are. It probably begins with understanding the basic benefits and attributes of the program.

A simple overview of the basics is as follows. The program is sponsored by Industry Canada, a federal department in Ottawa. That’s exactly right where you involvement with the good folks at Industry Canada ends, because as nice as they probably are they only monitor and sponsor the program. Your actual interface to approval and successful receipt of funding is via your Canadian chartered bank, which administers and funds the program under the governments guarantee to the banks.

It is of course helpful to understand what can be financed under the program , that’s where clients we talk to have received a lot of mis communication about what's eligible and what isn't. In fact only a few asset categories can be financed under the program. They include leasehold business improvements, equipment and tangible assets, real estate (rarely used under the program), and miscellaneous items such as computer application software.

While we are often amazed at why more businesses don’t use the SBL to finance real estate part of that simply might be that some of the amortizations available might not make sense in a commercial mortgage sense.

It's therefore important that you have proper asset descriptions for your Canadian small business financing loan needs, allowing you to quickly determine if they are eligible under the program. These might be in the form of quotes from vendors, invoices you have paid already for which you want reimbursement, or quotes from prospective suppliers detailing the asset, service, or price. Just makes sense, right?

It's somewhat of a little known fact that items you have paid for can be in effect re-financed under the program if they under a 6 month timeline. In certain cases an appraisal might be required, which might come into play when there is a question about asset valuation. We point out to clients that the minimal cost of such an appraisal might actually work in your favor, as the appraisal required is usually just a fair market value appraisal.

The different asset categories don’t alter your basic rates, terms and structures under the program. They are constant. Amortizations under the loan are 5-7 years, rates are just 3% over prime, and if we had to pin down one of the biggest attributes of the program it's that clients are required to fully personal guarantee the loan.

We've hopefully demonstrated that taking the time to understand the SBL itself can save you time and maximize financing ability as well as the overall timeline to get approved, which in many cases is just a matter of days .

If your banker isn't 100% up to speed on the program consider seeking and talking to a trusted, credible and experienced Canadian business financing advisor who will put you in fast track mode on the Canadian Small Business financing Loan 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/sbl_canadian_small_business_financing_loan.html

Making Sense Of Franchise Loan Financing In Canada . Business Loans That Work. Business Loans For Franchising

Pitfalls and Tips on Franchise Financing In The Canadian Franchise Industry

Information on franchise financing in Canada . What issues to address for your business loan. Franchising Loans In The Canadian Marketplace.



A lot. That’s our description these days about what's happening in franchise financing. Canada has hundreds of franchising opportunities that abound; it’s just sorting through the right opportunity and matching business loan / loans to fulfill that entrepreneurial dream.

Let's sift through some of those challenges, allowing the franchisee to realize on the business ownership dream.

Many clients we talk to seem to think that a tougher economy makes it tougher to get a business loans for franchise financing in Canada. We don't necessarily feel that’s the case, if, and it’s a big if, you have done your homework and have a game plan.

That game plan includes planning, ensuring you have the expertise and sources to get your transaction completed. And all of those financial needs in many cases need to be financed differently. Those needs might include the actual franchise fee itself, financial planning that covers off your royalty fee, as well as inventory, working capital, and leaseholds and equipment.

Franchise sizes vary significantly in Canada. Many are Canadian organization, while others are units out of a U.S. parent who has a direct organization in Canada or in other cases works through a Master franchisor who has purchased a territory - Canada! (Talk about a big territory!)

Your personal resources play a significant part in your overall franchise business loan financing plan. It's important to create a personal balance sheet that allows you get a sense of your overall liquidity. Simply speaking, what you have, and what you owe.

The importance of that document can be over stated. Both franchisor and your franchising lender want to get a sense of who they are dealing with, both from a financial and business experience point of view. And by the way, your personal credit history has a huge impact on your ability to both acquire the franchise, but moreso, get it financed!

There are some interesting trends happening in the franchise industry in Canada. Many entrepreneurs are actually increasing their chances of success, (or failure) by trying to acquire multi units at the same time. We generally caution clients who are looking at multi unit deals to ensure they have the financial bench strength to go the whole process. It's absolutely critical to also ensure they have legally structured their total opportunity to ensure the failure of one unit doesn't take down their entire empire!

The other key trend we see a lot of today is that multiconcepts seem to be popular. This has the owner juggling multiple brands, typically in the QSR (quick service restaurant) industry. So if they didn't think one restaurant was enough of a challenge, how about two!

One big, now scratch that, huge mistake that franchisees make, and we see it often, is the financing of a new store out of the working capital proceeds of their other store. Inevitably Murphy's Law sets in and the resources and financial reputation of both entities are strained to the point of collapse. Our advice, consider financing each unit separately on its own merits with some additional new equity.

We can’t begin to list all the risks and rewards of a franchise opportunity in Canada. But we can ensure franchisees that careful financial planning, with expertise, is critical .Speak to a trusted credible and experienced Canadian business financing advisor on making sense of franchising opportunities in Canada. Minimize the risk, maximize the reward.





Stan Prokop - founder of 7 Park Avenue Financial –


http://www.7parkavenuefinancial.com


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


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

The Business Case For ABL Asset Based Lending Canada . The Ultimate Credit Revolver For Business Financing?

Considered Financing Your Business In A Different Way?


Information on abl asset based lending in Canada. Credit revolver deluxe!



The infamous ' business case '. We're told its a tool that ‘supports planning and decision making ...’ . Is there in fact such a case to be made for business owners considering ABL asset based lending in Canada via a credit revolver facility versus bank lines of business credit? We think so. Here is why.

We agree that more isn’t always best in business, that's for sure, but isn’t the fact that your company can generate more borrowing capacity based on the sole criteria of assets ( not rations, covenants, personal guarantees, outside collateral , etc) an impressive point. And remember, just because you have the ability to draw down additional working capital and cash flow on a daily basis doesn’t mean you have to use it. But boy, knowing its there has always helped.

More borrowing power is based on the same ' borrowing base ' certificates you might currently be utilizing at your bank. You assets of inventory and accounts receivable of course substantiate that base, and typically your receivables and inventories are margined at 90% for a.r and 30-70% range on inventory.

Many clients we meet have a traditional mix of A/R and inventory in some per cent age mix. However Canadian business owners and financial managers shouldn't think the A/R and inventory relationship is ' cast in stone '. It is not. You can still qualify for an ABL asset based line of credit in Canada if you just have inventory, or if you just have A/R, or if in fact you have both but one significantly outweighs the other.

Example? A good example might be a major retailer who has a huge inventory component on the balance sheet, but sells of course on cash basis, i.e. no receivables.

So is there an industry when our ' business case' doesn’t make sense for a credit revolver? We can make a general statement that all firms in Canada, regardless of size of nature of business still qualify for this type of financial vehicle. Naturally pricing, terms, and margining will always come back to analysis of the asset class.

Growing or just surviving are two very good reasons to consider ABL finance in Canada. But here’s a solid business case to be made - These facilities can also be used to acquire a competitor or strategic partner. In fact it works to your firm’s advantage to consider ABL financing for that type of transaction because it minimizes cash required to complete the deal.

So, the business case for ABL. It’s about benefits, return, and financial justification. Consider ABL asset based lending as making a great business case for your firms financial underpinning. 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/abl_asset_based_lending_canada_credit_revolver.html

Danger Signs ( And Solutions!) For Canadian Working Capital Financing . Real World Cash Flow Solutions

Solvency Solutions For Canadian Business

Information on working capital financing & Cash Flow Solutions for Canadian firms.


Cash flow solutions are sort of best implemented when you know what the problem is. Makes sense, right ?We're discussing working capital financing and the danger signs your firm needs to look for to both prevent and of course solve some of those problems .

The challenge in business financing many times is that both the challenges and the solutions to business financing aren't readily obvious. The good news to that story is of course that many finance challenges can be fixed with some very immediate solutions.

And there are more solutions than you might think which becomes readily obvious every time we talk to a client. By identifying working capital problems early in the cycle allows you to prevent a much larger problem down the road?

Shrinking working capital is often the most obvious problem. The irony here is that many firms are in fact growing, and profitable (on paper - profits do not equal cash!) But a combination of external factors or losses, or hyper growth all can lead to insolvency.

Many business owners view bank credit as somewhat of a blessing, if in fact they can get a business line of credit from a Canadian chartered bank. This facility allows you to borrow against receivables and sometimes inventory based on pre established margins. The quick example is that 99% of eligible business can borrow against 75% of their total under 90 day receivables.

Operating lines of credit work great if you are growing !We can say that for both traditional bank financing and non traditional solutions such as receivable financing, inventory finance, tax credit finance and monetization, etc.

A real danger sign though is when your business has stopped growing and credit facilities, both short term and long term are in place. An even worse danger sign is when Canadian business owners and financial managers use the line of credit to unwittingly mask some other problems such as issues in their organization, financial or operational mistakes, or being at the mercy of some external event - i.e. the loss of a key supplier or client.

In general if you are operating at a loss and your balance sheet accounts aren’t really changing cash flow should be viewed as trending down, and that’s a danger signal.

What about the issue that we have referenced a couple times already, strong growth? There isn’t a more classic good news/ bad news scenario. Sales are great, inventories and receivables are up, and cash is down. In fact any expert will tell you strong long term growth is better when its planned, not just happening .

There are numerous danger signs as we have noted when it comes to cash flow solutions for working capital financing shortages. In Canada these solutions include asset based lending, invoice financing , sale leaseback of long term unencumbered assets, tax credit monetization, and purchase order and inventory finance .

Speak to a trusted, credible and experienced Canadian business financing advisor on both avoiding, and oh yes, fixing those challenges.




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/working_capital_financing_cash_flow_solutions.html

Caution - Danger Ahead ! IT Finance And Computer Leasing . Technology Financing Tips

Good Information Spells The Difference In Technology Financing

Information on IT Finance. Technology Financing And Computer Leasing Covered!






It's probably just us, but we think there’s no aspect of equipment financing in Canada where one small piece of info could cost you, or make you thousands of dollars. Let's cover off some IT Financing (IT = Information technology) basics. All of a sudden that cautionary road sign up ahead wont be as much of a concern.

Although the actual benefits and economics of any lease should always be considered it just seems more of a need when we are talking about IT finance for your infrastructure, computer, and even telecom needs. The challenge is actually pretty basic, matching a financial solution to those fast paced (and expensive) technology needs.

So know what you will face, what decisions you need to make now, and during and at the end of your lease financing is, well, critical!

The reality of tech financing is you have to be pretty sharp and well informed in several key areas - just knowing those areas is important. They include documentation, structure, as well as your rights and obligations in certain lease arrangements.

Hardware makes up probably the majority of dollars in computer leasing transactions. Whether it be telecom, server, pc, laptop, notebook, tablets, or even ' cloud ' type solutions that’s where the buck seem to be. Canadian business owners can finance hardware separately through 1 of the 2 lease vehicles available, or your transaction can be combined with soft costs such as application software, installation, etc.

Where hardware financing gets somewhat tricky and challenging is when it comes down to operating leases, residual values, disposition of equipment at end of term, etc.

The majority of Canadian business has financed larger computer leasing and it finance technology projects via operating leases. However, the next several years major changes in international accounting rules might well render a lot of the benefits of operating leases less effective, so it’s critical to stay on top of this development in accounting.

Although larger more sophisticated Canadian businesses have been utilizing software financing for years many smaller and medium sized businesses sometimes aren’t even aware soft costs such as software can be financed and bundled into your IT finance transactions. A good tip here is to ensure you understand how the cost of software is priced and blended into your entire transaction. It is most often amortized in full and sometimes attracts higher rates.

Medium sized and larger corporations are encouraged to take advantage of a Master Lease arrangement. A one time negotiation of terms, rights and obligations is going to save you time and dollars in the years ahead, along with the ease of simply adding on additional schedules of assets to be financed when you need them.

A common misstep in computer leasing is the failure of Canadian business to separate the financing from the manufacturer of the equipment, especially when it comes to warranties, service, and the right to use. So be careful in addressing issues separate, with the right party.

The largest benefits and the most risk in IT finance come from what happens during at end the end of a technology leasing transaction. Investigate and understand thoroughly your rights to terminate, upgrade, or renew at the end of the term. If you have entered into a capital ' lease to own' type scenario monitor your purchase options at the end of term.

Is there anything more ' mission critical ' than technology, computers, and telecom assets in Canadian business? Debatable, but doubtful don’t you think? Speak to a trusted, credible and experienced Canadian business financing advisor for your IT finance needs. All of a sudden that ‘Danger Ahead’ becomes manageable.




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/it_finance_technology_computer_leasing.html

Understanding Receivable Financing Pricing And Rates Is Not Impossible! Invoice Discounting 101 - Now It’s Clear !

Are You Getting The Best Invoice Discount Pricing In Canada?

Information on receivable financing and invoice discounting rates in Canada. Understanding Factoring Prices .



' Misunderstanding all you see ' ; those are lyrics from the Beatles ' Strawberry Fields ' , and talk about being a bit appropriate for the confusion around receivable financing and invoice discounting rates in Canada .

So, talk about confusing... lets try and clear up some real basics around receivable finance in Canada -mostly along the lines of how it works and how it is priced. Clients are always providing their version of what they think they are getting but the reality is often far from that.

A/R finance is used by thousands of firms in Canada to address cash flow shortages when in fact more traditional financing simply doesn’t make sense or can't be attained.

A good way to clear up some of the confusion around this method of business finance in Canada is to address it head on, which is simply to say that this finance mechanism isn’t financing per se, it’s simply the sale of one of your assets at a discounted rate. So from that perspective even we own up to being guilty sometimes around the terminology!

Another way of looking at our issue to frankly address what might be perceived or real drawbacks or negatives around A/R financing. The discount rate used on receivables when you sell them, in Canada, ranges anywhere from 1-5%. To be fair, the average discount rate tends to be in the 2% range.

Invoice discounting rates make the most sense when they are used to take advantages of opportunities for growth and higher profits and sales via asset turnover.

Part of the reason A/R finance is viewed as confusing by many is that it’s essentially part of an unregulated industry. Clearly our banks are regulated and you know what you get (when you can get it!)

So what does that all mean to Canadian business owners and financial managers. Simply 4 words. Pick a solid partner! Or advisor.

Where invoice discount financing gets confusing is in the terms/contracts, and the rates.

So how do you address that pricing in terms of benefits? Several factors have to be taken into consideration. They are the quality and age of your receivable portfolio, the ' opportunity cost' of what you can do with additional cash flow, and the actual cost of carrying your receivables and inventory as opposed to monetizing them more quickly via a receivable financing strategy.

As we have said in the past carrying receivables anywhere from 60-90 days can easily cost you anywhere from 10-20% when you factor in days to pay your firm, admin costs, lost opportunities, your current financing costs, etc.

So why do Canadian business owners and their finance staff stumble on the issue of receivable finance. It’s partly, as we have shown due to their inability to overlook the total pictures in the areas we have demonstrated above.

Invoice discounting rates makes the most sense when you look at opportunity cost. If you finance your receivables as you generate them you lower the balance sheet investment and reduce your day’s sales outstanding.

A quick example - if your annual sales are 1.2 million and your daily sales are $3300 per day for example you could add $10,000 to cash flow by a 3 day reduction in DSO. A 30 day reduction adds 100k to cash flow!
Charges or costs for a 100k per month facility equate to a 2k per month cost if you are turning your A/R promptly.

So, confusing. We hope not, although we're the first to admit it takes a bit of time. Speak to a trusted credible and experienced Canadian business financing advisor for clarity on achieving best invoice discounting rates and benefits 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/receivable_financing_invoice_discounting_rates.html

How Competitors Beat You At Vendor Finance and A Customer Financing Plan For Your ( Lost ) Clients

Considered a Canadian Client Equipment Or Service Financing Program ? Here’s How - Easily!


Information on benefits of vendor finance . A customer financing plan increases sales, cash flow and market opportunities.



Here's the problem. You don't have one, your competitors do. We're talking about a customer financing plan for your products and related services. And can we all agree that a competitive disadvantage is not a good thing, which is why Canadian business owners and financial managers might well want to consider a vendor finance program for clients/

So how exactly does Canadian business benefit from the ability to offer customer finance solutions for clients. If we had to sum it all up into one thing we guess it well might be: ‘Increasing the sale of your products '!

The good news is that a customer finance program can be easily put in place either directly, if you have the experience and resources, or as importantly, indirectly via a solid partnership arrangement. And if you choose the partnership arrangement you can pretty well reduce the cost of your program to zero, which is a great price point, wouldn’t you agree?!

The key concept around a financing program for your clients is essentially that it is a strong sales tool. Companies in Canada that use vendor financing tend to form over time stronger relationships with their clients. While the finance industry itself tends to portray this type of program as a ' control mechanism' on your clients in our opinion its more of a customer relationship scenario. but we'll let you decide that one.

It all starts of course in your firm’s sale cycle, and hundreds and probably thousands of firms that utilize vendor finance tools quickly find that simply offering a finance option in many cases gets that purchase order or commitment from your client. Unbeknownst to you clients might well be talking to your competitors about their ability to offer a finance option on the same products and services you are competing for.

Also, at the same time a financial firm who is aligned with your competitors might in fact be pitching your competitor’s product versus your own for their own selfish reasons.

One of the strong merits of a customer financing plan always comes back to the relationship cycle, because even after you have provided your client with a customer financing option the flexibility around financing options allows you to constantly work with your client on upgrades, add- ons, Using a basic ' master lease' allows you to constantly add on new sales and services to your existing arrangement with clients.

Ever wondered how your competitors sometimes seem to have made a sale to a major client in a much shorter sales cycle. If you investigated closely you might just find that your client was less focused on price simply because he was being offered a financing option via vendor finance that made sense and was quick and easy to facilitate.

At the end of the day you can devote money, time and resources to setting up your own program. In many cases that requires a major commitment of time, capital, and oh yes, you have to know what you are doing.
A strong alternative? Work with a qualified third party to set up your own customer financing plan at no cost, at the same time customizable to your own firm’s products, services, and needs.

Speak to a trusted, credible and experienced Canadian business financing advisor on a program that works best for your firm. All of a sudden you may well find that you are now winning and regaining lost clients and sales otherwise not achievable without a finance solution.





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_plan_vendor_finance.html