Alternative Financing From Canadian Business Lenders . Special Loan Takeouts Or Growth Challenges ?

Special Loan Status At Your Bank ? Why And What Next?


Information on alternative financing choices for Canadian business owners in a ‘ special loan ‘ environment . What happened and what lenders can assist you now ?

We're fairly sure that most Canadian business owners and financial managers don't equate Canadian business financing with ' shopping ', although truth be told we do hear the term ' shop around ' quite a bit when talking to clients about alternative financing via bank or non-bank ( mostly non-bank!) lenders .

Unfortunately many of these firms are forced by necessity to do their shopping because they find themselves in the ' Special loan ' section of the bank, due to any number of events that have triggered a default situation. The bottom line, turnaround financing is required.

Let's examine some aspects of alternative finance solutions in Canada, as well as a re - focus on key issues within that damaged bank relationship.

It's no real secret that bank rates for commercial business financing are at all time lows .Even bank fees associated with business lines of credits are not all that unreasonable .

A ‘special loan ' scenario unfortunately seems to often tied to ' personalities ‘, i.e. the human side of business. Clients sometimes feel that Canadian banks or their own banker specifically does not ' understand ' their business. In fairness to Canadian bankers they are sometimes just challenging a client and should often be viewed as a ' sounding board ‘for challenges your business might face

A real challenge that drives many Canadian borrowers to alternative financing is the fact that the Canadian banking industry has a limited number of players, unlike the U.S. which as different tiers of commercial and business banking, with hundreds if not thousands of individual players.

Those Canadian business people that have ' been around ' (I guess that’s us also!) know that industries and even specific firms fall out of favor at certain times. We've met numerous clients of the years that have felt that their commercial bank has been almost looking for a reason to end the relationship. With all due fairness to there being two sides of the story who cannot commiserate with the Canadian firms who suddenly find their total future and destiny in the hands of a third party.

Probably the best advice we can give a client is to choose a banker that is relationship oriented and had internal credibility within her or his bank. Our belief - all banks are the same; all bankers are not the same.

So if that banking relationship is in fact over, what are the alternatives? The good news is ' there are a lot!) . Using our ' shopping analogy ' there's some decent choices. They include non regulated asset based finance firms, equipment lessors who specialize in sale leaseback and refinancing of assets, and subsets of asset finance which include receivable financing ( factoring ) , inventory financing, and combinations there of .

More esoteric solutions such as purchase order finance and tax credit monetization are also readily available. Firms that are either on the verge of entry into a ' special loan ' category, or who find themselves there already have ample room to re-exit under the right conditions.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with achieve refinancing success.






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/alternative_financing_lenders_special_loan.html

Wondered How The Canada SBL Government Business Loan Works?

Get The Advantage You Demand & Deserve In Canadian Business Financing

Information on the Canadian government business loan – aka the ‘SBL ‘ program . Understanding the program is your key to success


Although the majority of Canadian business owners and financial managers have heard of or have some knowledge of the ' SBL ' , aka the government business loan most do not fully comprehend how this financing program works.

Although the word ' government ' is sprinkled liberally through all the jargon and conversations we hear about the program the reality is that you have essentially no direct involvement with any government personnel or the perceived bureaucracy that we as Canadian business owners associate with the program.

We're going to assume you're taking that as good knows, although we've got nothing against the good folks in Ottawa.... (When they are doing things properly!)

Industry Canada is the department that sponsors, administers, and to some extent markets the program. They are committed to getting businesses like yours capital, via Canadian chartered banks, that you need to grow and operate your business.

The government in effect guarantees your lender. Since the inception of the program Billions of dollars have been funded under the program.

In general terms the program is designed to help your business secure equipment, land, and leasehold financing for long term needs. Unfortunately many business owners in Canada misinterpret the SBL government business loan as a potential cash or working capital loan. That is 100% not the case; it finances assets and real estate.

When you fully understand the program you comprehend that your local lender, predominately Canada's chartered banks are the ones that actually spur financing growth under the SBL. So if you have a need tor debt that falls under the program parameters you fund your transaction locally.

Understanding the lending parameters of the program is key to your success in completing the financing in a timely manner. Oh, and by the way the program has a lending cap of $ 350,000 ($500,000.00 on real estate), which we think takes the ' small ' out of the small business government loan. That's not chump change!

The essential loan parameters of the program are as follows - 5-7 year amortizations are typical, giving you ample time and low monthly payments. Rates are 3% over Canadian prime, and a small admin fee is assessed by the government as part of the application. (You can often have this admin fee financed as part of your transaction!)

Banks in Canada of course typically evaluate loans on the basis of personal credit, income and collateral. Under the SBL you do in fact need a respectable personal credit history, but even if your firm is a start up with no historical cash flow info available you are still 100% eligible for the financing. Here's where a slick business plan or executive summary comes into play quite nicely - simply demonstrate how future cash flows will repay the loan.

The government guarantee is for the majority of the loan and can only be invoked if your business defaults on the loan, so the risk is jointly shared by the bank and the government, but mostly by the government.

Understanding how the SBL government business loan works is key to a successful financing. And by the way, getting approval is half the battle, you also need to have an understanding of how the loan is administered, so that’s worth some time investment also.

Speak to a trusted, credible and experienced Canadian business financing advisor on ensuring you understand the process, due diligence and financing of this program which will finance billions of dollars this year for your competitors, and hopefully 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/sbl_government_business_loan.html

2.5 Things You Need To Know About Franchise Loans ! Money And Funding For A Business Loan In Franchising

Power Your Franchise Dream With The Right Financing

Information on franchise loans in Canada . How do entrepreneurs find money for franchising and what type of loan and funding program is available ?


2.5? Actually we'll round that one up to 3. We're talking about franchise loans in Canada. As a potential franchisee you're looking for money for franchising the entrepreneurial dream. Let's cover off some key points in funding that loan and ensuring things are done right.

Point # 1 - Is it possible to go it alone? While it may be possible for you to cover off all aspects of your purchase, including selecting your chosen business, validating it, planning for it, and ensuring it's financed properly we certainly don't recommend that. We remind clients that even some of the largest companies in the world with all the smarts they might have internally, solicit help from their advisors, lawyers, bankers, peers, etc.

In many ways the Canadian franchisee is even putting more ' on the line' than a large corporation, as he or she is pledging personal assets, collapsing some level of savings and investments, and waiving their rights to explore other career or job opportunities by virtue of selecting a franchise.

We think most clients think that a lot of the advice and assistance might be costly. Not necessarily, many franchise consultants who assist firms in fact are compensated by the franchisor, not you, as an example. And the unbiased and professional advice you might get from a franchise lawyer is quite often many times worth the price of admission.

Don't forget also that your chosen franchisor is probably a treasure trove of assistance, including putting you in touch with other unit owner in their system to share experiences and ' how to ' .

Point # 2- Does getting money and funding for franchising loans differ from any other commercial lending .The short answer we give clients is the proverbial ' yes ' and ' no '. Let's clarify. We firmly believe that franchise funding does not eliminate any of the basics of business loans, as compared to if you were starting or buying g your own business outside the franchise model. The same pre- requisites apply. They include a business plan, cash flow planning, evaluating finance alternatives, and ensuring you have the right amount of debt and equity capital

Where things might differ a bit is that in most cases you don't have the same options as the typical commercial borrower. And quite honestly, no matter low large your franchise might be you are traditionally viewed as a ' small business borrower. The bottom line though is that there are concrete options for financing your purchase, they are just a bit more limited,


Point # 3 - How does the franchisee determine what amount of financing he or she needs? A couple key factors come into play here. First of all the obvious one, the size of your franchise. In Canada you can buy franchises for only a nominal investment, or you can borrow and invest up to a million dollars or more. That’s a broad spectrum! Remember also that franchises that require asset financing are going to incur higher borrowing needs. Asset financing in a franchise consists of leaseholds, equipment, computers an point of sale equipment, etc. Many franchisees we talk to unfortunately also are not focusing on the amount of working capital they needs to grow and operate their business after they purchase it.

As an entrepreneur you want to ensure you successfully attain the Canadian dream of owning your own business. That option is being considered by more business owners everyday. North American stats show that approximately 5% of franchises fail. Use our info wisely to ensure you're in that other 95%. Speak to a trusted, credible and experienced Canadian business financing advisor for guidance on your franchise loans.




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_loans_money_for_franchising_funding_loan.html

One Way To Buy A Company . Use ABL Finance Via An M & A Business Loan For Acquisition Financing

Acquisition Finance For Success – The Why And How


Information on acquisition financing in Canada . Consider a business loan via ABL finance to successfully complete your transaction with no money down ? !


There's just a lot of interest these days, it seems, in acquisition financing as a way for Canadian business to achieve various different objectives. One way in which they can be successful is via an ABL finance business loan to finalize that objective.

Why do companies want to acquire each other ? Of course it's for a variety of reasons, including growing sales, becoming a market leader in their niche, cost reduction, or buying the ' secret sauce' technology of another firm.

We're always on the look for some new thoughts in Canadian business financing, so we were drawn to an article in one of the two leading Canadian business newspapers the other day which had the catchy title of buying a company with ' no money down. The article was written by one of Canada's respected investment officers and fund managers.

No money down? And acquire a significant business at the same time? We were intrigued. The essence of the article was that many ' bargains ' are available in Canadian business - it’s a question of finding them! The article went on to say that the essence of such a search, once you have found a target firm, is to go back 50 years. Go back 50 years ? !Actually what the author meant was that at this point in your search it's time to call on Benjamin Graham , acknowledged as the father of value investing by almost all, including his prize teach pet student Warren Buffet .

What's recommended by these ' guru's is to look at ‘ net working capital ‘ - something we focus on a lot in our own preachings. That figure is made up of receivables, inventories and any cash on hand.

What about the other assets though? Essentially it's offered up that they don't mater. We think they do, but Mr. Graham and Buffett actually disagree with us .. the nerve!

So this is where we come in. Where the author of the article focuses on dealing with Canadian chartered banks we prefer a faster better route, ABL finance.

The beauty of ABL financing, via an asset based line of credit is that it can also include the fixed assets that seemed to have been discounted by Mr. Graham and Mr. Buffett.

A true asset based line of credit encompasses our previously mentioned current asset accounts, as well as unencumbered fixed assets. And while the article we referenced focused on bank financing the reality is that an acquisition financing via ABL finance provides a higher margin level on these assets. Typically those margins are 90% of receivables, significant inventory advances subject to appraisal / valuation, and financing for liquidation value of fixed assets.

More often than not firms in the SME sector that want to buy another business can generate no interest in Canada from ' private equity ' or ' VC' firms, as those firms focus on larger transactions.

So, no money down? The jury might still be out on that one, but we do assure clients that an ABL loan is a great financing alternative when you are looking to purchase another firm for competitive reasons.

Speak to a trusted, credible and experienced Canadian business financing advisor when you want to further your acquisition finance objectives.




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/acquisition_financing_abl_finance_business_loan.html

Don’t Tell Anyone But Here’s Six Points And Strategies For Dealing With Business Equipment Finance Companies For Leasing Success

Here’s How To Make Your Best Leasing Deal In Canada

Information on issues that Canadian business owners need to address to achieve success equipment leasing and asset acquisition with business finance companies


Thousands of Canadian business owners and financial managers turn to equipment leasing in Canada for asset financing.

We can safely say that this method of Canadian business finance can be a simple or as complex as you want to make it. Our goal is to ensure you consider don’t consider an equipment lease simply for the fact that you might feel you don't understand both the mechanics and advantages of this type of Canadian business financing .

Not all benefits might accrue to your firm when considering a lease, but you sure want to be able to maximize the tangible and intangible benefits oi those that do .

It's important to consider the entire lease process as a bit of a ' journey ‘, and when you are armed from start to finish through the whole process your probability of successful financing increases . And we can't over emphasize that just by knowing which parties you should be dealing with will give you a more favorable transaction success.

Let's go through a short 6 point check list of what you need to know to address lease financing success.

Point # 1- Be in a position to properly identify the type of asset and its cost when sleeting your lessor. Identifying the manufacturer, model number etc is critical to business finance companies that may or may not specialize in certain types of assets.

Point #2 - It’s always best to have a formal quote or pro forma invoice for the lessor. Remember the the ultimate invoice, because you're considering leasing should show that the invoice to is the lease company, and the ship to is in fact your firm. Another key point is that lease firms don't negotiate your final pricing and terms with the manufacturer, you do!

Point # 3- Payment to vendors is a critical issue, Always ensure those payment terms are understood by both your vendor and the lessor. That includes the currency component, and whether any sort of pre - payment prior to shipment is required. Good business finance companies and leasing firms are happy to correspond with your vendor and indicate you have been approved.

Point # 4 - Ensure you have a proper approval timeline in place. In some cases lease and busines finance companies have expiry dates on approvals. Complex assets might require additional time for ultimate delivery to your term.

Point # 5- Equipment leasing companies are asset financiers; it’s as simple as that. Don't ruin your relationship with such a firm by not clearly identifying where the asset is, both at inception of lease and during the term!

Point # 6 - Here is where the rubber hits the road on benefits of equipment finance. Simply speaking, make sure you understand the type of lease you require. In Canada that boils down to a capital ' lease to own ', or an operating ' lease to use '.

You can spend a hundred hours understanding some of the complexity around tax, accounting, end of term, and financial consequences of each of those lease types. This then becomes a great time to consider the assistance of a trusted advisor such as your accountant, lawyer, a peer/mentor, etc.

Speak to a trusted, credible and experienced Canadian business financing advisor to ensure you are on track, right from the ' get go ' for equipment leasing success.




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/equipment_leasing_business_finance_companies.html

Business Cash Flow Financing Problems ? Here’s Some Solutions

Escaping The Cash Flow Cycle Dilemma

Information on business cash flow financing problems and challenges for Canadian business . What solutions are available for working capital needs .


Nothing is as entertaining to us sometimes as to talk to a new entrepreneur who aspires to ' get rich ‘in business. It's at that time that things just don't seem that complex; a firm just needs to make a product, sell it, and bank the profits. And when you think of it, that's not incorrect, it just exhibits a bit of inexperience in the perception of that simplicity, don't you think.

The only thing that is missing in that analysis is of course those three magic words, the ' cash flow cycle'. It's that cycle that will dictate whether your business cash flow financing problems are normal, or perhaps seriously in need of solutions .

Clients often mistakenly think that negative cash flows, those huge swings from positive to the negative are in fact a sign of failure. That's the farthest from the truth. It simply means you're ' in line ‘. In line? To get paid of course!

But the preparations you make when you are ' in line ' are what will truly make or break your business. Simply speaking you need cash flow financing solutions to cover those deficits. It is at those times that your firm is most vulnerable - because employees, suppliers, and lenders, (what a group!) may in fact doubt your ability to return to positive cash flow.

Canadian business owners turn to chartered banks to cover that deficit, when they can. The bank is in a position, when you qualify, to provide you with a business line of credit that will allow your cash flow cycle to continually repeat itself, from negative, to positive, and all over again.

But what if the bank is an inaccessible option for cash flow finance solutions? In some cases we have seen business owners solve their working capital problem by simply accessing supplier credit in a more aggressive manner. It’s not always immediately obvious to business owners that slowing down payables increases your operating cash flow. Of course it's a delicate balance though.

Another issue in working capital and cash flow financing challenges can be the seasonality of your business. Many businesses have very uneven profit earnings; for example they might break even or sustain financial losses during some parts of the year, and thrive at others.

When business in fact seasonal, experiencing the ' bulge ' as we might call it your bank or other lenders have the option of staying the course with your firm, or canceling credit facilities altogether .

We have shown that cash flow challenges are a business reality, spanning all types of businesses and different industries. With proper management and solutions those challenges can be overcome. It always gets back to the issue of cash flow and profits being recognized as different. Bottom line, your profits are on paper only until they are banked.

In Canada business owners have access to a number of business finance solutions for working capital and cash flow. They include traditional banking, asset based lending, receivable finance, inventory finance, P.O. finance, and tax credit monetization.

Speak to a trusted, credible and experienced Canadian business financing advisor who will ensure your business hasn't lost faith in its ability to come up with growth and capital solutions for success.






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_flow_financing_problems_solutions.html

5 Things You ( Probably ) Didn’t Know About Canadian Business Receivable Finance . Cash Flow Financing Via Factoring Clarified !

Receivable Financing In Canada


Information on Business receivable finance in Canada . Cash flow financing via factoring and a/r financing – explained and clarified!



Clarity and quality of information surely count when Canadian business owners and financial mangers consider business finance alternatives. We've said in the past, and still feel it's true that no other form of finance in Canada is as misunderstood or potentially confusing as business receivable finance. So does this method of cash flow financing have to be confusing? We don't think so, so let’s recap 5 often asked client questions with a goal of clarity for you, the Canadian business owner.

Question 1 revolves around the amount of funds you can expect to obtain in Canada. Typical advance rates for most facilities revolve around the 90% mark if you are dealing with the right party. The balance, i.e. the remaining 10% of your receivables is a holdback that is remitted to you immediately after your client pays. Another key question is facility size, and the good news here is that your facility grows as your sales grow. In general there are no credit limits per se, unlike bank facilities, which clearly have a cap .

Question 2 revolves around the process, i.e. the length of time it takes to set up a facility. We generally advise that it takes approx 2 weeks to set up a proper facility - that is a general guideline. You will know, by the way, very early on in the process if you are approved. After that it's simply a question of documentation.

Question 3 is the proverbial hot point. Fees and costs. Various factors come into play here, the credit quality of your firm in general (it does not have to be as solid as you think), the size of your facility, the nature of your industry, etc. On balance a solid business receivable finance fee in Canada is 2-3% if you're billing and collecting on a 30 day term.

Question # 4 revolves around types of receivables that can be financed, The key point here is that only ' business’, i.e. B2B a/r can be financed in Canada, so those companies with a consumer a/r base cannot take advantage of cash flow financing .

Question # 5 revolves around the age of receivables that can be financed. As a pretty general rule only A/R that is under 90 days in age can be financed via this method of Canadian business financing. One can safely assume of course that if you haven’t collected your accounts by that time there is an element of uncollectibility or bad debt in your A/R portfolio.

There you have it. Confusion gone away? We hope so. When considering working capital finance via business receivable financing ensure you've got the right information at hand to make an informed decision. Speak to a trusted, credible and experienced Canadian business financing advisor for your ability to get on track with cash flow finance.



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_receivable_finance_cash_flow_financing.html