Avoiding Canadian Business Credit Nightmares. Banking And Bank Loans For Business In Canada

Ready For A Solid Banking Relationship ?


Information on how Canadian business can access credit , banking, and bank loans in Canada




When it comes to Canadian business credit and banking in Canada (loans, credit lines, etc) it's more than a bit unfortunate that many business owners and financial managers view the process and the challenge as somewhat of a nightmare or at the very least a negative process.

Let's examine how you can turnaround that process with a viewpoint towards success. And let's hope we can get rid of some of that negativity also.

Secret # 1 - Choose a banker, not a bank. We don't think there is one important thing we could share on our subject other than that statement. A good (hopefully great) banker will become a great source of financial and business assistance.

So you've made your pick?! Now what? It’s critical that over time you gain the confidence and respect of that person, whether it’s a he or she. This can be achieved in a number of ways. Banks in Canada are focused on ' cash ' and ' cash flow ', so just supplying your banker with reasonable cash flow projections goes a long way to instilling confidence of the bank in your business.

That ' cash plan ' is simply a solid estimate of incoming and outgoing cash needs, with hopefully the bank bridging the gap.

A huge issue in Canadian banking (it’s not huge for the banks, but it sure is huge for our clients) is the whole area of personal guarantees. While the majority, if not all of bank credit in Canada for privately owned corporations mandates a guarantee we would point out that we see numerous cases of flexibility when in fact none seemed apparent.

That flexibility comes in the form of limiting the personal guarantee, or in some cases securing outside assets in lieu of the guarantee. We have seen cases where the bank waived the entire need for a ' PG ' (personal guarantee)... in general this is the exception, not the norm.

A simple summary of the entire PG situation is that assets and your personal credit history and situation will drive the final decision here. As Canada goes through different economic cycles banks seem to be either pulling in the reins or making an all our effort to make personal and business credit available. So it’s important for you to judge where the banks are in the cycle!

One way in which you can maximize the benefits of a solid bank relationship is to continually explore the ability of your banker to introduce you to other professionals that might assist your business. These might include lawyers, accountants, and Canadian business financing advisors.

Those intro's are worth their weight in gold in many cases, as these external advisors have not doubt proved themselves many times before as they established their own relationship with the bank.

What are bankers in Canada looking for when they look to extend Canadian business credit? It's not rocket science - they look for management depth, a solid busines model, what financing you have in place via debt or equity , as well has how you market and price your services or product.

A final note on bank loans in Canada? Unlike the U.S. which has hundreds, even thousands of different banks and even more independent non bank finance firms Canada's banking system is smaller. Clients who are bankable often focus on ' rates ' - in our opinion the rates will vary no more than some basis points from bank to bank.

Your focus should be on the banker, and the structure, terms, and guarantees surrounding your bank loans or credit lines. That saving of a couple basis points will be non existent in your mind when you get locked into a structure or guarantee or ratio and covenant scenario that you can't get out of.

Can you avoid business credit nightmares in Canadian banking? We sure think so... consider talking to a trusted, credible and experienced Canadian business financing advisor on achieving some of the best business banking 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/canadian_business_credit_banking_bank_loans_canada.html

Lost ! Your Canadian Franchise Opportunities. Issues You Can’t Not Consider Re: Your Franchising Finance Loan

Considered These Other Issues In Canadian Franchise Financing?


Information on important aspects of a finance loan for Canadian franchise opportunities



Feeling like you may have missed out, or perhaps simply overwhelmed with the ability to a finance Canadian franchise opportunities. There are a lot of issues to consider when contemplating a franchising loan, some of which you may not have even considered or be aware of. Oh, and by the way, some of these pertain to those of you who are already franchisees and have even more unique issues to address.

Let's examine some key concepts in franchise financing. Although things have certainly gotten a lot better in the last year or so we are clearly not 100% out of the rough when it comes to the economy and lending perceptions for new and small businesses. Unless you're a master franchisee with the rights to a number of franchises then clearly you are essentially a ' Small Business '. So not withstanding the great strengths of a proven franchise business model you still face the same issues and challenges of an SME owner in Canada.

Although many current franchisees want to make some changes in their business, as well having access to the finance required it’s still difficult to achieve that flexibility.

The majority of franchises in Canada are in the ' B TO C ' (business to consumer) model. That is of course heavily dependent on the economy s a whole, and access to the financing you need. If you are a current franchisee you perhaps are in a position to simply tighten up on expenses to meet your overall working capital needs - especially if your business is suffering from a less than adequate location. In some cities in Canada demographics change, and that can drastically affect your revenues over time. Location is still critical to franchise success if you are in a business to consumer model that we spoke of.

Sometimes the solution to franchise success if you are a current franchisee is to ' upgrade ‘and revitalize your location. But what type of financing can in fact help you finance things such as leasehold improvements? The good news is that the same financing program that probably helped you acquire the business is also available for ongoing financing needs. We’re of course referring to the government business loan, aka the ' SBL '. Financing up to 350K can be accessed for things such as leaseholds, new equipment, architectural drawings, etc.

We would caution franchisees that they need to be able to sufficiently prove that any refinancing of the business must make sense in the terms of cash flow repayment. That can be accomplished by a simple cash flow plan with a focus to additional revenues achieved through your revitalization. Don't let lack of capital make you miss Canadian franchise opportunities for new and existing franchises. Ensure that you demonstrate though that you can handle the additional debt service.

There are a lot of issues to consider in financing a new or existing franchise .In some cases you might even be considering the purchase of an existing busines from another franchisee.

Speak to a trusted, credible and experienced Canadian business financing advisor for help with the issues surrounding a successful end to your franchising finance loan.





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/canadian_franchise_opportunities_finance_loan.html

Canadian Business Financing: Achieve the Impossible With ABL ? How The Asset Based Line Of Credit Facility Creates Financing

Canadian Business Financing: Achieve the Impossible With ABL ? How The Asset Based Line Of Credit Facility Creates Financing

Achieve the Impossible With ABL ? How The Asset Based Line Of Credit Facility Creates Financing

This Day In Canadian Business History : April 5, 1966 - Canada signs three-year deal to sell $550 million worth of wheat to China.



Our Comment : ‘ Fast Forward To 2012 – China deciding to just buy Canada via an all cash sale’ – Stan Prokop



Need Financing For Any One Of These 5 Situations?


Information on the abl asset based line of credit facility . Why this facility works for Canadian business in a wide variety of circumstances .




Why do we maintain ABL financing achieves the impossible? For us, it seems pretty simple. It's that just one type of Canadian business financing, the asset based line of credit facility, can successfully address, and answer ' YES ' to the following questions:

Is Your Firm viewed as high risk by other more traditional institutions such as Canadian chartered banks?

Do you wish to acquire a competitor or another firm?

Do you need interim financing while in the stages of a ' turnaround'?

Are you experiencing ' hyper growth ' without the necessary financing to handle that growth?

Are you considering a bankruptcy/ receivership or in one now?


Doesn't it seems incredible that one unique method of financing can address those 5 issues, or is it just us that's impressed? Hopefully not.

ABL finance has gradually grown in popularity in Canada; we're often surprised why it has not grown faster. The reality is that some of the largest companies in Canada, both public and private now utilize this type of financing. Even more interesting, and somewhat ironic is that Canadian banks have boutique divisions that are also offering this method of finance.

We have often felt though that in the case of the banks there aren't to many differences in some of the credit criteria, which is great for pricing and size of the facility, but less so for approval!

So how do asset based financings in fact address the 5 business concerns we profiled earlier. It's actually pretty simple as a concept. In essence it's a line of credit facility that bundles all your assets into one revolving line of credit. We can't over emphasize the word ' assets ' - that’s the strength of the financing. In the case of ABL its not about ratios, covenants, outside collateral, high emphasis on personal guarantees... its just about... you guessed it .. ‘Assets’!

As the levels of your financing expand you are in a position to borrow against these rising assets due to sales expansion, etc. Naturally it goes without saying that the margining of these assets is what your new found liquidity is all about. For a starter A/R and inventory is margined at typically 90% and 30-70% respectively. That liquidity is further enhanced by allowing you to borrow against equipment and real estate within that same facility.

In Canada facilities such as this typically start at 250k and go to tens of millions of dollars. And they do address all of the 5 situations we have mentioned.

Speak to a trusted, credible and experienced Canadian business financing advisor on how an ABL asset based line of credit facility just might be what you need ... 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_line_of_credit_facility.html

Therapy For Business Cash Flow Problems ? Working Capital Financing Solutions And Alternatives

THIS DAY IN CANADIAN BUSINESS HISTORY :
April 4, 1896 - News of the Yukon's Klondike gold strike reaches the outside world. Vancouver, BC

Our Comment : 'Thousands of stockbrokers descend on Canada with a viewpoint to providing valuable ' tips ' to clients '- STAN PROKOP





Looking Inside the Cash Flow Conundrum

Information on solutions and alternatives for business cash flow problems in Canada . Working capital financing when Canadian business needs it most .



Business Cash Flow Problems? Maybe some working capital therapy in order. Therapy - it's what they call a ' curative power ' , so let's examine some curative powers around one of the biggest challenges Canadian business financing, working capital and cash flow needs.

We're all familiar with the old phrase ' you need money to make money ‘; well scratch that, we have re-written that one for today and we'll offer up ' you need working capital to make more money '!

The unfortunate part of talking to many entrepreneur and business owners in many cases is that there seems to be a common belief that sales growth will take care of all your business problems ; the reality is that it will take care of things for awhile, but trust us, not for long.

Profits do fund growth for an interim period, but in the end you need to address some very basic issues. An example? Your valued vendors and suppliers want to be paid before you get paid from your own customers!

So what’s the solution? Most business owners and financial managers would offer up ' go to the bank ' or ' put in some more owner equity ‘. That's works of course, if that’s in fact possible - key word ' IF '!

What those sales have done is create a gap... for some clients we meet it’s a rather big chasm or canyon!

Naturally some firms need more working capital than others to address the business cash flow problems we are talking about. That’s because something known as the ' cash conversion cycle ' varies from industry to industry and probably even business to business within that industry.

The cash conversion cycle can be easily calculated by any business owner. The formula? Take your days sales outstanding, add your inventory on hand days, and subtract your payables. That number essentially gives you a very basic ' known ‘. It tells you how long it takes a dollar to travel through your company. And trust us, sometimes that ' travel ' seems to look like a slow meander!

As we said some firms require more cash flow than others - an example might be a large pharma firm who invests tons of money in advance of even bringing a product to market - assuming it’s approved by the government for use! On the other hand a large retailer doesnt sell on credit, they only take cash and credit cards, so their conversion cycle might be a lot less.

So, our take away today? The shorter you can control you cash conversion cycle, the better! And you can accelerate cash flow by bank lines of credit, receivable financing, and inventory financing, monetizing tax credits, or securitizing your receivables if you're a larger firm.

Speak to a trusted, credible and experienced Canadian business financing advisor to assist you with your business cash flow problems and working capital solutions to accelerate your cycle of cash.









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_problems_working_capital.html

Scientifically Proven ? An Asset Lease Whether Operating Or Capital Works For Financial Bridging of Canadian Business Financing

This Day in Canadian Business History - April 4 :

Canada agrees to acquire the Canadian section of the Alaska Highway, including telephone systems, buildings and other assets, for $108 million (1,221 miles at $88,000 a mile); 2,450-kilometre highway originally cost US$140 million to build, as a wartime supply route in case of Japanese invasion of North America.

Our thoughts ? ' What a Deal from a financial perspective! ' Ultimately of course there was a supply route invasion of Canada but it consisted mainly of LCD screens .... Stan Prokop



Conducting Lease Transactions in Canada – Bridging the Asset Gap



Information on asset lease financing in Canada . Capital and operating financial solutions provide the bridging you need for short term and long term fixed asset finance needs .



Scientifically proven? It's defined as a ' body of techniques’ for acquiring new knowledge. Unless we're missing something an asset lease is a trusted financial solution, bridging your operating capital needs to your long term financing solutions.

Whether it’s an operating lease versus a capital lease your company still benefits from the appropriate combination of use and to a certain degree, ownership.

So why does a lease finance solution allow you to reduce the consumption of capital. Simply speaking you can direct funds required to buy assets towards more important things, such as growing your business, expanding your products and services, etc.

When you choose between an operating lease ( using ) versus a capital lease ( owning ) it comes down to two basic criteria for final approval - the value and quality of the asset , as well as of course your firm's general credit worthiness.

The great news for Canadian business owners and financial managers is that leasing companies and solutions abound! They are provided by bank subsidiaries, independent commercial finance firms, and captive finance organizations of larger manufacturers. (In general you can’t beat vendor/captive financing for rates, terms and structures - simply because the finance arm is incented to approve and finance your asset based on the sales focus of the mfr itself).

Depending on what industry you are in you might well find that certain lease firms and solutions are more appropriate than others. Technology, computer, software, and telecom type assets lend themselves perfectly to be financed via firms with that special tech experience. More often than not you will, or in fact should, consider an operating lease for these types of assets.

What then are the key questions or issues that you should address when considering an asset lease, or utilizing this financing tool as a bridging solution... for example a sale leaseback ?

The key considerations are your expected term under which you believe you will use the asset. (3 and 5 year terms are most typical - however 2-7 year terms are available depending on asset type).

Capital or operating leases work best when they are part of an overall strategy. Your company will derive maximum benefits when you consider several issues around your asset or bridging needs - they include tax implications, how you will account for your lease, your future needs for the type of equipment you are acquiring, etc.

The Sale leaseback scenario is a great bridging strategy for financial solutions. It takes your current investment in assets and monetizes them, giving you critically needed capital.

Can leasing ever be a poor choice? Perhaps, but certainly not often. The weight of evidence, scientific or otherwise! suggests that this financing tool gives you maximum leverage in asset lease finance. If you're looking for more information and expert advice on lease concepts speak to a trusted, credible and experienced Canadian business financing advisor.







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_lease_operating_capital_financial_bridging.html

A Quick Proven Way To Accelerate Cash Flow Finance ? Use A Purchase Receivables Factoring Program

Cash Flow Financing Via A/R Finance Doesn’t Have To Be Ultra - Secret !



Information on cash flow finance and purchase receivables factoring in Canada . Benefits, Costs, and How To !


Waiting for anything good to happen is business isn't really our favorite thing to do. That's why cash flow finance via a purchase receivables strategy to finance your business eliminates waiting.

Waiting for what? Well the question simply becomes: ' Would you rather have cash in the bank now for your sales, or would you prefer to wait 30, 60, and oh wow... 90 days for the funds do your firm from your clients?”

The answer is pretty obvious of course, and that’s why factoring, aka the purchase of your receivables by an independent finance firm is one of the quickest and most solid ways to eliminate the cash flow growth and survival programs that come with growing your business. Those cash flow challenges come of course, from the simple fact that as you sell more your inventory and receivable portfolio grows

So why don’t hundreds of thousands of firms that are eligible for this method of financing utilize it? We don’t know for sure but we often think it boils down to either they haven’t heard about it, or they have but don't understand how it works.

How could Canadian business owners not consider using a financing method that eliminates the pressure of having cash on hand, making payroll, and paying your government taxes such as HST and employee remittances?

How then does cash flow finance via factoring work. It couldn’t be simpler. As you make sales you are able to borrow immediately, and by immediately we mean ' same day ' against those sales. The way the industry handles the mechanics around this is that your A/R is in effect ' purchased ' as you generate sales. And by the way, with the right type of facility you certainly are under no obligation to finance all your sales, only the amount you require. That’s a key flexibility option.

Our opinion is that the best purchase receivables program is in fact a confidential one, one that allows you to bill and collect your own A/R. The majority of the industry in North America does not offer this solution, but working with an experienced advisor allows you to in fact choose this method over the traditional one as long as you identify up front in discussions that the confidentiality aspect is important to yourself.

‘Can we learn more about the daily ' mechanics ' of this method of financing?' That's a typical client question, so here's the answer. As you generate sales you submit invoices for services that product that you have rendered or delivered. (Service receivables can be financed also!).

Typically you receive 90% of those funds the same day - the balance is held as a holdback or buffer. You receive the other 10% when you client pays, less a discount of approx 2% for financing costs if your terms are 30 days and your client pay in 30 days. Otherwise daily per diem charges run until your customers pay.

So why is this method of Canadian business financing fast and why is it effective at the same time.

The answers should seem obvious - you accelerate cash flow, your receivables are the asset you are borrowing against, so there is no debt incurred. At the same time as a business owner or financial manager you're doing what we think you do best - running and growing your busines, getting new larger orders, etc!

Speak to a trusted, credible and experienced Canadian business financing advisor on the method of receivable financing via cash flow finance factoring that works best for your firm.




Stan Prokop - founder of 7 Park Avenue Financial -

http://www.7parkavenuefinancial.com


Originating Canadian business financing , 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/cash_flow_finance_factoring_purchase_receivables.html