Buying A Business In Canada ? Types Of Financing For Your Purchase

Financing The Purchase Of A Business In Canada


Information on buying a business in Canada . Financing your purchase is available through various techniques and strategies




Buying a business in Canada. It's done for a lot of reasons. Financing that purchase requires knowledge of strategies that allow you to acquire opportunities such as a sale of a family business, seizing the opportunity to acquire a troubled competitor for synergistic reasons, or... heaven forbid... simply growing your business from a size and profit viewpoint.

We'll leave it up to you to identify the business opportunity, however we think it’s our job to ensure you've got some solid access to financing strategies that will work for your success in a business acquisition.

One often overlooked strategy that you should focus on right from the beginning, if only because it minimizes your financing requirement is the vendor take back, often also termed ' owner financing '. Simply speaking, it’s a powerful strategy. And when financing a business purchase becomes a challenge the vendor take back/owner finance strategy makes access to the other types of financing you require... easier!

Typically the Canadian business owner and financial manager thinks of ' the bank ' when they look to acquire a business. That's just logical. However if you're not familiar with the way a bank looks at a business acquisition you're going to hit a roadblock pretty quickly.

Very early on in the process you absolutely have to identify whether you and the selling firm are going to focus on an asset sale versus a stock sale . For small and medium sized businesses in Canada the concept of financing a share sale is somewhat impossible, certainly if financing is required and is a key component of the deal.

If you're a large corporation or public company that’s another kettle of fish, but we're simply saying for a small to medium sized transaction asset sale financing is really the way to go. As an acquirer you'll find that sellers of a business in Canada that wish to focus on a stock sale are really more focused on tax minimization issues, and that isn't going to help you complete the deal.

Once you have focused on the asset sale it becomes a case of determining the value of those assets. This is typically done by appraisal and financial analysis techniques.

Goodwill is the excess dollar amount you're paying on top of the assets. Goodwill is typically difficult to finance, which is why our owner financing/vendor take back strategy is sometimes a good place to start. The sellers financing, often referred to as ' holding the note ‘can allow you to complete a purchase satisfactory to all parties.

Both banks and non bank commercial finance lenders view the VTB (vendor take back) very positively. Since the seller of the business has a vested interest in making the purchase also successful you often can get very favorable, in fact below market financing rates from the owner or owners of the company being acquired.

Owner financing can also be a part of the BIL/CSBF strategy, which is the government loan program used by many SME owners to acquire a business.

A typical structure for financing a purchase when you’re buying a business in Canada is the down payment, debt financing, and the vendor take back/owner financing. When all three align properly you have the makings of a successful result in buying a business in Canada. Speak to a trusted, credible and experienced Canadian business financing advisor for assistance in structuring the best deal and financing for your business purchase.

7 Park Avenue Financial - Canadian Business Acquisition Financing


Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

Franchise Financing In Canada . Boring Or What? Franchisee Loan Info In Buying Franchises

Canadian Franchise Financing – Not Exciting .. But ….


Information on franchise financing in Canada. Implications of buying a franchise and the franchisee loan process.


Franchise financing in Canada. Boring... right? Well it might not be if in fact you're a franchisee looking for a loan when buying your franchise.

We're reminded at the same time of Sisyphus, of Greek mythology. He had to roll that boulder up the hill, requiring immense strength and endurance, only to be destined to see the rock fall down and to have to repeat the action in perpetuity. Anyway ... with the right info and contacts you certainly don't have to be a Sisyphus when it comes to franchise finance!

7 Park Avenue Financial - EXPERT FRANCHISE FINANCING



It makes sense that if the franchise that you have chose is in fact part of a successful chain that it will require a probable substantial investment, both in terms of equity as well as the franchisee loan. All businesses are founded with that combo of debt and owner equity.

The positive side of the story is that franchise financing is in fact available and generally viewed as a positive in nature that financing is in fact available. And a well known or reputable franchisor is in fact just the icing on the cake.

Typically the down payment required to open and fund a franchise tends to be anywhere from 10- 50% depending on the structure of the financing you require. While some permanent equity is a must it is to the benefit of yourself and the lender that you demonstrate some working capital and what we can call ' financial cushion ' in case things are off to a slow start. We're reminded of a saying by an old boss we had in the 80’s - he said he never met a forecast he didn’t like!

So what in fact is the franchise loan offering in Canada. Well it’s a combination of bank financing, specialized finance via a commercial finance firm, and then what we call a cobbled together approach of equipment, line of credit, etc.

Many franchisees, once established are considering cash advance financing, which in effect monetizes future sales which are then repaid over time as you generate new sales. They are done on a revolving and or term basis and typically have higher financing rates attached to them.

Most franchisees choose the BIL/CSBF program which is perfectly structured for franchise financing less than and up to 350,000$ with attractive borrowing and criteria features attached to it.

The essentials of any franchise financing requires a solid, preferably ' crisp ' business plan outlining your background, a financial forecast, and info on the franchisor and your chosen industry, whether it is a service or a product.

Typical debt to equity ratios apply , and you want to ensure that amount you borrow is repayable out of operating cash flow. Optimally you want to cover your loan payments, build equity, and of course draw a reasonable salary that you and your family can live on. The appeal to the franchisee is of course the proven business model offered by your franchisor that presents a reasonable, hopefully proven method of generating profits, cash and equity.

So, boring. Maybe, but not if you're on a search to properly finance a major business/career decision in your life. Speak to a trusted, credible and experienced Canadian business financing advisor on how you can access franchise financing 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/franchise_financing_franchisee_loan_buying.html

Can ABL Financing Be Your Business Finance Peace Of Mind ? Getting Comfortable With A Revolving Credit Facility

Is An Asset Based Line Of Credit For Your Firm . It May, and May Not Be!

Information on ABL Financing in Canada . Why an asset based revolving credit facility might be your business savior .


ABL financing, basically a business revolving credit facility, has the ability to provide a significant amount of ' peace of mind ' when it comes to the worries and challenges that confront business owners and financial managers.

And that doesnt matter whether you are a start up or a major Canadian corporation. And everything in between. Because that's who is using asset based lines of credit these days.

But is ABL finance right for your firm? Let’s discuss, and recap. Companies who consider an ABL facility find themselves constantly challenged by understanding what is happening to their cash flow.

These days you may, or may not have a current secured lender in place to handle those financing challenges we're talking about. One aspect of deciding whether to go the Asset based revolver route is often some sort of seasonality - we can call them ' bulges ' in your business.

That seasonality, those ' bulges ' drastically affects cash flow and income, which can fluctuate wildly in any company. The asset based line of credit allows you to generate cash flow during those bulge periods, while at the same time allowing you to keep your operating and debt service obligations up to date.

That's of course critical when you are wrestling with fluctuating working capital situations.

Timing of cash flows in business is paramount. The three things that almost always affect your timing in working capital and cash flow in business are receivables, inventory, and , on the other side of the balance sheet, payables.

Asset based lending via an ABL financing business line of credit often can provide the solutions when the door is closed at Canadian chartered banks for firms that don't meet bank criteria. It's a case of a business having a high potential for viability and growth, but has less than stellar income statements and ratios typically required by our banks in Canada.

So how does a company get the door open to financing when they have been locked out by more traditional solutions? The answer is an ABL revolving credit facility, focusing on assets that when properly monetized, can enhance the cash flow situation.

ABL therefore becomes a ' smoothing out' solution because you draw down on cash flow, daily, as needed, based on your assets and sales/receivables. It also can be used; by the way to assist in the financing of new fixed assets, or even buy a competitor .It's those assets that help the strategy work.

ABL financing works because it applies higher borrowing formulas to your business assets. Companies that are in service or non intensive capital industries will always be a bit challenged in an ABL revolving credit facility simply because the main asset monetized are only receivables.

Other challenges in getting a proper asset line of credit in place might be the type of inventory you carry, or any specialization attributed to your assets or industry.

So, right for every one. Perhaps not. But if you have A/R, inventory, receivables, purchase orders and are looking for a new way to monetize those assets ABL financing might be the business revolving credit facility for your firm. And peace of mind? As the commercial says ' Priceless'.

7 PARK AVENUE FINANCIAL IS AN EXPERT IN ABL FINANCING





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

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

Golden Rules For Financing A Business In Canada . Working Capital and Debt Solutions .. That Make Sense !

Debt and Cash Flow Solutions And Tips For Canadian Business

Information on financing a business in Canada . What working capital and debt solutions make sense for your firm, and why .




Financing a business in Canada. A challenge? Let's just say that's an understatement when it comes to working capital, debt, and ongoing management and recognition of finance problems and opportunities.

Are there some ' Golden Rules' we could follow. We think so.

One of the golden rules of business finance is to ensure that you properly match short term debt and long term debt appropriately. Each of these two has its own benefits and potential disadvantages. Is one better than the other? Not really, it’s just that it’s a case of making adjustments and staying ' in tune ' with what needs are appropriate or required at the right time.

It certainly hasn’t escaped us that not only is it difficult when it comes to financing a business in Canada to manage internally, you of course have to stay in tune with what’s happening in the economy, your industry, and dare we say, politics! Talk about a full time job.

A lot of your financing will probably come from external financial solutions. They might include bank debt, working capital term loans, receivable finance, inventory finance, equipment leasing, and monetization of tax credits. However, you also generate cash internally, and you need to know how to measure that.

When you assess working capital or debt needs you need to be in a position to focus on cost, risk, and what that financing does to your balance sheet? All of those must be taken into consideration.

Also consider your current capital and debt structure and how your balance sheet will look after financing is completed. As an example, something to think about is that working capital and cash flow can be generated through monetization of assets - this doesnt really bring debt to the balance sheet, so you've achieved your goal without increasing debt.

On occasion it’s important to discuss any taxation impact on your financials with your accountant, as there are both positive and negative aspects to debt and tax.

If your firm is mature and operating efficiently you’re in a position to access all sorts of traditional financing. The other side of that is alternative finance, which works just as well but might be more costly on occasion - not always, but sometimes.

It's hard enough to access financing but choosing the right partner is a struggle in itself sometimes, ensuring that the funding source will be with you in tight markets and good times. Apparently those two fluctuate over time. The 2008 worldwide debacle caused many finance firms to disappear or implode, causing havoc among thousands of businesses in Canada, whether you were a start up or large corporation!

One solid GOLDEN RULE of business finance is to be proactive when it comes to access debt solutions and working capital. You might even have to make the tough decision around diluting equity when there it too much debt on your balance sheet. That’s a costly one.

A great GOLDEN RULE is to have a solid sense or understanding of how outside forces can affect your company's financial viability. If market conditions are continually volatile you clearly need to focus on longer term stable financial solutions.

Constantly stay on top of your cash flow planning , and if you want to understand what solutions are available for financing a business in Canada speak to a trusted, credible and experienced Canadian business financing advisor ,

7 PARK AVENUE FINANCIAL IS AN EXPERT IN CANADIAN BUSINESS FINANCING





Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com

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

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

Here’s Your 7 Objections To Equipment Lease Financing And Why You Just Might Be Wrong About Leasing Companies In Canada !

Canadian Business Financing With The Intelligent Use of Experience

Canadian Equipment Leasing – You’ve Waited Long Enough


Information on common objections and misunderstanding regarding equipment lease financing and leasing companies in Canada .


Equipment lease financing and leasing companies in Canada. For almost too long that we remember we've heard objections from Canadian business owners and financial managers around whey they don't use or recognize the benefits of lease finance.

One of our old mentors in this segment of Canadian finance actually tabled these objections in a work he published. We thought we would dissect those objections with an emphasis on the Canadian leasing business, as his comments originally were general in nature; by we're Canadian, eh?

Objection # 1- Cash is king, and you like to pay cash and have pride in ownership. Well as our mentor noted, lease payments are made in cash also, it’s just that we've always felt that a smaller outlay of cash is better than a larger one in business. And if you've got ' pride of ownership ' in a depreciating asset, well .. that's your right!


Objection # 2- Lease pricing. The reality is that lease pricing in Canada is credit driven and that your rates are commensurate with your overall credit quality. In fact if you have bank quality financials you can actually receive lower rates than a bank term loan, certainly for larger transactions of good credit quality. We've been on the record that the overall structure and flexibility offered by leasing companies often far exceeds any rate differential in lease finance.

Objection # 3- You prefer loans. Well that may well be, but you are of course adding debt to the balance sheet under that scenario. Oh and by the way, when you choose a capital lease full payout scenario you are very close if not at the loan scenario. The true finance lease is essentially a loan for the full amount of the asset.

Objection # 4- You have had what our mentor called a ' bad experience '. Our point on this one is that you also may have a bad experience with a lawyer, accountant, or business or personal financial advisor. The reality is that you need to focus on partnering with a firm or individual that you trust when it comes to equipment lease financing in Canada. That goes for choosing a supplier, banker, etc. It's only common sense.

Objection # 5- Hell or high water. What? A Hell or high water clause in commercial leasing indicates that you are obligated to pay the full amount of all remaining payments in your transaction .What that, you want to change that clause. The reality is that with the proper negotiation a good lessor or leasing advisor has the ability to include in your transaction features that make sense to you when it comes to cancellation and pre-payment.

Objection # 6 - the proverbial down payment. You don't like it. Down payments with good credit quality are minimal or non existent when it comes to equipment lease financing as well as choosing the proper lessor.

Objection # 7 - The lockdown . Many clients tell us that are unable to extricate themselves from their current lease transaction in order to move on to a more appropriate one. A variety of tactics can be utilized to refinance and move on .They include at the very lease refinancing the existing lease combined with the new one.

Most lessees, your firm probably included feel their company and industry is unique. That may well be true, but ensure you speak to a trusted, credible and experienced Canadian business financing advisor. You may well find those 7 objections to leasing companies and equipment lease financing in Canada are somewhat... unfounded!

7 PARK AVENUE FINANCIAL IS AN EXPERT IN CANADIAN EQUIPMENT LEASING



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_lease_financing_leasing_companies.html

A Receivable Finance Working Capital Loan Facility Financing . Explained . Finally! 6 Things You Need To Know About Invoice Finance

What You Must Know About Factoring In Canada


Information on a receivable financing facility in Canada . Why does this type of invoice working capital loan work best for cash flow challenged firms .



Receivable finance in Canada can be a valuable strategy for Canadian firms in search of alternate finance methods... that work.

There are 6 things you need to know about this type of working capital loan (it’s not a loan per se), so let’s examine what you need to know about invoice finance in Canada.

For our first point we can simply that that we are sure there are thousands of Canadian firms who probably haven’t even heard of this method of financing their business. When that is the case you can clearly say that lack of awareness leads to a general misunderstanding on the benefits of A/R finance, how it works, and how it stands up against other forms of business line of credit financing.

Secondly, and we're the first to admit it, that lack of awareness sometimes seems to tarnish the image of invoice financing. 'How we could have not heard of this before, my bank never told me about it '... that’s a constant comment we get all the time. Coupled with that fact is a general image problem around receivable finance, in that there is a perception, sometimes, that your firm has to be in difficulty to use this finance strategy. There is nothing more incorrect than that, and the proof we offer up is that some of the largest companies in the world utilize this strategy as part of a sophisticated method to finance their corporations. Enough said.

Cost also factors into one of our key things you need to know. Because A/R financing isn’t a loan or term debt of any nature it’s priced a bit differently than the Canadian business owner and financial manager might think, as they associate an ' interest rate ' with anything to do with financing. In fact the way A/R finance is structured it is in fact an ongoing sale, at your option, of your sales invoices as you generate them. That sale is structured as a discount purchase by your financing firm partner and in Canada typically is in the 2% per month range, sometimes less, sometimes more. So on a 10,000 $ invoice as an example you pay 200$ if your terms are thirty days and the account is collected within terms.

The bottom line is that A/R finance pricing is in fact a huge stumbling block to many clients, but only when they don't understand it.

Our fourth point is that if your sales are in a downward spiral this method of financing doesnt necessarily works, because in an invoice working capital financing strategy such as this your only liquidity is in fact your sales. If they’re growing, great, if not your flexibility to generate cash flow is diminished.

Point 5. Not every business sector in Canada can utilize our strategy. If you're in a Business to Consumer model retail/consumer receivables can't really be financed. And similar to business banking credit underwriters do attach a certain amount of risk to different industries which fall in an out of favor, or are constantly out of favor!

Finally, complexity! That's our 6th point today and we think its easiest one to fix. Yes, if you haven’t heard of the strategy around receivable finance then it might seem complex. Picking a partner is even worse perhaps , What firm is best for you as the lay of the land is littered with U.S. and U.K. firms, small Canadian firms, larger corporations domiciled in Canada. Some or limited by size of financing you require, or their geographical location.

Also, who is going to give you the straight goods on which method of invoice receivable finance works best (We favor confidential A/R finance), how pricing is determined, and how the facility works on a day to day basis.

The solution? Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in crafting the facility that meets your working capital financing needs.

7 PARK AVENUE FINANCIAL IS AN
EXPERT IN RECEIVABLE FINANCE 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/receivable_finance_working_capital_loan_invoice.html

Making Moving Pictures ? Tree Barking Wrong Up? Talkies? Cartoons? Canadian Film Tax Credits Do The Job! Let The Movie And Video Production Tax Credit Finance Your Project

Let The Production Tax Credit In Canada Finance A Significant Majority Of Your Budget

Information on Canadian film tax credits. How the production tax credit for video, movie , and animation projects finances a significant portion of any budget


Canadian film tax credits for film, video, TV, and animation. Can the Production Tax Credit solve the mistaken emphasis that producers and project owners sometimes find themselves in as they try to put together the ' money machine' required to finance their project .

Financing television, movies and animation / transmedia projects has certainly changed from the days of our aforementioned ' talkies' and ' cartoons'... that's for sure.

We're pretty sure that the majority of producers and owners of projects worldwide by now have heard that that Canadian film tax credit system seems by far one of the most sought after methods of making a film in the world. Canada's stable economy, sound financial system, as well as its diverse geography make it a solid choice to film or produce your project.

And let's also not forget Canada's diverse geography which lends itself to numerous genres of entertainment. Specifically in the world of animation and transmedia Canada's developers are again ' sought ' by producers all over the world. Bottom line, Hollywood and Vine often quickly becomes Yonge and Dundas for those familiar with Toronto Ontario's major downtown intersection.

So what is the Canadian film production tax credit? We suppose we can't disagree with those that call it a ' government subsidy ' - but for anything form of finance that might cover 30-50% of your entire budget we're not going to quibble over semantics. ‘Show me the Money ' and ' Go Where the money is ‘clearly has project owners flocking to Canada.

Any form of business financing is difficult. Film and animation finance certainly has it's challenges , so if there is a vehicle that finances , on a non payable grant basis a very significant part of your project when it comes to the ' below the line ' portion of your budget.

And our key point today is that tax credit can be financed, or sold, as long as you have a clean chain of title. The technical term for the non payable tax credit is the ' FILM PRODUCTION SERVICES TAX CREDIT '. Although some of Canada’s ten provinces change the formula a bit regarding percentage of allowable credit the bottom line still is that the tax credit is hefty in anyone’s view.

We are often asked how the tax credit is calculated. It's essentially a percentage (as we referred to above) and point system based on the amount of Canadian talent and ' spend' on your project. That amount is best, in fact only determinable by a good entertainment tax account who applies on your behalf for your certification. That’s why over the last ten years well over 2000 projects have been done in Canada under the genres of film, TV, animation, and the new kid on the block, ' Transmedia '.

One Hollywood entertainment critic maintained that the even broader appeal of the Canadian film tax credits was in fact Canada's ' depressed loonie ‘, i.e. the colloquial term for the Canadian dollar . While the dollar was very weak against the U.S. dollar for a long time it now has essentially parity with the U.S. dollar, so that certain eliminates that logic for the present time.

The financing of your production tax credits is a simple process if you've got a solid team in place when it comes to being able to demonstrate you have covered off the additional debt and equity required by any project . Film tax credits can be cash flowed at the end of your project, or during, allowing for solid working capital and cash flow enhancement.

Speak to a trusted, credible, and experienced Canadian business financing advisor who can assist you in the preparation and financing of your financeable Canadian film tax credits. You'll find it reduces a lot of stress and won't have you ' tree barking wrong up ' when it comes to putting your project together from a finance perspective.

Call 7 Park Avenue Financial for Film Tax Credit Financing





Stan Prokop - founder of 7 Park Avenue Financial –

http://www.7parkavenuefinancial.com


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


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