How’s Your Business Financing ‘’Lease or Buy ‘Expertise? Assessing Your Lease Financing Options

Analyzing Business Asset Acquisition Alternatives


OVERVIEW – Information on the lease or buy decision that owners face when they employ a lease finance option in their overall business financing strategy



Did you realize that when it comes to Canadian business financing the 'lease or buy ' decision is actually an ' investment ' decision? Let's look at some key aspects of leasing finance that will help you analyze the alternative you might not know you have!

While various business assets can be leased, i.e. land, office, etc our focus today is on equipment and assets. The key advantage of leasing these assets is that it allows you to free up scarce capital that you would otherwise spend in other aspects of your company... i.e. daily operations!

The challenge though, for the Canadian business owner and financial manager is knowing how long you will hold the asset, and if it will have any value at the end of your usage and lease term. And because it's a lease, and not a purchase you can’t make unilateral decisions to sell the asset or make a dramatic change to it. Your lessor of course has a buy in into that decision, and the reality is they borrowed the money also and have locked in a certain yield they hope to achieve on all your payments.

We love talking to clients about the ' lease vs. buy' decision as some are keenly aware of the key drivers in that decision, and others... are not!

So what are some of those key drivers? They include the actual cost of the asset, taxes, accounting treatments re book value, as well as making an intelligent decision around what the leasing company calls the ' useful economic life ' of the asset.

Cash flow is critical in the business owner’s final decision around the asset acquisition, but at the same time you want to ensure that you also consider the profit generating aspect of the asset.

Many business owners don't fully understand their ' cost of capital ' , and other factors to consider are areas such as debt vs. equity , given that debt is pretty well always cheaper than reducing ownership control via equity dilution . And if your company has a reasonable amount of equity and a clean balance sheet you can achieve very attractive lease costs in today’s business financing environment.

Not all the lease / buy decisions you are faced with have to do with ‘the numbers ‘. A good example – purchasing or leasing new technologies for your employees give your company both a solid reputation and are somewhat of a morale booster. In certain cases because of government legislation you may even be forced to lease or purchase assets you might not necessarily have wanted to... or needed. That’s our governments for you... here to help ..!?!
Clearly good it’s always good to focus more so on revenue producing assets, and in particular ones that produce sales and profits. On occasion though the business owner finds himself or herself faced with the proverbial ‘guesstimate ‘when it comes to business asset acquisition.

So can we summarize some of the critical factors in the ‘leasing or purchase ‘decision? They might include:

Revenue and cost issues

Tax/accounting/depreciation/useful life issues

Budget constraints

Intangible issues re customer and employee perceptions

If you’re not totally comfortable with acquiring assets under a lease / loan or purchase strategy seek out and speak to a trusted, credible and experienced Canadian business financing advisor today.

7 PARK AVENUE FINANCIAL
CANADIAN LEASE FINANCE EXPERTISE



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_financing_lease_or_buy_leasing_finance.html

Let’s Go ‘ Person To Person ‘ On Your Cash Flow Management Via Receivables And Inventories

Quality Cash Flow Solutions, And How To Get Them!

OVERVIEW – Information on cash flow management via receivables financing . Inventories also play a key role in working capital needs



Let's go ' one on one ‘ on a critical subject to Canadian business financing success, and that’s' cash flow management '. Typically that involves key current assets such as inventories and receivables, but things like debt load and your firm’s success in generating sales are also key factors.

We meet many clients who simply either directly, or indirectly admit that there current processes just aren't working! They want to know how they can access financing solutions that would make their company more competitive, successful, and effective.


Your ability to access the right type of financing depends on how credible your business is when it comes to having proper financials and reporting in place. So we can make the case that you not only have business assets, but your firm’s credibility is also key to financing and operational success.

So how do you in fact attract the financing that you need from lenders, perhaps other shareholder or investors, etc. That's where performance counts and when it comes to managing receivables and inventories you're going to get ' maximum credibility ' when it comes to loan and financing approvals.

Do lenders actually know how good or bad shape your ' current assets ' are in? (Current assets = A/R, inventory, prepaid and corresponding current liability - payables). They sure do!

There is a great story around a famous Wall Street speculator called Bernard Smith... he simply toured the back of companies - if the smoke stacks weren’t busy and inventories were piling up he sold the company short on the stock market and reportedly made millions .

Things are a lot different today, but it certainly proves our point that a lender and investor has the tools , probably even more so today, to monitor your performance in cash flow management . Smith was an investor, not a lender, but both those two share the same position on the right hand side of your balance sheet - either having a claim on your assets or your ownership!


If you have the ability to show that you understand the relationship between inventories, receivables and sales experts in the field of finance will tell you that you are very ahead of the game. And that’s a good thing.

Let's take a look at A/R as an example. Most business owners (hopefully) know that they can track their A/R performance by a simple calculation called day’s sales outstanding... But you can further enhance your management of A/R, (and inventory) by also tracking the relationship between sales and A/R. Just carrying those extra receivables has a huge cost to your company.

Our bottom line, if you ignore these key relationships your company clearly runs the risk of being accused of poor cash flow management. Additionally you will have difficulty in accessing cash flow financing solutions such as:

Bank credit lines

A/R and Inventory Finance

Asset based lines of Credit

Receivable Financing


Etc!

So, that’s some ' person to person ' advice on how to not have our previously mentioned Mr. Smith not make any judgments on your firm.

Speak to a trusted, credible and experienced Canadian business financing advisor on cash flow management solutions in Canada.

7 PARK AVENUE FINANCIAL
CANADIAN CASH FLOW FINANCING SOLUTIONS



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/cash_flow_management_receivables_inventories.html

Which School Do You Attend When It Comes To Leasing Finance ? Old School Or New School ? Equipment Lease Rates And Approvals In Canada

It’s Not Too Late To Become New School In Canadian Asset Financing


OVERVIEW – Information on leasing finance and equipment lease rates and approvals in the Canadian asset financing industry .




Are you 'old school' or 'new school' when it comes to leasing finance in Canada. We've always thought there is nothing wrong when it comes to being ' old school ' sometimes when it pertains to business. (In hindsight we would have been a lot smarter in the Dot Com era!

However, when it comes to maximizing the benefits and business financing availability for equipment lease rates and solutions we are categorically recommending a ' new school ' attitude.


Trends now show that leasing assets in Canada often approaches 80% of all asset financing in Canada. So why is that the best choice? And are you too late to get into the game? We don't think so - so let’s try and prove to you how you can adopt a more positive asset acquisition strategy when it comes to acquiring your business assets. And by the way, those assets cover everything under the sun these days; including software, computers, rolling stock for your fleet, production equipment... you name it.

The key to being successful in leasing an asset in Canada your ability to have a solid understanding of the lay of the land. What does that do? It allows you to leapfrog barriers, and that’s a good thing.

And when it comes to understanding that ' lay of the land ' you really have only two options - the first being to become an expert yourself, and the other is to rely on expert guidance from an experienced business advisor - and more often than not that advice is ... FREE!

The actual ' boring ' part of lease financing in Canada might in fact be the documentation that comes with your transaction. And some lessors do a great job of keeping this area of the industry boring, and complex... stuffed with all sorts of ' legalese '. Thats why its often critical to take a bit more time on the ' terms ' conditions of any transaction, no just those equipment lease rates which often seem so all important to clients.

Just picking correctly one of the two leas options types that are available to your firm can make you quite ' new school '. And that decision is often not as hard as you think - your choice is simply a ' lease to own' strategy, or a 'lease to use ' strategy. Respectively they are called capital leases and operating leases. So when it comes to the numbers those two lease types can dramatically change monthly payment, lease obligations at end of term, tax and balance sheet treatment, etc.

When you understand your options in lease finance in Canada you clearly have the ability to become ' new school '. When you understand the many advantages of asset financing this solution becomes the de facto alternative for acquiring assets for your company.

Speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in your departure from ' old school '!

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 10 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/leasing_finance_equipment_lease_rates.html

The Fix On Business Cash Flow ! Financing And Managing Your Working Capital Problem Via Pigs And Cows!

How To Kill Or Cure 2 Pigs . Turn Your Company Into A Cash Cow, Not A Cash Pig



OVERVIEW – Information on business cash flow in Canada . How financing and managing currents assets affects your working capital position.



Business cash flow in Canada. What in the world would that have to do with pigs, cows, and... Heaven forbid... killing pigs?

Basically, it comes down to this, and all of a sudden our animal analogies will make a lot more sense. And what do we mean by that... just that your current assets in your business, ie receivables, inventory, prepaids, etc are cash pigs. They require and use cash, and if you don't manage them properly bad things happen.

But the good news - when you do manage them properly your company embraces that other barn yard friend, the ' cash cow '! ( We're not re opening the beef vs. pork debate, but todays recommendation is definitely beef via the cash cow !)

The Canadian business owner and manager can easily be forgiven sometimes when it comes to concepts such as growing business assets. That's a good thing, right. Well, sometimes but definitely not always because the constant build up of current assets (again, your A/R, inventory) can be disastrous for your company if not addressed by two actions you can take - managing them, and financing them.

While we're all for working with clients on financing working capital and providing solutions that match their needs its the business owner/manager that can also make a huge dent in their cash flow plan by simply reducing and managing receivables and inventory .

Naturally its human nature for the business owner/manager to feel that if they overly pressure their client base for payment that they might be in a position to lose their customer. Don't forget though that large corporations invest huge amounts of capital in people and systems when it comes to enforcing their payment terms. By the way, that’s one of the ways that they became a large company - and we shouldn't be surprised that the metrics of Days sales outstanding and inventory turns are often keenly related to the compensation of very senior management, up to and including the president. So those big guys just might be on to something!

The same general concept applies to inventory also, and if your business has an inventory component on the balance sheet (services businesses of course don’t) it might already be taking months for inventory to work your way through your system and finally become: ' CASH FLOW '!

While we have focused on the left side of the balance sheet the corresponding current liability on the other side is of course payables, and if you properly manage payables that’s also a great cash flow generator . Again don't our large companies do that great also? Their modus operendi ... pay everyone slowly... because... hey... they're big and they can!

There is a great analogy around managing and financing current assets, and it revolves around running your company like a plane pilot ,

with yourself as the owner of financial manager always watching the controls. And when you don’t... there's a crash around the corner, and the cash flow pigs have in effect won the battle.

Working capital solutions to enhance business cash flow are abundant. it's all about which one is for your firm. They include:

Receivable financing
Inventory financing
Asset based lending
Business bank lines
Supply chain /PO Financing
Tax credit monetization

Speak to a trusted, credible and experienced Canadian business financing advising on barnyard management - turning your company into a cash flow cow

and wrestling down those cash flow pigs!


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_working_capital.html

SBL Small Business Loans In Canada . 5 Reasons You Don’t Qualify! The Government Small Business Loan Program Info You Need Today!

You Just Might Not Have Realized You Qualify for This Great Business Financing

OVERVIEW – Information on SBL Small business loans in Canada . Qualifications for this government loan program might not be what you thought!



Let's face it... and be honest here. You could probably never qualify for SBL small business loans in Canada. We're referring of course to the government loan program that provides over 8000 businesses annually with financing for their needs.

And we know why you would never qualify - Here are those 5 reasons:

1. Your business has over 5 Million dollars in sales or estimated sales

2. You could never put together a business plan or cash flow

3. it’s impossible for you to come up with the 10% equity down payment required in this loan program

4. You haven’t paid your taxes to CRA - Canada Revenue Agency in years coupled with your disastrous personal credit history

5. You have no need for any financing that would cover equipment, leaseholds, real estate, computers, software, etc


What? Are you serious? You're saying that you actually don't view all those issues as obstacles? Then guess what? You're a candidate for one of Canada's least understood (in our opinion) and most valuable financing mechanisms in the Small to Medium Enterprise sector in Canada!

Industry Canada put this program together, in conjunction with authorized Canadian lenders to help businesses just like yours to get assistance for Canadian business financing needs via the government loan guarantee. (A very large part of the loan is guaranteed to your bank or authorized lender by the government of Canada)

As we said, you don't have to work with or communicate directly to the government for this loan, you simply work through an authorized lender or Canadian business financing advisor. And talk about an uncomplicated process, you simply have to have a clear understanding of your business finance needs, and that is typically communicated through a business plan or executive summary, and a cash flow projection . Hopefully that’s not rocket science

to you, and if it is, don't despair, help is available from a variety of sources.

SBL loans in Canada are also called ' BIL ' loans, which stands for Business Improvement. And that’s a solid description, because funds are used for modernizing your business through assets and leaseholds. Those can be a variety of things:

Machinery
Rolling stock
Furniture /Leaseholds

Etc!

What you do need to know though is the program can’t be used for financing working capital . And trust us; it’s not a cash loan either

So if there's a bottom line today , it hopefully should be pretty simple - understand the basic criteria and attributes of the program, and if it makes sense for your firm access this financing that comes with excellent rates, terms , structures, and oh by the way , did we mentioned a limited personal guarantee .

Speak to a trusted, credible and experienced Canadian business financing advisor today who will prove to you that you just may in fact be an EXCELLENT candidate for the SBL Small Business Loan program in Canada.

7 PARK AVENUE FINANCIAL
CANADIAN SMALL BUSINESS LOAN FINANCING EXPERTISE


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_small_business_loans_government_program.html

Financing a Franchise. Here’s 4 Things To Worry (Or Panic !) About When Looking For Your Franchise Loan . Business Loans Are Critical To Success

Un- Worry Your Way To Canadian Franchise Success

OVERVIEW – Information on financing a franchise in Canada. Getting the right franchising loan or loans is critical to your success.


Financing a Franchise in Canada. We're all for ' un worrying ‘,

and not panicking, but the reality is that there are some key issues, financial, and otherwise when it comes to success in this entrepreneurial segment of the Canadian economy . And yes, the right franchising loan, or combination of loans

Although we’re focusing on franchising finance, there are of course other issues to get ' un worried ' about. They might include your overall personal suitability to be a franchisee in your franchisors system.

You also want to be able to have a strong comfort level that you have aligned yourself with the right franchisor. We're proudly Canadian of course, but we can't forget that many very solid franchise opportunities come out of the U.S. market based on their organization in Canada. In some cases you might be dealing with the Master franchisee of a U.S. organization, someone who has simply purchased the rights to the Canadian territory. Lucky them!

Another key aspect, our third in fact is the structure of the franchise when it comes to franchise fees and royalties. The reality also is that this issue is a key component of financing a franchise. Let's explain.

Although disappointing to many Canadian prospective franchisees typically the actual franchise fee is not financeable unless you are dealing with a very specialized franchise loan firm. This is typically shown as ' Goodwill ' on your balance sheet, reflecting the value of your franchise relationship from a financial perspective.


So make sure to carefully assess your ability to include that part of your business commitment in your total cash flow and cost to acquire the business strategy. The most typical franchisee fee we see when franchises are in the 350k range tends to be $ 25,000.00.

Right behind the franchisee fee when it comes to addressing our ' worrying ' are the royalty payments that come with your franchise obligation. More often than not these tend to be in the 6- 8 % range, and are a key driver in your cash flow analysis. That’s a good chunk of your profits if not managed properly.

So, we have covered off 3 key things to worry about when it comes to buying and financing a franchise - your overall suitability to run your own business, picking the right franchisor as a long term partner, and finally franchise and royalty fees.

Oh yes... about that financing!! In Canada your business can be financed by a specialized franchise lender, the government via the BIL/CSBF loan program, and a combination of lease and working capital finance options from the non bank sector.

Want to get unworried about financing a franchise? Seek out and speak to a trusted, credible and experienced Canadian busines financing advisor who can ensure you have access to the right financing options, and round out your franchising loan with the right combination of debt and working capital. Get ' un worried ' today!

7 PARK AVENUE FINANCIAL
CANADIAN FRANCHISE 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/financing_franchise_franchising_loan_loans.html

You Can Finance A Tax Credit? Are You Kidding? Financing Film, Media and SRED ( SR&ED ) Credits In Canada

The Art Of Tax Credit Financing – Easier Than You Think!


OVERVIEW – Information on the financing of tax credits in Canada . Film financing, SRED research and Media credit claims can all be financed for cash flow and working capital finance solutions.



Are we kidding? Definitely not! Canadian business owners, including those in the film and video industry in this case can access much needed funds when it comes to film tax credit financing and SRED (SR&ED) finance. And that includes media tax credits also, as that is probably one of the fastest growing aspects of the entertainment industry.

The good news is that you don't need any secret techniques to complete the monetization of tax credits in Canada. Frankly, compared to some comparable U.S. programs it could not be easier and more straightforward.

As we have noted, today we are primarily talking about 2 specific tax credits when it comes to financing - the first is the ' SRED' program, and , at the opposite end of the spectrum an industry fraught with excitement ( and frustration?) , film, TV and digital media projects.

Let’s do the SR&ED recap first! We can safely say that, more than ever, its all about the quality of your claim. The ' advisors' and ' SRED Consultants ' are a mini industry in Canada - in effect they are the brain trust preparing the majority of claims in Canada.

The majority of transactions completed by these consultants and advisors bill their work on a contingency basis, in other words they are assuming a large part of the risk on the acceptance and approval of the claim. It's of course up to you as a business owner/manager to source a consultant that’s capable and experienced, as different industries have different nuances.

It's their work that will be viewed by your CRA office when it comes to legitimacy and amount requested. The fact that the SRED credit is a non repayable cheque from the government allows thousands of Canadian corporations to access billions - yes that’s billions with a ' b ‘, of dollars that is used for further research , working capital, basically any general corporate purpose .

Timing is always a discussion point in SRED claims. First time claimants typically might have their claims audited from both a combination of technical and financial accuracy. That of course always comes back to the quality of your claim.

Let's move on to the subject of... ‘Cash '. Not all SRED claimants know their SR&ED claim can be financed. And the good news, it’s hardly a complex proposal. A basic business application that includes your firm’s financials, a copy of the SRED claim, and some supporting information on the claim and you company is all you need. SRED loans are typically done at 70% loan to value, simply meaning that for every $ 100,000.00 of claim your loan amount be in the 70k range. And the monthly payment? 0. Yes Zero. That’s because your loan is repaid when you receive your government chq - the remaining 30% comes back to you less financing costs.

One of the most dramatic changes in SRED financing is that fact that you can even get accrual financing these days. That simply means you can cash flow your claim prior to filing it, as you spend and recoup funds. Now that’s creativity.


Canada is a leader in film, TV and digital media incentives. And those incentives, aka the ' tax credit ' can be monetized. And that includes, as we have noted the digital media tax credits that are starting to be a huge part of the industry. The largest factor in the make up of the digital credits is the emphasis placed on recovering your actual labor expenses. Simply speaking, you're recovering, via a non repayable credit, a majority of your salaries on your projects.

Using Ontario as an example it is safe to say that your actual programmers, contractors, employees, etc must reside in Ontario. That makes sense, but the Media tax credit is available in pretty well all the provinces of course.

Generally speaking your film, TV and media claim has significantly less risk from an audit or claw back perspective. In other words, you just have to prove you spent the money which can easily be verified via your payroll records, etc.

The process for financing film, TV and media credits. Same as our SRED. A basic application, copy of your claim and supporting data, etc. And those same financing criteria remain intact, relative to amounts financed, etc.


Our bottom line today? Film tax credit financing, SRED finance, and Media tax credits are viable cash flow assets for any owner of the credits. Use them to grow your company, complete your projects, or start another project. Speak to a trusted, credible and experienced Canadian business financing advisor today.

7 PARK AVENUE FINANCIAL
CANADIAN SRED, TV, FILM, AND DIGITAL MEDIA 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/tax_credit_financing_film_sred_media_finance.html