New Business Start Up Financing In Canada

Traditional and Alternative Start Up Loans In Canada


OVERVIEW – Information on solutions for Canadian entrepreneurs seeking new business start up financing in Canada



New business start up financing in Canada; the Canadian business owner and entrepreneur wants, and needs some solid advice and information that firms financed by larger VC firms already have. Many say the system isn’t working when it comes to financing a new venture. Do we agree? Yes... and No! Solutions do exist.

In the case of the start up its all about the traction you need to get to a cash flow positive and profit situation. The challenge is of course getting there, when it comes to the often larger capital investment you need to make to ' bootstrap ' the business.

Let's look at the basic challenge, which is simply the inability of the entrepreneur to obtain business credit. We're often amazed at clients speaking about financing they have received at the inception of their business; who believe they have been awarded some real ' business credit '.

The reality? The bank or other institution, perhaps a leasing company or other commercial finance firm is placed a 100% emphasis on your own net worth and collateral and personal assets. You have of course provided the proverbial ' PG ' - personal guarantee on your ' business financing ‘. Trust us on that one, no business credit has been granted!

Vendors and suppliers are a large part of the challenge. They can be forgiven for wanting to ensure they can get paid. In some cases one of the solutions to the ' supplier credit ' scenario is a purchase order financing arrangement. This allows your supplier to be paid and ship the product you need, with the collateral being the inventory, receivables and sales that are generated out of that arrangement. That type of financing is expensive, but if you have solid gross margins that can withstand that cost supply chain/PO financing is a great solution for the business start up.

Business credit cards certainly are frequently used in the start up phase, and we’re not talking about the ' miscellaneous' purchases, as we have run into many clients that are financing a large part of their start up on the credit card concept. The problem with this? First of all their personal credit might be at risk, given they are more often than note making maximum usage of their card facilities. Secondly, as an overall strategy it's recommended by experts that you separate your business and personal life when it comes to financing. Need help on that one... ask your spouse for an opinion!

Important in new business start up financing is your ability to fundamentally understand the cash flow cycle and how you can address each component of it. The cash flow cycle is pretty simple - its understanding how a dollar flows through your company from the timing around operations, production, shipment, and collection of your sales into your business bank account. The shortfalls you experience along the way need to be addressed with working capital solutions.

Some of those solutions:

The BIL/CSBF loan program – government guaranteed up to 350k

Sale leaseback financing / bridge loans on assets already purchased

Receivable Financing

Comprehensive Asset Based Lending - non bank credit lines on inventory, A/R and equipment

Tax Credit Monetization of SRED Tax credits

Securitization of receivable contracts

So, is the challenge of financing a start up in Canada there? Absolutely, but at the same time solid solutions are available also. You are in a position, with the right assistance, to leap frog those barriers. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist your start up to mature into a great business story.



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/new_business_start_up_financing.html

What Business Start Up Financing And Loans Are Available To The Canadian Entrepreneur

Tapping Your Way Into Start Up Capital In Canada

OVERVIEW – Information on the business start up in Canada. How does the entrepreneur get the capital he needs via financing and loans .




We actually vividly remember when start up financing was easy to get for the Canadian entrepreneur. The time frame? Pretty well... Never!

Financing for a new business venture

in Canada has always been a challenge - and today with globalization, banking crises, and credit bubbles we're pretty much permanently challenged!

Is there any good news? There is, and the reality is that for the informed entrepreneur there are in fact numerous finance and loans options, some of them even ' traditional '.

Start up finance can come in many forms and it's important to know exactly where those sources of funds are. In fact we're fairly positive that a combination of several different sources of capital can in fact get your business ' started up '.

The downside of not getting either all the financing you need, or the wrong financing means just one thing - you're potentially closer to failure on your project.

At the heart of your business idea is the business concept of equity and debt. You need a healthy dose of both to pull off business success. The concepts are very simply, equity denoting ownership or your contribution to the financing, as well as the debt... the borrowed funds. There are some grey areas of course - for instance you could secure a loan from friends and family, but if properly documented it’s really a debt obligation.

The key to obtaining the right financing at the start of your venture is the plan... and that’s the business plan. While clients show us plans that are very heavy on marketing and sales and product potential we tend to gravitate to the financial portion of the plan, trying to ensure that cash flow and cost and revenue estimates are accurate. A simple case in point is that many client plans show revenues of 100k in month one... the problem they have forgotten... That revenue isn’t collected until month 2 or 3!

What are some of the actual finance solutions then that are available to the start up entrepreneur. You'd be surprised. They include:

GGovernment guaranteed SBL loans (easier to get than you think)

Purchase Order Financing

Receivable and Inventory Financing

Financing a SR&ED tax credit for instant cash

Royalty financing

Business Credit Cards ( Not our favorite )

Asset Based Loans



Any one of these options can generate hundreds of thousands of dollars in financing for the start up entrepreneurs of Canada. The Government Small Business loan in fact gets you up to 350k of financing for needs such as equipment, leasehold improvements, computers, even software, etc.


If you're looking for straightforward and real, accessible solutions for a new business venture in Canada seek out and speak to a trusted, credible and experienced Canadian business financing advisor. Getting funded might not be the challenge you think.

7 PARK AVENUE FINANCIAL
CANADIAN START UP 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/business_start_up_financing_loans.html

SBL Government Loans Might Be The Business Loan Solution Your Start Up Needs!

Another Option to the brother- in- law loan ?




OVERVIEW – Information on start up financing in Canada. SBL government loans just might be the business loan that successfully starts your business



Experts agree that start up financing in Canada is a challenge for any entrepreneur. Did it every used to be easy? We're not sure but we do know that capital for the ' start up ' is in fact one of the most challenging issues that you will face. By the way, that goes for debt and equity... although today we're focusing on the debt component of your business. The world of angel investors and private equity and VC's are a subject for another day!


Government SBL loans are an alternative to the entrepreneur having to take a home equity loan, borrow from friends and family (it’s never good to borrow money from your brother in law!)

Or seek alternative financing capital that is available, but comes with higher rates and more restrictive structures.

So, can we say there is less capital around and that it's harder to achieve - The pundits out there will debate all day on that one. Instead we'll focus on getting clients the financing they need, at solid ' big business ' rates, terms and structures, via SBL government loans.

Most Canadian business owners/manager is somewhat skeptical when it comes to the phrase ' government' and small business success. We won't weigh in on the hundreds of reasons they might be thinking that way - all we can say is that the Government small business loan, via Industry Canada has helped thousands and thousands of start up businesses every year. So the proof is in the pudding we maintain!

A key element to understanding the program is simply grasping that you are not dealing directly with Ottawa on these loans, they are offered by your bank when you are able to (finally) find a banker that is familiar and has success with the program. What the government does do is to ' guarantee ' that loan to the bank for the majority of the loan. If you're a good banker that’s a strong incentive to make more loans!

Why would the government get involved in start up financing? The bottom line - we don't care, and we know our clients don't care; they just think it’s a great thing to be able to access financing, to a maximum of 350k, at rates just several points over prime. (By the way, prime couldn't be any lower these days, right?)

We do suspect though that Industry Canada, the sponsor of the program likes to feel that they are stimulating the economy and helping out one of the largest sectors of the economy, the SME sector.

So, start ups. A challenge to finance? Always, but one sure fire solution is SBL start up financing that gets your business out of the gate. Speak to a trusted, credible an experienced Canadian business financing advisor who can assist you with your needs.

7 PARK AVENUE FINANCIAL
START UP 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/start_up_sbl_loans_government_business_loan.html

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