How Do Small Business Government Loans Work For Financing A Company In Canada?

Here’s some essential info on Canadian SBL loans


OVERVIEW – Information on small business government loans in Canada . How does this financing work and who qualifies?


If you're a start up business in Canada, or, if you're already in business and need additional financing one alternative, and it’s a great one, is Small Business Government Loans. But how do they work and what exactly are the benefits? And the government? Let's explain!

If there is one government solution and program we can believe in we've always thought that the BIL/CSBF program (aka ' the SBL Loan ‘) is the one. Whether you're a start up or a small business already in motion financing assistance is available through these loans. Stat's show that over 8000 businesses a year apply for and qualify for this business finance, and there isn't really a reason why you shouldn’t be one of them .

In fact you can even be a proprietorship, not a legal company to qualify, which many find surprising. In the U.S. this program is commonly called the SBA program and it has a lot more breadth. But we're not complaining because low rate financing with flexible rates, terms and structures and limited personal guarantees is nothing you'll find us complaining about.

Probably one of the first questions we get from clients, perhaps its more of a concern is their concern as to government red tape, etc. That concern is one that needn't exist, because the government, via Industry Canada charters’ our local banks to facilitate the program for them. And because they like you so much, the good folks in Ottawa actually guarantee most of your loan to the banks. Well, maybe that's over personalizing it a bit! But the reality is that the loan is guaranteed to the banks, which for you is a good thing!

What can you use the funds for? That's where clients are looking for some real clarity. And here, unfortunately is where misinformation abounds!

Small business government loans can be used for real estate, equipment, leaseholds, computers, software, and fixed assets for your company or business. They can not be used for working capital, inventory, goodwill, franchisee fees, etc. We say ' franchise fees' because thousands of franchises in Canada are financed by this program. And you company qualifies if you are a start up or have revenues under 5 Million dollars.

We would never be accused of saying the SBL is ' easy money ‘. It's not, but its available, flexible, and the application process is as straight forward, maybe even more so than any other business financing . All you have to do is ensure you have a proper loan submission that includes a business plan and cash flow forecast along with the other back up info that you would associate with other business loan applications.

So, SBL loans. Here's one case where ' Small ‘ is good , and by the way the 350k cap is hardly an amount of financing that can be considered that small ! Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can put you on the fast track to some major financing for your small or new business.

7 PARK AVENUE FINANCIAL
CANADIAN 'SBL' LOAN 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/small_business_government_loans_financing_canada.html

Business Finance Problems ? Here’s Some Canadian Capital Financing Solutions !

Uncovering Secrets in Business Finance Success


OVERVIEW – Information on techniques to recognize business financing problems and information on financing solutions for Canadian business.



If there is one benefit of meeting and speaking to numerous companies with business finance problems its that one quickly gets a sense of what financing solutions are needed... and when!

In fact a lot of what we could call early warning signs in business challenges emerge pretty clearly - even though those same signs are often ignored or misinterpreted by the Canadian business owner and financial manager. Let's look at some of these business warning signals and how you can nip them... in the bud as they say!

Experienced business owners know that access to capital tends to come and go... its those good times, bad times and boom and bust that makes the journey somewhat... exciting.

Most owners / managers are simply happy to ensure they have access to the right financial solutions for their company. Even more important is ensuring those solutions come with terms, rates and structure that suit those present situations.

Your ability to have access to up to date information at any time is critical to both managing your business and having access to solutions. So when we meet a client that can't produce regular monthly balance sheets and income statements that has always been a warning sign of bad things to come.

Mismanagement of current assets is the real killer in working capital and cash flow problems. If there is any good news in that it’s that there are some great finance vehicles to help you both manage those current assets and address the cash flow challenges that come with any business that's both surviving, and growing.

Let's take a look at some of those current asset warning signals. Key in that category is the double whammy of growth and slowdown in accounts receivable. Not knowing your day’s sales outstanding and the ongoing relationship of sales and receivables is a business killer. Financing receivables in Canada can come in a number of different ways - they include”

Receivable financing / factoring
Comprehensive asset based credit lines that margin A/R at 90%
Bank credit facilities

All of the above solutions come with different rates and structures - some will work for your firms overall credit quality, some might not. What these solutions do provide though is an immediate increase to your ' cash on hand ‘... and that’s a good thing.

Inventory deterioration, or even inventory build up are also key warning signals to a business finance problem. It's important to know your inventory turns, and, similar to receivables monitor those inventories so they aren't continually representing more and more a percentage of your total assets.

We've been talking ' current assets' but at the same time fixed asset concentrations can be a killer also. Here is where proper use of term debt and lease financing are critical.

In summary, knowing what financing you need, and when it critical to the fix for some of those early warning signals we've talked about.

Speak to a trusted, credible and experienced Canadian business financing advisor on ' realistic ' financing vehicles for your firms operations, challenges, and growth.

7 PARK AVENUE FINANCIAL
CANADIAN BUSINESS 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.webpage66.com/business_finance_problems_financing_solutions.html

Franchising Loan? What’s the Difference Between Franchise Finance And Other Business Loans?

Looking for The Complete Story On Franchise Loans?


OVERVIEW – Information on franchise financing in Canada . Exploring the differences between business loans in general and a franchising loan for the would be franchisee.



It's a great client question: What in fact is the difference between a franchising loan and a regular business loan

when it comes to arranging franchise finance in Canada?

The answer? There are some differences, but you just might be surprised at the similarities when it comes to comparing the two. Let's explain.

When it comes to the ' players ' in your finance loan, it’s pretty simple. Contributions are required from you, and your lender / lenders! In Canada those lenders are specialized franchise financing firms, banks, and third party commercial finance companies. While it is extremely difficult in Canada to obtain full financing for your franchise via a Canadian chartered bank the good news is that thousands of franchises are financed via the Government Small Business Loan which can provide funding up to $ $350,000. That's not chump change! . And when you hear what rates and terms and structures are required you'll be even more pleasantly surprised.

Clearly franchising fits into the area of the SME sector of Canada, and for that reason a lot of the challenges that the franchisee faces revolve around the same issues faced by any other start up. Yes , we agree that you're acquiring ( hopefully ) a proven business model but the early stage financing required to get you to a turnkey ' in business ' stage is still viewed as placing a heavy onus on the entrepreneur to come up with a decent portion of the capital yourself .

Franchising, as well as any other type of business requires two key components for initial capital... a ' plan ' and ‘management expertise ". And that plan by the way is known as the ' business plan ' - which is simply your well thought out road map to financial and operational success.

The type of financing that you obtain when you finance a franchise revolves specifically around ' use of funds ‘, another common term for any other business financing. In your case that might be real estate, construction, equipment and fixtures, leaseholds, and some opening inventory if you have a product as opposed to a service franchise.

We mentioned the Govt business loan previously as a great conduit to get you approved for your new business. But we point to out clients that that loan program only covers equipment and leaseholds, so items such as the franchisee fee and opening inventory are not financeable. We wish they were... but they're not!

We have referenced the fact that while Canadian banks provide millions every year for entrepreneurs in the franchise sector via the specialized BIL loan, they in general are reluctant to finance the business outside the Govt program. So discussions around bank financing quickly gravitate to personal collateral, home equity collateralization, etc. It's simply not the optimal way to go if you want to separate your business life from your personal life.

Another strong similarity in franchise finance when

compared to other business financing is the fact that a strong emphasis is placed on your personal financial history. This is typically documented by your credit report and a solid amount of emphasis is placed on this report. In Canada this report is in effect a scoring system and a good score of ' 650’ is required.
Simply speaking, the bank or any other commercial lender wants to know you will run your own business in the same manner as you have arranged and run your personal finances, and that of course makes sense - especially if you're the lender!

So as we have seen many of the concepts and lender views around any business finance loan or proposal pertain to franchise finance, with some nuances / differences. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor for franchise finance assistance.

7 PARK AVENUE FINANCIAL
CANADIAN FRANCHISE 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/franchising_loan_business_loans_franchise_finance.html

Business Financing Change? Let Asset Based Credit Change Your Outlook On The Business Credit Line

Asset Based Lending . Upgrade from an 8 Track Mindset

to IPOD Mindset Via Changing Times In Canadian Business!

OVERVIEW – Information on the asset based credit line as an alternative to traditional business financing and operating borrowing facilities



When it comes to business financing in Canada what would the you do if you could take one of your finance alternatives and take it from the days of 8 track players into the world of IPODS and all the other technology we have access today . Talk about a change in speed and features and ease of doing business, not to mention more for your buck!

That's the analogy we're using today for the Asset based credit line, which is a non bank business finance alternative that provides your company with cash flow and working capital in a manner similar to a Chartered bank business line of credit. But there are significant differences in how these facilities are obtained and how they work. Let's examine some of those key differences.

When we compare how facilities such as this operate it's all about ' revolving ‘. The analogy to your personal lines of credit in your own life isn’t far off here. So if the bank facility and the ABL (asset based line) fluctuate in the same manner, what’s the difference our clients can be forgiven for asking?

One of those key differences simply boils down to availability of funds, because you are in effect borrowing against the whole asset base of your company. To be clearer, most bank facilities focus on conservative margins of 75% of A/R and an even more conservative margining of your inventory. The asset based business facility typically lends at 90% of your receivable, and anywhere from 25-60% of inventory and other assets such as equipment.

How then does the asset based lender take comfort in offering your firm so much more liquidity?

They do that buy utilizing two techniques that are typically ignored by the Canadian chartered bank credit facility. Those two lending techniques are due diligence on the valuation of your assets, and more extensive monthly reporting. But those two techniques deliver because we have often seen clients go anywhere from 50-100% in total additional borrowing power. Talk about a potential liquidity explosion in your firm.

So why isn't ever business borrower in Canada utilizing this method of business finance? We wonder about that one a lot also! but the reality is that this method of revolving business credit is , on balance relatively new in Canada , having come to us from our good friends in the U.S. . Some estimates in the U.S. place asset based lending at 30-40% of all borrowing activity if you can believe that.

Is the Asset Based Credit Line for your firm? It certainly covers all categories, including firms who are in the following phases of their existence:

Start up's
Fast Growth
Special Situations
Firms currently in Special Loans
Companies with solid credit but who are unable to access the full amount of financing they need from our Chartered banks

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you determine the benefits of the ABL credit facility as they relate to your firms cash flow needs. Let this facility, as in our analogy; take you from 8 Track to IPOD...quickly.

7 PARK AVENUE FINANCIAL
CANADIAN ASSET BASED BUSINESS CREDIT LINE 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_asset_based_credit_line.html

Why You Should Care About Business Solvency! Business Cash Flow And Working Capital Solutions In Canada

Understanding And Solving Canadian Business Solvency


OVERVIEW – Information on tools , techniques and solutions around business solvency in Canada . Cash flow and working capital tracking is easier than you think !



Business Health - We're pretty sure dedicated business owners and financials managers care about their business health, and solvency, as much as they care about their personal issues.

And the results of not caring about overall financial health and liquidity in your business are of course disastrous, up to and including business failure. It also goes without saying (but we’ll say it!) that you're in a position to survive and grow when you have business working capital and access to solutions that provide those funds.

The symptoms of poor cash flow should be obvious to every business owner; they include:

Vendor / supplier concerns
Slow receivables
Faulty financial reporting

and on it goes!

When you are on top of things and you have the ability to attract financial solutions. That's a much better position to be in than being ' hat in hand ' in front of a bank or a commercial finance company when your firm is probably closer to ' dire straits ' than poised for growth .

What then are some of the solutions for business working capital and solvency? They in fact are more numerous than you think, and they often can be used in combinations. They are:

Receivable finance
Sale Leaseback Financing
Asset based bridge loans
Comprehensive non bank asset based lines of credit
Purchase order / Supply Chain Financing
Chartered bank business credit lines/term loans

The challenge of course is to ensure which solutions suit your company and when. Here's where you need to take the ' big picture ' outlook as to the business working capital solutions that more perfectly suit your firm’s situation.

To ensure which solutions work you of course need a solid handle on meaningful information from your financials. Unbelievably not every business owner/manager knows how to either pull together the data, or interpret it.

Simple relationships in your financial statements make your banker or non bank lender somewhat of an ‘oracle '

when it comes to predicting business failure. We recommend to clients that they become their own oracle!

Business relationships of the numbers in your financials are both long term and short term. The common word for these relationships is ' ratios’, we prefer our own terminology of a ' relationship '.

When you look at some of the shorter term ' relationships ' in your financials you are really looking at two things; and they are so obvious most owners/managers can't see the forest for the trees.

What are those two things? They are ' changes' and ' movement '. Just keeping track of simple changes in operating expenses, day’s sales outstanding, inventory turns, etc will make you the oracle of your business future. And whether it’s a balance sheet or income statement relationship we assure clients there's meaningful data in them there numbers!!

When you both have a handle on, and care about your cash flow solvency the solutions to growth and operations challenges will become a lot more clearly.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with Canadian working capital solutions.

7 PARK AVENUE FINANCIAL
CANADIAN CASH FLOW FINANCING AND BUSINESS SOLVENCY 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/business_solvency_cash_flow_working_capital.html

Looking For Best Equipment Lease Rates In Canada . It’ About ‘How ‘to Get Them, Not ‘ Where’ When It Comes to Leasing Companies

Expecting The Best Lease Finance Rates In Canada . Here’s How!


OVERVIEW – Information on how the Canadian business owner/manager can achieve best lease rates from leasing companies in Canada when arranging equipment and asset acquisitions.



Here's where you are going wrong. When Canadian business owners and financial managers focus on getting the best lease rates from equipment leasing companies, they are focusing on ' where ‘... not ' how'!

The reality is that the current Canadian landscape is very competitive when it comes to delivering solid asset financing solutions to your firm and industry. So ‘creditworthy’ firms (hopefully yours?!) can expect and demand solid interest rates based on their own particular credit quality. So the thing you are probably working hardest to find is already there.

What is critical though, and often missed by the business owner/ manager is in fact how that rate is delivered in terms of structure, documentation, hidden fees, and the quality of the firm you are dealing with . When you master those you have achieved leasing Nirvana in Canada!

We continually remind clients that in fact your lessor has actually borrowed the money also, so they are focused, and it’s reasonable to assume- all the time, on maximizing the mark up in your transaction. Because that mark up is your profit.

Many lessees (that’s you!)don't know they can easily calculate the lessors profit on your transaction. How? Because the elements of any equipment lease in Canada are term, interest rate, monthly payment, value of the deal, and end of term obligation. Typically you are given all of those, except the rate! So by simply using a financial calculator you're in a position to determine the actual rate you are charged.

Often the most important part of your equipment lease is in fact the final payment. Why? Because it is at that time that it is determine what you signed up for in the documentation of the lease. And if you have entered into the wrong type of transaction (yes ' IT' happens) the actual residual value of the asset becomes the largest part of the profit component of your lease.

The above scenario is particularly true when it comes to your choice of type of lease, capital or operation. If you have chosen a fair market value, aka ' operating lease ' you is in fact obligated to return the asset to the lessor. And they then sell it to further increase their profit on a transaction.

Many business owners are to say least, surprised, you may say dumbfounded when it comes to being told they either have a very low or even 'negative' interest rate in their operating lease overall rate. Why? As we said the lessor is banking on making their profit a few years from now when you are obligated to return the asset.

By the way, don’t get us wrong, in many environments the operating lease is one of the best solutions in town when it comes to financing technology assets such as computers, telecom assets, etc. That’s because those assets are traditionally worth a lot less, sometimes even close to zero, when it comes to economic life/value. So if the lessor wants to take that risk off your back... let them!

One final point on operating leases - if you know what you are doing you'll construct your obligation so that the choice at the end of the term allows you to make the decision to buy, return, or extend the lease. All of those options are available to you, you just didn’t know it. Even worse, you weren’t told. Must have been a slip up, right?!

Our point today, simply that your credit quality and actual interest rate are pretty well predetermined in today’s competitive equipment leasing marketplace. Dealing with the right firm, and understanding the documentation you enter into is key to asset financing success. Focus on ' how' not ' where '!

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor on equipment finance solutions that work... in your favor!

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/leasing_companies_best_lease_rates_equipment.html

Can Financing Receivables Ignite Your Business Funding . Cost and Benefits Of Factoring Funding In Canada

Know How To Fire Up Business Cash Flow?



OVERVIEW – Information on financing receivables in Canada. Assessing invoice finance as a finance option , and understanding the cost of factoring a/r in the Canadian business financing marketplace.



We'd all agree there’s a major difference in igniting, and on the other hand, freezing your business credit. We maintain to clients that financing receivables is a key ' igniter '

of cash flow funding in Canada when the Canadian business owner and financial manager is experiencing the business credit freeze !

Trends now show that thousands of businesses in Canada find themselves unable to get the financing they need. Whether they are ' cut off ' or simply ' restricted' in getting capital into their firm the repercussions can be anywhere from being mild to severe, severe of course meaning closing your business.

So why is receivable finance funding different, and how does the business owner/manager asses the cost of factoring A/R into a sensible arrangement?

The essence of invoice discounting, aka ' factoring, aka ' invoice discounting ' is simply the ability to monetize sales directly into cash as you generate revenue. That in itself is a powerful statement. Where things go wrong is when your business locks itself into a facility that either costs too much, is unwieldy to operate, and simply doesnt mesh with your day to day operations. By the way, that absolutely doesnt have to be the case!

So if banks also margin receivables for cash flow for your business wouldn't Canada's chartered banks be the optimal solutions for cash flow finance. Well they would be that perfect solution if your business qualifies, and if you do qualify do you in fact have access to all the credit you need to grow the business when it comes to seasonality, large orders, cash flow bulges, slow paying clients, etc. The answer is that while our banks in Canada provide the best and most ' low cost ' solution the reality is that not everyone qualifies.

The short answer to bank versus non bank funding in Canada, when it comes to A/R finance is that the bank bases its decision on your sales, profits, and balance sheet; Factoring on the other hand bases its finance formula only on your sales and the invoices generated from that revenue. Oh and by the way, funding is in fact ' same day '. And it's only as complex as you want it to be , and the industry itself , unfortunately does not always do a good job of explaining facilities ; sometimes employing smoke and mirrors

to hide costs and day to day facilitation of the financing . That's when you need clarity!

The key to a successful A/R finance program in Canada is your management of the program. The type of facility you enter into, as well as your ability to control what you finance and when is critical. And , as a kicker, our recommendation to clients are ' confidential ' facilities that allow you to bill and collect your own receivables in a manner that allows the competition to do only one thing - figure out where you are getting all that cash .

Whether you're a start up, medium sized firm, or a large corporation, financing receivables can be a huge part of your business success. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor today who can assist you with the facility that makes the most sense for your unique needs.

7 PARK AVENUE FINANCIAL
CANADIAN RECEIVABLE 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/financing_receivables_cost_of_factoring_funding.html