How To Increase The Odds Of Successful Business Financing In Canada. Funding Your Company With Credit And Loan Solutions

Solving Business Credit Challenges In Canada

Information on business financing in Canada. Funding solutions for loan and asset monetization via commercial credit .


We're sticking our necks out a bit by saying that in general gambling is not a good thing but when it comes to business financing there are a lot of ways the business owner / financial manager can increase the odds

of funding their business with proper business credit and loan solutions.

It's a question of maximizing relationships and knowing at what point in time you need to seek debt or equity options. Most business owners would agree that finding the right solution is hard enough then comes the challenge of ensuring in a step by step basis that you can successfully complete that financing. In Canada some forms of business funding can be completed in hours ( example - leases for assets under 50k) while at the other end of the spectrum larger more complex solutions can take days, weeks, and unfortunately even months . Being unprepared for such timelines as is needed often leads to serious problems.

Knowing what those sources of financing are in Canada is half the battle - there typically is more than you think, and when you are focused on the right solution you have probably already increased your odds.

If we had to summarize in a fairly concise form the major sources of business financing, from a debt and asset monetization point of view (not equity) they would be as follows:

Receivable finance
Inventory Financing
Equipment Financing
Asset based lending
Traditional bank lines
Term Loans
Unsecured cash flow loans / securitization
Supply chain / Purchase order funding
Tax Credit Monetization

How then do you decide what fits when? We won’t weigh into the debate f whether there is too little or too much capital around these days, but we can guarantee the business owner/manager there somewhere out there is a solution that works for them. The business owner often focuses on Canadian chartered banks for many of the solutions we have noted above. We've done that for hundreds of years, so why change things, right?

The reality though is that many non bank commercial entities - i.e. leasing companies, non bank asset based lenders, niche players in PO finance and Tax Credits etc provide billions of dollars of financing and funding solutions for business everyday . How to get those solutions to trickle down into exactly what your business needs is the challenge.

If you feel that your total knowledge of business funding solutions is limited and have a real desire to expand the range of solutions available for your challenges seek out and speak to a trusted , credible and experienced Canadian business financing advisor who can assist you with your commercial credit and loan needs. Doing that increases ... the odds!

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.com/business_financing_funding_credit_loan.html

Government Business Loans . How The SBL Loan Program Can Help Your Company

What’s The Noise And Commotion Around Government Loans?


OVERVIEW – Information on who can use and apply for government business loans and why the SBL loan program helps thousands of Canadian businesses every year .



Canadian business owners / managers might just get some valuable financing assistance from the 800 lb. gorilla of government business loans - we're referring of course to the SBL loan program in Canada.

When it comes to accessing up to 350k of new capital for your business it pretty well is the only game in town when other forms of traditional financing just seem a bit of a stretch... for the lender. For a qualifying business these loans offer solid rates, terms and structures. The bottom line... affordable and great access to capital!

Most Canadian business arent really aware that the government department known as INDUSTRY CANADA has this loan program in place to help you success in business. And that can be from a start up right up to when you achieve your first 5 Million dollars in revenue. (The 5M is the revenue cap your company or business must be under to qualify for the loan).

Quite frankly the program is one of your best friends for financing items such as equipment, leasehold improvements, computers and application software, and even real estate if that’s applicable.

The first thing you need to understand is that INDUSTRY CANADA itself, the ' sponsor ' of the program does not make the actual loans. They charter our Canadian banks to make these loans, and the government underwrites or guarantees most of the loan. As we have said in the past - ‘Talk about a great co signer ‘! Since the banks are assured of payment they of course become much more flexible when it comes to amortizations of the loan, credit approval, and other ratios such as debt to equity.

Naturally this program is geared to supporting business development in Canada - it's no secret that the majority of growth and employment these days comes from the SME sector... That’s where start ups evolve, business grows into corporations and people get hired. That’s economics 101 we guess.

So what do you have to do to qualify for this the SBL loan program? That's the most often asked question from clients inquiring about government business loans. The basics are a decent personal credit history, a minimum equity down payment of 10 per cent, and the ability to demonstrate your business has the working capital to get out of the start up phase.

The problem arises when the business owner/applicant things the SBL loan program is ' easy ' to get. We're a bit biased - we don’t think it's hard, but you do in fact have to have some fundamentals in place. Oh and by the way, many bankers either aren't familiar with the program, or are incapable of putting together the application, only because of their lack of interest or experience. So, point taken, seek out a banker or, even better, an independent Canadian business financing advisor who can get you fast tracked to financing success.

To recap, over 8000 business every year are approved under the program. All you need is a business plan and some typical back up information that you would have to supply for any type of financing whatsoever. And don't forget, outside collateral is not required- and you'll be more successful if you demonstrate you have the character and experience to make your business successful.

So, what is all the noise about?

It's the fact that financing you need just might be around the corner.





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/government-business-loans-sbl-loan-program.html

Choice In Asset Financing . Know When Leasing Assets Via a Canadian Leasing Company Makes Sense

Canadian Equipment Financing – The Choice


OVERVIEW – Information on leasing assets in Canada. Asset Financing via a business leasing company is the perfect option for the Canadian business owner /manager .


The proverbial fork in the road

when it comes to asset financing is the choice between leasing those assets or a term loan. What then is the value to choosing the alternative of the leasing company in Canada as one of those choices?

One key advantage these days is simply the fact that actual interest rates are quite low, so the Canadian business owner / financial manager can spread the actual monthly payments over a term of 2- 7 years to achieve lower monthly cash outflows - while all the same time receiving the benefits of using those newly acquired assets to generate sales and profits.

While the leasing company in Canada always touts ' 100% financing ' we point out to clients though that typically a first and last month payment is often required, which may also simply be referred to as a down payment of the equivalent amount. Bottom line, with great rates and only a nominal ' down stroke ' it's still a pretty good deal.

Competition reigns supreme for the leasing company in Canada today. While that is not necessarily good for them it’s of course great for the Canadian corporation accessing this type of financing.

In Canada the market is segmented in a couple ways - thee are bank leasing firms, as well as commercial independent non bank firms, and coming up the road quickly are what is known as ' captive ' firms which are related to or owned by the manufacturer of your asset . As a general rule of thumb captive lease asset financing is always very attractive - the captives are incented to approve more product for their owners, and they have various scheme to incent you to acquire that product - financing being one of them!

Clients will often ask us if there is in fact anything wrong with leasing assets or the alternative, purchasing them. While we feel the advantages far outweigh the alternatives to lease finance we do point out some simply basics, one being that leasing is non cancellable so you are in fact committed to the full term of the lease you have signed up for .

Oh , and about that lease - here's where the industry gets very creative in offering a solution that makes sense - either from a lease to own, or a lease to use point of view . We're referring to capital leases and operating leases respectively, and the advantages of each are somewhat different. If we had to summarize the one difference between an operating lease and a capital lease it would be simply that you have more choice at the end of the term of the lease - your firm can purchase the asset, return it, extend the lease at a negotiated amount, or in many cases upgrade the asset and refinance. Technology financing, aka computers and telecom equipment is the best example of utilizing operating lease for the use of the asset, not their incredible ability to depreciate and become outdated! ‘What ... we're not buying computer desk tops anymore?’!


So how do you determine the best choices in dealing with a leasing company in Canada? Simple. Spend some time on the basics or alternatively seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you meet your asset acquisition needs.

7 PARK AVENUE FINANCIAL
CANADIAN ASSET FINANCING & LEASING 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/leasing_assets_leasing_company_asset_financing.html

Financing Loans For Your Franchise . ‘ Money Money Everywhere ‘ .. Kind Of . Funding Canadian Franchises

Canadian Franchise Funding Tips


Information on accessing capital for financing loans for the Canadian franchise . Funding franchises is specialized finance!



‘Money ... Money everywhere ...' we hear that all the time , but when it comes to financing loans for franchises all of a sudden why do things seem a bit .. Shall we say ' scarce '?!

Funding franchises becomes of prime importance once the franchisee has selected their business model and franchisor. While there are solid ' text book ' reasons as to why you need a business plan (some might call it a strong executive summary) one of the main ones is it's a key part of your business loan application for a franchise.



We'll focus on a bit more detail as to what’s in those business plans a bit later. Many franchisees (that’s you!) somewhat mistakenly believe that their franchisor, be it Canadian or U.S. has a special program of financing available. We can say this is partially true, because many of the larger more established chains have taken the time to profile their business and business model with various financial institutions, in some cases banks also.

While the franchisor ' program ' we're talking about in the above will help you understand some of the basics you should never assume they guarantee you a financing approval. But we can comfortably say they can reduce some of the ' hassle '.

We also caution clients to spend some time understanding what some of the actual franchisor requirements are when it comes to financing, minimum personal net worth, ownership equity contribution , etc . We've got several ' war stories ' around franchisees not even understanding what their franchisor required, let alone their financing entity!

The actual amount of capital required to purchase your business and ' open the door ' so to speak is where things either fall apart of come together. That’s because an astute and well prepared franchisee will take the proper amount of time to spend on the financials of the business, and that includes areas such as up front franchise fees, equipment, leaseholds, rolling stock, and in some cases even real estate if you have purchased a franchise that has a real estate component to it.

We alluded previously to the business plan as a key part of your journey on funding franchises in Canada. The finance part of that business plan should show an opening balance sheet and realistic cash flows that reflect the start up and growth of the business. Oh, and don't forget that the lender will want to see their loan payment in there also, reflecting their main interest in your business... how they will get paid! Oh and don’t forget there is lots of relatively inexpensive help to get your business plan completed if you’re not the type that dreams about balance sheets , income statements and projections!

If we had to summarize it we could easily say that the key elements of a successful plan for financing loans for a franchise are simply the following:

Your own financial contribution
Your combinations of loans

In Canada you can purchase a franchise and finance it properly with anywhere from a 10-50% equity contribution from yourself. Those funds tend to be permanently required in nature and vary based on the size of the franchise.

In Canada financing loans for franchisees come from either the Govt Small Business Loan program or specialized finance firms that might have a program arrangement with your franchisor / master franchisor. Thousands of entrepreneurs choose the SBL loan as their proven funding vehicle when their requirements are under $ 350,000.00, which is the cap on the program.

So yes, ' money money everywhere '.... if you're well prepared, have a solid loan package that reflects time and realism. For access to actual financing you might choose to seek out and speak to a trusted, credible and experienced business financing professional that has proven expertise in franchise funding.

7 PARK AVENUE FINANCIAL
CANADIAN FRANCHISE FUNDING 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_loans_for_franchise_funding_franchises.html

Business Financing Challenges At The Fiscal Cliff ? Navigating Loan Interest Rates And Finance Capital Solutions

Business Funding .. When You Need It

Information on business financing in Canada . How to assess interest rates on finance capital based on asset and cash flow financing strategies .



It's actually pretty easy today for Canadian busines owners and financial managers to feel that business financing is hardly easy anymore. To put it in the context of recent events in the U.S. the business owners in Canada actually often feel they are at the edge of the ' fiscal cliff '.

And boy does that cliff seem steep sometimes as we see competition in our businesses closing in on us every day. But if your new or emerging competitors are raising financing capital and accessing finance solutions and interest rates commensurate with their credit quality... why can't you?

The answer of course is... you can... if you know how, who to talk to, and are focused on a realistic solution that makes sense for your company.

One of the big mistakes that some business owners / managers make when it comes to financing is that they focus on only one solution ( unfortunately they also might be focusing on the wrong one !) when in fact there are a number of capital and finance solutions that are quite complimentary to each other . As an example we often get calls from existing or potential clients looking for ' inventory financing ‘. While this can in fact be achieved (it’s not easy by the way) the reality is that this type of solution is often best achieved in the context of a ' comprehensive ‘ asset based business line of credit by a non bank finance firm.

We're also assuming that your business is past the ' friends and family' stage which has business entrepreneurs accessing capital via family loans and gifts, credit cards, collapsing of savings, personal lines of credit, etc ... While interest rates on those might be great they typically can only get your business so far - so if you're in it for the long haul, or established already its time to move on - to real business financing!


So... getting ' fully funded ' to operate or grow. What can you as the owner /manager do to achieve that? A good start is understanding the difference between debt and equity. While most people understand that equity means new partners and dilution of ownership they often don't understand that their business is not ready for angel investors and VC’s. So debt financing is the option, but we're talking about debt financing... done right!

Having a solid business plan or executive summary is key to financial funding success. At its most basic it covers off a very simple concept - how you will use the funds and how will financing be paid.

Another key take away for your navigation of debt financing? Simply that a lot of financing solutions bring debt to your balance sheet ; when in many circumstances you can simply monetize assets without bring debt to your financials . Those solutions include:

Non bank lines of credit
Sale Leasebacks
Bridge Loans
Receivable Financing/ Factoring
Tax Credit Monetization
Securitization of A/R portfolios.
Unsecured cash flow loans

Etc! Bottom line - a lot of new capital commensurate with interest rates that makes sense for your firm, and no long term debt on the balance sheet. That's a good thing!

Flexibility is key to proper business financing. Many finance solutions come with higher rates, at least for an interim period. But if they are sustainable and can allow you to take the business to the next level then they just might make a lot of sense. And boy is that better than giving up equity or going down the road of searching for ' investors ' when that solution simply isn’t attainable or doesnt make sense.

Seek out and speak to a trusted credible and experienced Canadian business financing advisor on how you can access finance capital for your firm.


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_interest_rates_finance_capital.html

Leasing Assets ? Don’t Plead ‘ The Fifth ‘ When It Comes To Asset Financing And Using The Finance Lease !

Here’s Your ‘ Cheat Sheet ‘ On Canadian Lease Financing



Information on leasing assets in Canada . Asset Financing knowledge is key to a success finance lease strategy for acquisition of assets .




When it comes to leasing assets in Canada is it your turn to ' take the fifth '? We're talking about lease financing using such vehicles as the finance lease or operating lease to run and grow your business.

And oh yes, about ' taking the fifth '!

That's of course the U.S. term which invokes your right against self incrimination. When you do that you're simply saying you’re kind of guilty, don’t you think? But it doesn't have to be that way. Just spending some time in understanding some key lease finance basics will put you way ahead of the game. And here are some of those basics.

As a business owner or financial manager in Canada you have basically got three choices when acquiring a business asset - they are:

Purchasing the asset
Leasing the asset
Taking out a term or bridge loan on the asset

Typically our clients most often used excuse for considering lease financing is simply they would like to match cash outflows with the use of the asset over a specific period of time. In Canada lease terms tend to be from 3 to 5 years, but they can be shorter... or longer...depending on the asset and type of lease you enter into.

There are always some key accounting issues to consider when it comes to asset financing; most of those are quite positive when it comes to leasing - they include being able to depreciate the equipment and expense the interest.

Lease rates; unfortunately tend to be ' top of mind ' when it comes to client decisions to lease assets. The irony is that even when some owners/mangers don't even know how the lessor calculates those rates they still seem to be top of mind. We cringe every time we hear ' what’s my rate?' if only because there are so many other factors which determine a great lease. We sometimes think instead of asking ' what’s my rate ' the owner/manager should take ' I plead the fifth' because I am not 100% sure what I am talking about! But that’s a subject for another day.

One final point about the rate though and it’s simply that your credit quality is pretty well pre determined when it comes to credit approval for the asset in questions. Smaller ticket items in Canada, often up to 50k don’t even require financial statement disclosure, but you should be expected to provide full financial disclosure for the asset you are financing.

Because the industry is so competitive in Canada even if your firm’s credit quality has some issues the benefit of leasing is that your deal can be ' structured ' to ensure approval. Structuring simply might be a higher rate, a down payment, additional supplementary collateral, etc. The one downside of leasing is that it generally is not repayable without penalty, and the best you can hope to achieve here is some sort of negotiated lower buyout amount at the mercy of the lessor. So if you are entering into a 3 or 5 year lease... caveat emptor!

So, is the lease option for your firm when it comes to asset financing. Top experts in the field indicate that over 80% of all North American businesses utilize this method of asset acquisition. Spend some time understanding your options, and seek the services of a trusted, credible and experienced Canadian business financing advisor who can assist you with your ' lease vs. buy ' decision.

7 PARK AVENUE FINANCIAL
CANADIAN LEASE 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/leasing_assets_asset_financing_finance_lease.html

3 Things You Need To Know About AR Finance. Fun Facts On Receivable Financing And Factoring In Canada

Why A/R Financing Isn’t a Bad Bet ! Demystifying Factoring


OVERVIEW – Information on AR Finance and factoring in Canada . If you know the true cost you can make receivable financing work for a business cash flow solution



When the Canadian business owner or financial manager wants to be more effective with their AR Finance strategy experts will tell you that it comes down to understanding 3 basic concepts .

What are they? They are not as complicated as you might think. Let's recap them and show you how this method of business financing, aka ' receivable financing / factoring allows you to leapfrog financial challenges that seemed like huge barriers in the past.

So back to those three critical concepts - they are as follows:

1. All borrowing under this facility is based on the value of your receivables, and typical borrowing limits are 90% of all A/R under 90 days old

2. Factoring finance is not debt and it’s not managed in the way that a Canadian chartered bank would monetize its receivables

3. The way to win when you have a finance facility such as this is to understand that relationship between all 3 parties to the transaction - your firm, your client and your finance factor partner. Putting the right type of facility in place is what allows you to increase cash flow.

It's also critical to understand what amount of your sales is eligible when you consider this method of financing. We've previously referenced that you typically can borrow up to 90% of your total A/R - and we remind clients that typically a Canadian chartered bank would margin your facility at only 75% - so you are already ahead of the game!

If you are working with the right partner firm you should be in a position to finance all North American receivables. The challenge of non North American A/R, i.e. foreign sales typically can be solved by putting a credit insurance policy in place. There are a solid handful of credit insurance firms in Canada that will assist you in insuring your sales, thereby making them easier to finance.

On occasion it may be more difficult to finance government sales due to the governments position around recognizing this type of financing.

When you enter into a factoring facility its critical that your finance firm understands your day to day operations, specifically s they related to your historical bad debt experience, customer returns, etc .This entire area is viewed as ' dilution ' by your finance firm, and they want to simply understand the true value and quality of your a/r .. so they can finance the maximum for your company.

Cost is always critical when it comes to entering into any business financing facility - whether that be term debt, loans, or, in our case today, monetization of assets. While factoring has a reputation for being expensive financing this is not necessarily true. At the end of the day costs involved in A/R finance must be viewed as your trade off to more liquidity, generating more sales more often, and rationalizing that you might not be able to get the same amount of capital elsewhere.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in ensuring you’ve got our 3 concepts nailed down properly!

7 PARK AVENUE FINANCIAL
CANADIAN FACTORING / 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/ar_finance_factoring_receivable_finance.html