The Federal Small Business Loan In Canada . There’s No ‘ What If ‘ When It Comes To SBL Loans

There’s No Shenanigans When It Comes to SBL Loans in Canada



OVERVIEW – .Information on the Canada federal small business loan . Why the ‘SBL ‘ Can help your business financing needs





The Federal Small Business Loan. When we think of the term ' shenanigans ' it conjures up images of fooling around. There are no shenanigans when it comes to the Canada ' SBL' loan. It's a straight forward program for Canadian firms, start up included, to get the financing they need to start/grow their business.

Is the program a great idea? We think so and here's why, so let's dig in.

For starters any connotation you have with grants or hand outs need to be dispelled right away. You don't have a ' right ' to receive approval for such financing, so it’s a bad idea if you think you are on the ' auto qualifies ' path. You are not.

What SBL loans are about is the fact that its a government guaranteed financing program that is the cornerstone of at least 7000-8000 businesses every year – for Billions ( yes that’s with a ‘ B’ ) . The government, under ' INDUSTRY CANADA ' guarantees the majority of your loan to Canada's chartered banks. The general theory around the federal small business loan is that the bank is making a loan under conditions they otherwise might not be able to make to Canadian businesses with revenues up to 5 Million $, which is the size cap for companies wishing to apply .

When you are approved for such an SBL loan financing its safe to assume you have a good deal. Why? Simply speaking rates, terms and structures are both attractive and competitive. Loan rates are 3% over prime, financing is repayable at any time without penalty, and the whole issue of personal guarantees is often allayed because of the need to provide only a 25% personal covenant for the loan. Those sorts of terms, especially when it comes to start ups, or franchises, are ultra attractive and simply not available with other more traditional loan financings.

So how does the bank, which administers the loan program for the government, assess credit criteria? As we said, there are no shenanigans here; it’s a very simple short list of criteria. Owners must have reasonable personal credit, they must be able to make a 10% permanent down payment (equity) contribution, and they must have a proper business location backed up by a premises lease.

By the way, the SBL program in Canada is really one of the only vehicles that allow you to finance leasehold improvements which typically are difficult to finance under normal circumstances.

You also must ensure you supply a business plan and cash flow projection that demonstrates your ability to repay the loan, which has a maximum borrowing of $ 350,000.00. Remember that the SBL lender, aka our Chartered banks are not equity players. They have no upside! They’re just happy that you can make the loan payments out of cash flow from profits.

Most Canadian business owners and managers never seem to feel that business borrowing is straightforward. In reality we agree its a bit of an art and science ... so seek out and speak to a trusted, credible and experienced Canadian business financing advisor with a business financing track record who can assist you with your SBL small business loan needs .






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 :


FEDERAL SMALL BUSINESS LOAN – THE SBL




7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com
















Stan Prokop

Financing Franchises . The Rules For Franchise Funding In Canada

Can You Imagine Franchise Funding Going Smoothly ?



OVERVIEW – .Information on franchise funding in Canada . Financing franchises is not easy, but gets easier when you know the rules and have he right access to help and expert information




Financing franchises in Canada. Boy would it help to know some of ' the rules ' when it comes to franchise funding going smoothly. We know some of those rules, so let's dig n.

To say that the actual successful acquisition and financing approval for a franchise is a big step for the entrepreneur is a bit of an understatement. Coupled with all the selection, administrative and legal issues that surround acquiring a franchise comes the finance challenge. In some ways entrepreneurs view it as the biggest challenge.


The amount of funds you yourself have to invest often plays a key role in your final franchise decision. While a good portion of your total purchase will in fact be debt of some sort - (leases, loans, working capital, etc) there is the equity component you have to consider. You may not be aware, but many franchisors in fact make a franchisee decision related directly to the amount you have to invest, and they are pretty clear about that on their website and introductions with you.

So where do clients we talk to raise equity for their ' down payment ' portion of the transaction. Some collapse savings, some approach friends and family. While using savings as a key component of your equity in the deal it is certainly not preferred to collapse registered type investments, RRSP's etc in order to avoid the tax bite.

When approaching a bank or a specialized finance firm they will absolutely be focusing on that down payment. And it’s not a question of just showing up with the down payment ability - the bank or lender will typically want to know how it was achieved.

We have referenced banks as a source of financing for financing franchises - that needs to be clarified. Unless you are a very high net worth and valued client of the bank it is somewhat, in fact quite doubtful that the bank will finance the purchase directly. While Canadian chartered banks do realize the benefits a proven business models and market share and systems in place to succeed they rarely finance a franchise outright.

What they do though is to in many cases; utilize the Canadian BIL/CSBF loan program that is provided under the auspices of the government. It's a perfect match for franchise funding by the way, even though we suspect it was designed for that!

The true beauty of that loan also is the fact that no outside collateral is required, so you won’t be asked to collateralize your home, other personal assets etc. Clients are always asking us for a clear explanation of the loan criteria for a BIL Franchise loan. That basic criteria is as follows -

- Good personal credit history
- Ability to contribute 10% minimum permanent equity in the business
- You must have business experience and be able to demonstrate that in a business plan and cash flow forecast
- Your business must have a permanent address and lease that is at least as long as the loan term
- You should be able to demonstrate commitment and enthusiasm - just ' buying a job ' doesn't cut it!


In many ways you can expect that the bank and franchisor are looking at the same things - your business experience, your financial stability, etc. Remember though that the bank or specialized franchise lender isn't an equity partner, they also won’t be sharing in monthly royalties.

So ensure your business plan and cash flow reflects profits and repayment ability! Don't forget also to address the fact that you have working capital and potential long term financing needs, which need to be well thought out.

Can franchise funding go smoothly? It can with the right knowledge, info and resources. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who is an expert and has a track record and can assist you with your franchise financing needs via the right ' RULES'!





CANADIAN FRANCHISE FUNDING




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 :


7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

























Stan Prokop

Business Credit Lines . What Went Wrong And Why Asset Based Funding Can Fix That

The Real Reason Asset Based Funding Works Better


OVERVIEW – Information on why asset based funding is the new alternative when business credit lines don’t work for Canadian business financing needs




Business credit lines in Canada . What went wrong ? When we talk to Canadian business owners and financial managers it's simply a case often of ' not enough ‘, or not at all. They have challenges obtaining traditional bank financing for their operating needs. Is there a solution? One solution is in fact asset based funding for credit line need. Let's dig in and examine why!


The good news about asset based lending is that its pretty well for everyone - from start up to it's current usage by some of the largest companies in Canada . No industry cannot be disqualified by an asset based lending solution, if in fact you have the one requirement - assets!

Asset based funding for credit lines works because it uses somewhat of a... shall we say ' buffet ' approach. By that we mean that it takes a look at all of your assets and picks and chooses to combine into one borrowing facility that you draw down on an ongoing basis. It's that pooling concept that makes ' ABL ' (asset based lending') work. That pool of assets by the way includes receivables, equipment, inventory, even your real estate if your company owns it. Imagine using a portion of your companies building and premises as part of your day to day business line of credit. That's what ABL is/ does.

As a business you have in fact ' unlocked' your borrowing power, and when you combine that with the flexibility of bundling them together into one borrowing facility you in fact have... you guess it, cash flow power!

One aspect of ABL that is sometimes misunderstood, although we have hinted at it already above, is that it has various subsets. So yes, you can just have an ABL A/R facility, in industries where inventory is heavy on the balance sheet - for example a retailer, just the inventory becomes the borrowing power. Ditto for equipment and real estate.

Asst based funding almost always works better if only for the fact that it increases borrowing power. We've seen clients with no borrowing facilities finding themselves in a position of finally have a business credit line.

A recent example - take the case of a manufacturer who re organized their business completely due to a law suit by a major client. That re organization found them with zero borrowing power. Enter the ABL. By putting together a facility that includes receivables, inventory and unencumbered equipment a new facility was created for 500k. So 500k from zero - that’s new borrowing power.

Costs of finance ABL vary significantly. While it almost always is more expensive the business owner / manager has the ability to generate cash flow, grow their business in an almost unlimited fashion, etc. We do hasten to add though that in some cases on larger transactions Asset based funding is in fact cheaper than traditional chartered bank financing. But for the SME owner expect more borrowing power at higher costs.

If you want to discover why business credit line via asset based funding work better seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your credit facility needs .. but better liquidity - that's the trade off.




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 :

7 PARK AVENUE FINANCIAL IS .. BUSINESS CREDIT LINES!





7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com













Stan Prokop

How Working Capital Companies Prevent Cash Flow Armageddon Via Commercial Business Loans

It All Comes Down To Good Working Capital Chemistry


OVERVIEW – .Information on solutions via working capital companies for commercial business loans that accelerate cash flow financing for Canadian companies.



Commercial business loans and asset monetization from working capital companies. It all comes down to some good working capital chemistry if you want to avoid the kind of cash flow Armageddon that besets many firms that we read about in the business papers everyday.

There is no better subject that the Canadian business owner or financial manager can focus on when it comes to improving your chances of busines survival.

And it always comes down to only a few core competancies that you must master , namely collecting your receivables as they come due, managing those payables with your preferred vendors, and turning your inventories, if applicable, over properly . One of our favourite writers described your balance sheet recently as the place where all the dead bodies are buried .

What did he mean by that - simply that that’s where business mistakes tend to accumulate - old inventory, 90 day + receivables, and payables and accruals that aren't recognized properly.

One of the best ways to aggressively generate cash flow is to ensure you have a proper financing vehicle in place for your A/R. That might be a Canadian chartered bank line of credit, or in some cases it might be a receivable financing solution from an idependent commercial finance firm. In certain cases also A/R finance might be a ' subset' of an asset based line of credit. All of these solutions allow you to monetize balance sheet assets into cash flow/working capital needs.

The business owner/ manager in the SME sector can be forgiven for viewing the cash flow situation in his or her company as complex. Bottom line, a whole bunch of things needs to happen to ensure proper business survival.

Inventory is probably even a touchier subject - it's really easy to lose more sales opportunities and larger contracts and orders because of your improper management and financing of inventory. It's a fine line of course because you want to keep the investment you need to make in inventory (and A/R) low but be able to satisfy all your revenue creation needs.

Ways to monetize and properly finance working capital are both traditional and alternative, and diverse. A lot of the choice you can make to finance your company really revolves around what stage your business is in when it comes to borrowing power.

That will dictate whether you can access:

Canadian chartered bank lines of credit
Receivable financing solutions
Inventory finance
Asset based non bank lines of credit
Tax Credit Monetization
Securitization
Purchase Order/ Supply chain finance

All of these will get you to the goal line. But it’s simply a case of knowing how and when. Seek out and speak to a trusted, credible and experienced
Canadian equipment financing advisor who can assist you with commercial business loans from working capital companies that address your firm’s particular needs. It's a great way to avoid cash flow Armageddon!





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 :

WORKING CAPITAL COMPANIES COMMERCIAL BUSINESS LOAN




7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653

Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com























Stan Prokop

Customer Financing . A Vendor Financial Services Lease Offering Is The Lightbulb That Sparks Sales!

Losing Sales Because You’re Not ‘ Optimized ‘ ?


Information on customer financing solutions for Canadian business . A formal, or informal vendor financial services program via lease finance might just be the solution to ‘optimizing ‘ sales!


Customer financing . Could it be the reason your firm is not ' optimized’ for better sales revenues that translate to profits and cash flow. We're told that being ' optimized ' focuses on being ‘effective and useful '. That’s why knowing a bit about how you can master vendor financial services via something such as a lease offering makes your firm optimized to generate more revenues. Let's dig in and examine why!

Most Canadian business owners and financial managers realize that the obstacle of ' pricing ‘is in fact one of the biggest challenges that your clients face when acquiring your products and services. By providing them with a method to defocus on price (ie offering a financial solution such as a lease) you are in a much more competitive position to win sales.

Many significant opportunities for Canadian business are in fact lost because no financing solution was provided. Sometimes we assume the customer will make their own arrangements - while that may sometimes be the case we can assure you that many clients are looking for a total solution. So when they perceive that you are in fact providing a product /service solution, as well as the financing vehicle to complete the transaction... well you know the positive results around that.

Top experts also indicate that many clients will come back to a vendor such as yourself simply for that ' ease of doing business ‘which has included our finance solution.

A common misperception among many companies is that you have to devote a lot of time and financial resources to offer such a solution to clients. Nothing could be farther from the truth. All that you have to do is find a suitable financing partner who can assist you in arranging financing for your clients. The consumer industry is of course, shall we say ' littered' with retail financing schemes, everything from ' don't pay a cent even', and on it goes. Why do these huge corporations offer financing? For the same reason we have maintained that you should - it increases revenues and profits.

There are numerous methods in which the business can enhance their finance offerings. Some of those include offering deferred payments, and another popular method is using a bit of your discount to lower your clients overall rate. That amount typically is much less than if you had no finance offering and in fact were being forced to offer huge discounts to your clients to be perceived as the best competitive offering. What we are saying is that a finance offering simply defocuses your client from price.

Utilizing a customer financing program also generates sales and cash flow in a more positive manner. How? Simply speaking you are paid in full as soon as your client accepts your products and services when offered in a finance solution. Also medium sized and larger companies are always wrestling with budgets and capital expenditure challenges. When you offer a customized finance or lease solution you help eliminate those obstacles of capex budgets and cash flow constraints.

Sales cycles tend to shorten significantly when a financial services customer financing offering is held out to your clients. By working with someone such as a trusted, credible and experienced Canadian business financing advisor you are able to ensure that all the financial issues associated with approval and documentation will be handled efficiently - with little to no involvement by 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 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 :



CUSTOMER FINANCING VENDOR FINANCIAL SERVICES





7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com

Business Receivable Factoring – Rethinking AR Finance Solutions

Turning Cash Flow Scarcity Into Working Capital Prosperity Via A/R Financing



OVERVIEW – .Information on business receivable factoring . How does the AR finance solution compliment and improve cash flow and working capital challenges?




Business receivable factoring in Canada . We suppose you can over think anything in business today, but top experts in Canada say that more and more companies are choosing financing with receivables as their stated cash flow and working capital strategy. Let's examine why that might be the case with AR finance.

There are of course a number of ways in which the Canadian business owner and financial manager can finance their cash flow. Next to ' cash on hand' of course receivables are your most liquid asset. Therefore their ability to turn customer commitments, i.e. your receivables, into that 'cash on hand' is an attractive option - if you're doing it for the right reasons, and also ' doing it right!’

When we say doing it right we mean of course that there are a number of different approaches and options available to the business owner/ financial manager. All of those options revolve around the risk your finance partner is willing to take, and how your facility operates on a daily basis.

Chartered banks of course finance receivables - they do this under their ability to provide Canadian business with an operating line of credit. Their approach differs from factoring, aka ' invoice discounting, aka invoice financing. Your firm holds the risk on collecting your accounts while the bank holds the security to your A/R, typically via a GSA, a general security agreement on all your company.

AR finance differs in that the mechanism under which your receivables are financed in a manner where the paperwork has you selling your A/R as you generate those sales. Ultimately under both scenarios, the bank and the finance factor firm, you have the ability to borrow and draw down on your receivables as you generate revenue. Naturally it’s your call as to how much you borrow and when, according to your needs.

We also point out to clients that financing your A/R is essentially a subset of asset based lending and bank borrowing in Canada. Depending on whether you are dealing with a bank or an asset based lender you also have the ability to margin your inventory and equipment assets in to a business line of credit. We don't want to get overly complex today, but there is also a business financing mechanism called ' Securitization' which is a more sophisticated form of moving your receivables from your balance sheet while generate cash . This is used by larger corporations and finance firms, but not today's subject matter - but worth mentioning.

In business receivable factoring you simply pay a fee, called the ' discount fee' every time you finance your a/r, In Canada on a typical $ 10,000.00 invoice that fee would typically be $ 200.00 for a 30 day period.

It's important to spend a lot of time, and get some solid advice around a business receivable factoring facility that you are paying for only what you use. You would be surprised at some of the tricks of the trade when it comes to the fine print from certain finance firms. In fact our own chosen and recommended method of financing is the CONFIDENTIAL RECEIVABLE FINANCE SOLUTION , allowing you to bill and collect your own receivables and only pay for what you use, when you want. Bottom line, you’re in charge.

Don't get caught in the ' illusion ' of thinking you understand all the technical aspects of AR finance. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow financing needs.





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 :


BUSINESS RECEIVABLE FACTORING AND AR FINANCE


7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653
Email = sprokop@7parkavenuefinancial.com












Stan Prokop

Business Equipment Financing In Canada . Cornering That Lease Approval !

Can You Control An Equipment Lease Approval?


OVERVIEW – .Information on business equipment financing in Canada . What conditions are required to get your asset lease approved under rates, terms and structures that work




'What is my rate?' is a question we’re often asked by customers when they work with us with respect to equipment and lease financing .

They are surprised when I tell them that they get to pick their own rate! (All customers want the lowest rate!)
We’re not trying to be facetious when we make that statement. What we are saying is that the over all credit quality of a customer, as perceived by the lender ( that's important!) is in fact set by the customer, thereby driving a final approval on rate, term and structure of the proposed financing request.


The role of the customer, or their trusted advisor is to understand the basic credit information requirements and how the overall risk to the customer and their industry will be perceived by the lender. The irony of a lot of business leasing is that the industry for the most part used historical analysis to project future ability to pay. That is a difficult concept for the customer to handle more often than not - as an example the customer may have lost some money last year, driving a negative cash flow figure. Prospects have improved, new orders are coming in, and yet the business has a problem in getting new financing.
The customer needs to ensure that the information and ' story ' make the transaction become more ' approvable'.




Critical categories in the information submission by the company are as follows:


Length of time in business
Personal credit history of the owners
Relationships with other financial institutions
Quality of the financials (Some customers submit balance sheets that don't balance!)
Additional collateral available if necessary
Summary of key financial info such as depreciation, cash flows
Positive focus on management and its background and experience


If the customer is qualified to make such a submission a solid package as per our list noted above should lend itself towards an approval at current market rates and structures. If the customer feels they are not properly qualified to make such a submission they are strongly encouraged to used a qualified intermediary who knows the industry and, more importantly, knows the specific weighting given by a lender to the above noted submission requirements.


The amount of information required around each component is more often than not determine by the size of the transaction or the lenders total exposure to that customer. In many cases small ticket transactions (those under $ 25,000.00) are adjudicated via a credit application and public reporting sources such as Equifax or Dun and Bradstreet. Typically 60-70% of all small ticket transactions are approved.


In summary, customers who want to get a prompt and of course positive lease approval should focus on providing a clean package of required information that will ensure a prompt approval based on specific industry requirements around the transaction size and asset type.


Knowing that the lender will focus on future potential of the firm, the management experience, and the collateral asset are valuable data points for any business seeking a business equipment financing lease. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your lease finance needs.






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 :


BUSINESS EQUIPMENT FINANCING CANADA – LEASE FINANCING



7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8
Phone = 905 829 2653
Fax = 905 829 2653

Email = sprokop@7parkavenuefinancial.com












Stan Prokop