Our blog highlights Canadian Business Financing solutions via receivable finance , equipment finance, working capital financing, asset based lending, business acquisition financing,franchise finance, and tax credit monetization via SRED and Film Tax Credits. Our goal is to educate and assist Canadian businesses with their financing needs. You Are Looking For Canadian Business Financing! Welcome to 7 Park Avenue Financial Call Now ! - Direct Line - 416 319 5769
WELCOME !
In 2004 I founded 7 PARK AVENUE FINANCIAL. At that time I had spent all my working life, at that time - Over 30 years in Commercial credit and lending and Canadian business financing. I believe the commercial lending landscape has drastically changed in Canada. I believe a void exists for business owners and finance managers for companies, large and small who want service, creativity, and alternatives.
Every day we strive to consistently deliver business financing that you feel meets the needs of your business. If you believe as we do that financing solutions and alternatives exist for your firm we want to talk to you. Our purpose is simple: we want to deliver the best business finance solutions for your company.
Sunday, May 12, 2013
Business Financing Alternative Options In Canada . Surprised At The Different Personalities ?
Is Business Finance In Canada Changing Dramatically ?
OVERVIEW – .Information on business financing alternative options in Canada ..
Business Financing methods . New and existing businesses are always looking for capital. Although a solid majority of business owners, managers and entrepreneurs know where to look, many can’t make that claim. Additionally there are a number of little known ways to finance a business that are not as ‘main street ‘ as the obvious choices – our Canadian chartered banks, etc.
We suppose if the entrepreneur/owner knew exactly what to do all they would need is the Yellow Pages and a phone; however that is not the case.
Looking for financing methods requires that you immediately ‘slot’ your needs into one of two buckets – equity, or debt. Naturally the SME sector in Canada is not funded from an equity perspective via our banks. Simply – they don’t do that!
The other natural tendency is to take the government up on their offer of assistance. Like you, we’ve seen the commercials! When it comes to real world access to government funding we work with our clients in two areas – The federal government SBL loan, and SR&ED tax credit financing. Either of these two are tremendous ways to help finance your business, particularly in the early stages.
Some other methods of equity financing in early stages include angel investors, reverse takeovers of public companies with cash and no business currently inside them, and the newest kid on the block , ‘ Crowdsourcing ‘ . (It’s our understanding you simply ask 1 Million people for 1$!)
In Canada there are a number of Community Futures programs which fund regional development via loans. It’s our experience these loans have never provided the business owner with all that they need, an alternative financing is also required.
Many business people aren’t aware of Royalty financing, it’s an innovative way to promise future payment via future sales. You just need the confidence you can make those sales goals from your lender.
At 7 Park we focus on the more common methods of financing a business – including:
A/R finance
Working Capital Term Loans
Equipment finance / Sale Leasebacks
SBL loans
Asset based lines of Credit
Revolving bank facilities
Etc.
What are the biggest challenges encountered in financing a business?
When examining debt financing options challenges that business people need to address include:
The need for hard assets which can be collateralized or monetized
The need to give up assets as security for debt type financings
Ensuring that your business assets have real value – i.e. Realizable receivables, sales growth, quality inventory turnover, etc
When you are looking for equity financing, which is not our specialty at 7 Park Avenue Financial the mindset of the investor (not a lender) changes. They want technology or businesses with a proven competitive edge, strong growth potential, sensible exit strategies.
What are the things you should avoid when financing a business?
At 7 Park Avenue Financial we’re always cautioning our clients to separate their personal finances from their business finances. Tapping significantly into registered savings plans is by far not the best funding option if you can access other options. And by the way, debt is cheaper than equity – look into that comment!
How will you document the financials of the business?
This is a great question. Documenting your financials via a realistic business plan and cash flow forecast is key. Just being able to answer simple questions such as ‘ how long will it take you to collect ‘, ‘ are your costs in line with others ‘ ‘ how will you market your product or service ‘ are key to winning over a lender or investor . You have to be able to estimate reasonable sales and show a cash flow that shows ‘how your company works!”
What are the necessary skills you should possess to run this business efficiently?
Operating and financial management skills are key to how you will be perceived and dealt with by lenders and investors. Your management and financial skills must be clearly evident to lenders, either through your financial track record in business, or in person meetings to present your firm. If your company is perceived as ‘incomplete’ when it comes to key personnel you will never get the full financing you need at rates, terms and structures you want.
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with methods to finance your company – both alternative and traditional .
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 = BUSINESS FINANCING ALTERNATIVE OPTIONS !
CONTACT:
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
Saturday, May 11, 2013
Mezzanine Funding In Canada . What You’ll Learn About Cash Flow Financing In Canada
The Math Of Mezz – Mezzanine Facility Debt Financing
OVERVIEW – .Information on mezzanine funding in Canada . This unique method of cash flow financing provides alternatives to traditional secured lending solutions
Mezzanine funding in Canada. This somewhat unknown and probably under utilized method of debt financing in Canada provides some unique differences for Canadian business owners and financial managers looking for capital solutions. Let's dig in!
The fundamental basic of ' mezz ' financing is that it best suits firms who have cash flow and growth prospects (and profits by the way) but just seem unable to secure all the financing they need from Canadian chartered banks.
We've often spoken on why our Canadian chartered banks are unable to deliver on the financing your company might need. Issues of quality of hard collateral, debt to equity ratios, or firms who are in turnaround or restructuring mode simply don't always lend themselves to bank financing. Enter Mezzanine finance!
Typical mezzanine structures tend to be in the 5 year range, although that time frame has the ability to vary. It's critical to note that the mezzanine lender is always attempting to figure out how they will be ' taken out ' of the facility they have put in place for your company. That ' take out' might take the shape of a public offering, or a change into a secured lending facility. In some cases the company may be purchased, acquired or re financed.
While it's safe to say that any lender of substance is always going to assess management strength the ' unsecured' position that mezzanine funding takes on simply requires even more of a focus on the management team of the borrowing company.
So when, and why should Canadian business owners and financial managers consider a mezzanine finance solution. The reality is that a number of different scenarios might be being faced by your firm. This includes:
Contemplating an acquisition
MBO's ( management buy outs )
Restructuring
High Growth Scenarios
Asset Purchases
Let's be clear that all companies who are considering ' mezz ‘are not going to qualify. If your firm is a start up, is in r&d stage, and cant provide the solid cash flow story to repay the mezzanine loan... well let's just say ' its not going to happen '!
The key point around ‘mezz’ funding is that it occupies the unique position of being right in between the concepts of debt and equity because its loan per se its structured and more commonly thought of as debt, but in reality it’s somewhat unsecured. Also important to understand that it is not an operating facility , so don’t view it as operating capital along the lines of a business line of credit or asset based lending solution . Best way to think of it? Permanent working capital! It's a 2nd position financing, behind your secured lenders.
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow financing needs.
P.S. Remember always that it’s cheaper than equity
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 = CANADIAN MEZZANINE FUNDING AND CASH FLOW FINANCING SOLUTIONS
CONTACT:
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
Government Business Loans. Here’s the Rules To Follow In SBL Funding Success
The Language Of The SBL Loan In Canada
OVERVIEW – .Information on the successful acquisition of government business loans in Canada . Funding for SBL loans just might be easier than you think if you know the lingo and rules!
Governement business loans in Canada. When you understand the ' rules ' and the ' lingo ' (the language of SBL Loans) you are of course well primed to achieve business funding success. Let's dig in.
There is no doubt that Canadian business owners, including start ups are more interested than ever in exploring govt small business loans under the Federal BIL/CSBF program. Those are the actual acronyms for the program that is offered/sponsored by Industry Canada in Ottawa. Most of us just call it the ' SBL' - the small business loan.
At the end of the day understanding the rules of being successful in government guaranteed loans comes down to just a few basic components
Qualifications
Documentation
Approval Requirements
So why is the SBL such a solid option when financing challenges are tough as ever? Of the 7000-8000 loans that are approved under the program we would venture to say that many of those are start ups or franchise acquisitions. Traditional financing for the start up or franchising acquisition is tough to get, so government business loans offer a perfect solution to that need.
While many business owners mistakenly think that they have to deal with ' the government ' for this financing the truth is all it takes is to seek out and find a Canadian banker that is knowledgeable and supportive of the program. (In our experience let's just say that some bankers either aren't interested or not qualified to successfully back you request - Enough said!)
All business owners and managers are in favor of increasing their odds of approval - making the program uncomplicated and straightforward is what we are trying to convey.
While we do basically agree that there are more choices than ever for non bank financing in Canada today we also recognize that the requirements from many commercial finance companies don't allow everyone to achieve financing success. So business owners/ managers seeking loans for their business are often asked for 100 per cent personal guarantees, outside collateral, co signers, etc. Other requirements might include strict covenants and ratio maintenance, and penalties when you get successful and want to prepay the loans!
So where do government business loans weigh in on in those areas. Well get ready, because it’s all good news:
100% Personal guarantees for SBL financing is not required
No outside collateral is required
Co -signers are not accepted by the program
No ongoing covenants need to be maintained
Pre payment of the loan comes with no penalties
Bottom line - It just doesnt get any better!
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can help you out with the rules of government business loans and funding approval for your business.
P.S. The loan maximum under the program is $350,000.00 and your start up or business must have projected or actual revenues less than 5 Million dollars.
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 = GOVERNMENT BUSINESS LOANS EXPERTISE
CONTACT:
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
Thursday, May 9, 2013
Business Franchise Loan Challenges ? Here’s How Franchising Loans Really Work In Canada
Professional Tips on Franchise Finance In Canada
OVERVIEW – .Information on the business franchise loan in Canada. What You need to know about franchising loans for entrepreneurial success in this industry
Business franchise loan challenges in Canada? We're the first to admit that the concept of getting a ' tip ' in business is not always a good thing but we’re drawing from successful experience in franchising loans that assist clients who are serious about entering this type of business.. and being successful!
There is of course a long journey between the time you decide to purchase a franchise to the time that ribbon opening! Along the way you have been vetted by the franchisor, investigated and researched your purchase decision , probably spent some time in training and orientation, and... Oh yes, we forgot... faced the finance challenge of buying the business!
Many franchisees either struggle or are uninformed about how much equity, aka ' down payment ' they have to put in the business. We forgive them for this confusion because it’s a three pronged issue -
1. How much capital the owner can comfortable raise or put in
2. How much equity capital is required by the type of financing you ultimately enter into?
3. How much capital in some cases that the franchisor insists on as a prerequisite to entering into their program - typically that amt. is one to listen to carefully as its often based on the franchisors experience as to what it takes to be financially successful, not just ' sales and revenue successful '!
While Canadian chartered banks have in essence recognized and embraced the franchise industry as a key borrowing segment it is very important to note that almost never to they finance franchises directly - even less so when it's not an ' asset heavy ' deal . So what our banks do is to carefully tailor some large national programs around the franchisors willingness to work with them in a worst case scenario - i.e. The financial failure of your business!
If you are fortunate enough to acquire a business that’s a part of a very large and successful respected chain you should be congratulated and might find some financing solace. If that is not the case one of the best possible solutions for your financing decision comes from an acronym. And that acronym? It's the
Whether you are borrowing from a specialty franchise lender (yes they do exist) or from a bank or commercial finance firm it’s important that the franchisee demonstrate reasonable personal financial history. That of course means that you can demonstrate that you have run your personal finances in a manner that reflects how you would run your franchise.
Lenders and even the franchisors themselves can easily verify your personal financials via credit bureau reports, statements of personal asset, etc.
Understanding the up front challenges of franchising loans will save you time, money and ultimately guarantee financing success. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business franchise 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 :
7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS FRANCHISE LOANS
CONTACT:
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
ABL Business Credit Line ? Why This Financing Facility Is The New Normal For Operating Lines
Is Your Operating Line Of Credit Search In Meltdown Mode? ABL Is The Solution
OVERVIEW – .Information on the ABL business credit line . Why does this financing facility solve operating facilities challenges for every size and type of firm
An ABL Business Credit Line.Is this type of financing facility the ' new normal ' when it comes to operating lines of credit in Canada. Well perhaps not for everyone, but it sure bears checking out when hundreds, probably thousands of other businesses are utilizing this type of borrowing already... and successfully.
The ABL (A = Asset B=Based L= Lending) facility is almost always compared to Canadian chartered bank lines of credit. And quite frankly, that’s ok! In actuality this type of comparison quickly brings out the major difference between these two types of operating credit solutions.
Why is that? Simply because the nature of chartered bank borrowing is rarely all ' asset based ', while that’s what the ABL is all about. Simple as that.
We suppose you can call it a philosophy of sorts, but the fact of the matter is our strong, great Canadian banks have industry regulations that forces them to focus on an all encompassing type of lending when it comes to business loans and credit facilities. Those other areas we're referring to include heavy emphasis on personal guarantees and credit history of business owners, cash flow coverage, external collateral, key operating ratio metrics, and covenants that some might view as restrictive. We're tired even just going through that list!
The majority of ABL lenders in Canada are in fact non banks. They are commercial finance companies focusing on 1 thing: Assets! They therefore have the ability to finance your business when a bank cannot.
Two key points need to be made here. One is that banks also offer ABL facilities - it’s just that they seem to be a bit poorly advertised in our humble opinion. Secondly all of a sudden the thousands of companies that weren’t eligible for Cdn. chartered bank financing all of a sudden are welcome applicants for an ABL financing facility! We suppose that we could add a third point that there is a cost differential in ABL facilities (typically higher, but not always, and sometimes lower!).
So if you company has the assets and sales growth, but not the equity or some of the other bank requirements we have touched on and identified then you are clearly a candidate for the ABL business credit line .
Although its often referred to , or thought of as a ' loan ' by the business owner or finance manger its actually simply a monetization of your current and fixed assets " a/r , inventory , equipment , real estate' if applicable .
We quickly point out that the ABL also has some other super powers! You can use it to acquire a company, stage a turnaround, or even come out of a restructuring, formal or otherwise. The higher borrowing base and ' margining power ' of such a financing allows you to bridge the gap between additional equity and simply waiting for your money from your client base.
So our bottom line today? Simply that you may strongly wish to consider maximizing borrowing power of your assets to facilitate your specific needs: growth, restructuring, inability to borrow at bank, etc. While the lower limit of such a facility is often 250k there are quite frankly no upper limits to ABL facilities in Canada. Oh yes, and some of our largest and most successful corporations utilize the method of financing - it’s just as we said, somewhat poorly advertised.
If your firm is in ‘ MELTDOWN MODE ‘ on business borrowing seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your operating facility needs , bank , or … ABL!
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 = ABL BUSINESS CREDIT LINE FINANCING
CONTACT:
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
Wednesday, May 8, 2013
Business Cash Flow . Are You ‘ Pro’ ? The Case For Working Capital Finance Solutions And Management
The Oldest Words In The World - Not Cash Flow .. But Perhaps ?
OVERVIEW – .Information on business cash flow and working capital finance management . It’s all about the new tools for cash flow financing and understanding cost and management of current assets
Business Cash Flow in Canada . It always seems to us like a bit of an understatement when you talk to clients about working capital finance solutions and their importance. Business owners and finance managers know the challenge of raising capital or monetizing existing assets... or both!
Naturally financing needs are diverse. It could be operational cash flow, replacing existing assets, etc.
Is there a SME drought of some type in Canadian business financing? The commercials , stories, and ads we see everyday seem to say not, but in talking to owners and managers finance often seems just a step away from crisis mode.
When it comes to cash flow and working capital resources it comes down to two basic issues - managing your assets and accessing traditional or alternative finance to meet your needs. Top experts tell us that surveys of business indicate that well over 50% of all businesses in the small to mid market sector in Canada, in all industries are either worried or concerned about their ability to finance operations.
While simple mismanagement of your business assets is one reason for that the other is simply your inability to collect promptly from late paying clients. In some cases your clients actually might be temporarily unable to pay! Our traditional lending institutions such as Canadian chartered banks are risk averse - that has made them very strong in global profiles, but has left Canadian business shall we say ' unfulfilled '!
Rather than wait for the government to step in resourceful business owners/mangers have simply gone out and accessed alternative financing to meet their cash flow fluctuation needs. Thos sources include:
A/R Finance
Asset Based Non Bank Lines Of Credit
PO / Supply Chain finance
Sale Leaseback strategies
Securitization or monetizing contracts
Inventory Finance
Invoice (A/R Finance) is probably the most popular method of addressing the working capital challenge.
While owners and managers are justifiably concerned about the cost of financing they sometimes forget that how you manage your assets can significantly decrease your overall financing cost. And while some ' alternative ' finance solutions are viewed as too expensive there are numerous ways to offset costs of any financing you undertake.
Don't forget also there’s a huge difference between taking on new long term debt versus monetizing assets for cash flow. Let's utilize a quick example:
Consider a firm who borrows 100,000.00 as a term loan over 5 years, putting new debt on the balance sheet. Interest on that debt might easily be 15,000.00 over a 5 year term, even at excellent rates. Consider the business owner who monetizes 100k of A/R for a 30 day period. Cost is approx 2000$, and new sales creates profits over and over again as sales are generated and assets turned.
Don't underestimate the need for business cash flow and the power your firm has when it’s utilized properly. While ‘ cash flow ‘ may not be the oldest word or term in the world we cant underestimate its importance to business survival .
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your business cash 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 :
7 PARK AVENUE FINANCIAL = BUSINESS CASH FLOW AND WORKING CAPITAL 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
Tuesday, May 7, 2013
Equipment Finance Canada. Finance Success Via A Leasing Company . Up Up And Away With Asset Finance Smarts
There’s No Real Dark Side When It Comes To Asset Finance !
OVERVIEW – Information on equipment finance solutions in Canada . What does the business manager need to know and look out for when selecting the right leasing company for asset finance needs
Equipment finance in Canada . It's probably just us but there is no real ' dark side ' when it comes to using this method of financing assets. So what do you need to know about the ' right ' leasing company, along with other key aspects of lease finance? Let's dig in.
There are of course a couple of methods to utilize when financing business assets. They might include a bank term loan, a bridge loan of a temporary nature, and even a spin on currently owned assets, i.e. the ‘sale leaseback '.
Every method works, but there are a number of reasons that top experts tell us that 80% of all North American firms (hey isn’t that Canada also?!) utilize lease finance.
Can the business owner and financial manager fast track equipment financing success? We think so, and it comes down to understanding who the players are, what the offering is, and what the upside and downside benefits and risks are.
Risks? While we can say that the downside risk of lease financing is small, it becomes only apparent due to a lack of misinformation by your firm, the lessee. If you enter into the wrong type of lease (there are only two choices - capital and operating) you run the risk of losing money on the final residual value of the asset. Also, if you weren't ' tending your store ‘properly and didn’t attend to the maintenance and insurance issues that come with any lease obligation that could also pose a problem.
Other risks? Well they might include improper tax and accounting treatment on your financials, or worse, losing out on the benefits that do in fact come with accounting and taxation issues as they relate to lease finance. One final point - non payment results in asset repossession - surely that one was obvious!
So, while some of those above referenced issues could be deemed ' the dark side ' the reality is that it should be obvious to Canadian business that a leasing company can provide a strong springboard to business success - i.e. it’s our ‘up up and away '!
You need to know how leasing works and that essentially comes down to understanding common lease structures and ensuring they make economical sense to you , in terms of both cash flow and the life and usefulness of the asset . To us it’s a bit unfortunate that owners/managers continually focus on interest rates only when they are searching for lease solutions. While that is an important part of the equation they forget that the documentation, their obligations, who they are dealing with, and end of term flexibility is key to asset finance success.
Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in meeting equipment finance needs via expertise that makes this method of financing a winning solution.
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 :
7 PARK AVENUE FINANCIAL = EQUIPMENT FINANCE
Stan Prokop