Canadian Business Credit And Finance Solutions And Alternatives

Business Financing Challenges Giving Your Sleep Deprivation?







OVERVIEW – Information on canadian business finance alternatives . Credit solutions come in both traditional and alternative vehicles





Business finance in Canada. We recently (yesterday) read that 73% of all businesses in the U.S. were generally ' optimistic ‘about their business and the economy. These types of articles often mirror the Canadian situation. When it comes to us though it seems we're more often than not meeting the other 27% , who are somewhat less optimistic and , in the case of our article, find themselves in ' stall '

mode when it comes to access to traditional lending solutions.


The irony though is that the demand for financing seems there all the time when it comes to businesses in the SME sector, and alternatives to any sort of traditional lending are being more and more welcomed by Canadian business. As we have often said to clients ' alternative is the new traditional'.

In that same article it indicated 36% of all businesses applying for some for of financing in fact were declined by the banking system. The harsh reality in Canada is that if you are unable to meet fairly straight forward requirements of our banks (profits, clean balance sheets, outside collateral, etc) you are often not in a position to get any or all of the financing you need to grow revenues.

And talk about being negative, but 2/3 of business owners who didn’t bother to apply for financing behaved that way simply because they were sure they were going to get declined!

The majority of businesses that try to access debt or working capital do so for the right reason, they wish to grow their business, expand facilities or upgrade assets either technological in nature or in the shop/plant. As they are successful in doing that they traditionally then have more working capital and cash flow needs.

So if you the Canadian business owner of financial manager are looking to grow sales and access forms of capital what then are the options?

In Canada they include:

Receivable financing

Equipment financing / sale leasebacks

Working capital and cash flow loans - Secured and Unsecured

Non bank asset based lines of credit

SR&ED tax credit financing

Securitization

Purchase order/ Contract financing


Being successful in any aspect of business finance includes the following -

Knowing the type and amount of financing you require

Being able to predict and assess your real cash flow

Understanding the benefits, risks, and implications of any type of access to capital that you're considering

There is no one specific ' how to ' when it comes to the various complexities of growing your business when it comes to choosing the right financial solution at the right time. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in navigating the frothy seas of cash flow, debt, and working capital finance in Canada.



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 FINANCE ALTERNATIVES





























Stan Prokop

Credit Line For Business ? Actually You Have 2 Choices – Bank Or ABL

An Update From The Holy Cow Department On Business Credit Choices

OVERVIEW – Information on the credit line for business. Two alternatives exist for revolving credit , bank line or ABL asset based lines of credit . Here’s the differences



A Credit Line for Business . Occasionally a client will say to us ' Holy Cow ' I didn’t know that! It turns out ' that ' refers to the fact that it turns out a number of business owners/ financial managers don't know they have two choices in revolving credit facilities for their daily operations. One is the Canadian chartered bank solution; the other is the Asset Based Credit solution, known simply by the term ' ABL'. Let's dig in.

Canadian businesses use credit lines for working capital and cash flow. This types of borrowing in effect funds your ' current assets ', typically A/R and inventory. Because no business in Canada runs on a straight line when it comes to the ups and downs of sales, collections, etc credit lines address those ' bulges' in our businesses.

Two solutions, as we have noted becomes your ' choice' for the business credit line. The first is the Canadian chartered bank, the other is a non bank commercial financing facility known as ' asset based credit ‘.

How do these facilities compare in price, which most clients focus in on immediately? The reality - if your company is established, growing, has profits and a clean balance sheet and is of a decent size the costs of these two facilities are in effect ' neck in neck '. At this point everyone wants your banking business and you're in charge of who gets it. Not a bad situation to be in.

Unfortunately we very rarely meet clients in the Canadian business financing landscape that have the ability to be 'driving the bus'

when it comes to addressing financing needs. Of course large private corporations, public companies and subsidiaries of multi nationals have the option to demand the most facilities at the lowest cost. It just turns out that in Canada that seems to only cover 5% of the companies who need financing.

Because of that ' size' breakdown ABL asset based credit facilities tend to cost more. The reason couldn’t be simpler - it’s that the commercial finance firms offering this credit are in fact borrowing from banks... to lend to your firm!

While any business can theoretically ( key word = theoretically '!) obtain a bank business credit line, secured or unsecured , the ABL credit line typically works best for facilities in excess of at least 250k . Upper limits can of course range into the millions and tens of millions.

One key point in the choosing of which facility makes sense for your firm is the fact that ABL facilities tend to, 99.9% of the time, create more borrowing power for your firm. Simply speaking receivables and inventory are margined higher, and you have the ability to throw your fixed assets into the mix, borrowing against their value when you need it.

When your firm is banked by a Canadian chartered bank a strong element of trust exists between your company and the bank. You’ve passed with flying colors the key requisites of a good commercial bank facility - profits, clean financials, good cash flow, and the ability to meet ratios and covenants required by our regulated bank system in Canada.

Many clients for whom we originate bank financing simply have to report annually, or in some cases monthly on their borrowing needs and financial results. The ABL lender is more generous, and, no surprise, more cautious.

So while your borrowing ability increases you tend to be reporting more often on asset values of your firm. In our experience this just makes your firm a better ' manager of assets ' so that's hardly a bad thing.

If you're uncertain about which business credit line works for your company seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with a credit line for business that makes sense for your company's borrowing 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 Credit Line 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

Vendor Finance In Canada . Can A Customer Financing Program Take Your Company Behind Frenemy Lines

You Didn’t Know Why Customer Financing Programs Work?


Vendor Finance In Canada . Can A Customer Financing Program Take Your Company Behind Frenemy Lines




Vendor finance in Canada. It's of course the financial term for providing or assisting your customers with a financing program that allows them to purchase your products and services without many concerns arising such as budgets, total overall cost, cash flow depletion , etc. It's our version of taking you ' BEHIND FRENEMY LINES ', as those issues can make our break your sales goals and competitive success. Let's dig in.

We are always reminding our clients that in order to provide effective customer financing you need not be a finance firm yourself. You just need to align yourself with a partner that will do all the work for your firm, and that's not a bad thing. In reality this method of customer financing exists everyday.

Major retailers use credit card and finance companies to allow you to charge their product, car makers practically invented the model with the low down payment and fixed cost obligation of acquiring a car instead of writing a cheque for one. So why shouldn't your firm be the one participating in all this sales and revenue success?

One of the key basics of a client finance program is that it takes your clients mind off the ball - and that ball is of course PRICE/COST of your products or services. You're often no longer debating clients on margins, total acquisition costs, etc - you're instead offering them with a simple method of acquisition that removes some of that OBSTACLES TO INNOVATION we mentioned - i.e. Sticker shock of total of cost, price, budget timing, cash flow, etc.

Very few firms in Canada have the combination of financial wherewithal and skills to start their own internal client finance program. The capital and skill required in this industry make it a business for specialists only. So while your firm could benefit from increased profits of financing your products the technical expertise, management focus, etc required to run this business make it one for no participation from lightweights! Bottom line, leaves it to the experts, but still reap all the benefits of increased sales, profits and cash flow.

A client financing program simply allows your sales team to close transactions quickly and remove client objections when it comes to price, timing of delivery, competitor issues, etc. If your competitors already offer customer financing you're behind the 8 ball

already and didn't even know it - if they don't you're suddenly the front runner!

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in offering a client finance solution that meets your sales 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 = CUSTOMER FINANCING PROGRAM 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

Receivable Funding In Canada . High Noon Issues In Business Financing For A/R

One Of The Greatest Business Financing Inventions ?

OVERVIEW – .Information on receivable funding and A/R management in Canada. Business financing works when you’ve properly addressed this important current asset of your business




Receivable funding in Canada. While A/R business financing may perhaps not be the all time greatest invention ever in business in certain ranks up there. But when it comes to the finance of receivables, or even just its management, are there some ' HIGH NOON '

issues you need to both know and keep top of mind. We think so, let's dig in!

The essence of A/R finance couldn’t be simpler. It's simply a bridge to allow you to receive cash/working capital prior to payment from clients. The world of accounting allows you to classify this as a ' current asset ' , which simply means you have to collect it within a year, which, unfortunately is the same timeframe that your clients seem hell bent on paying you in!!


When you're financing your accounts one of the key factors to keep in mind in discussions with your banker or your commercial finance firm is the idea of revenue recognition. You need to remember that you must be able to clearly demonstrate that the product or service you have delivered is in fact ' recognized' and that there is an assurance that the customer has an obligation to pay you. So selling on consignment or on a contract type basis with milestone payments presents real problems when it comes to financing your accounts.

We do work with many businesses who do in fact sell on a ' contract ' type basis, and we would add that if the milestones are clearly defined. And that you've delivered on your commitment to the client, you are still in a position
to finance AR.

Receivable financing fast become one of the most popular methods of business finance. Using a 10k invoice as an example the Canadian business owner / manager receives approx 9.8k immediately on invoicing, with the 200 dollars considered a discounting or carrying charge. It's as simple as that if you're dealing with the right party.

Whether you finance your A/R or you don’t the issues of cash discounts is an important one. They are not a reduction of your price offered to your clients; they are simply an incentive for the client to pay you earlier. If you are financing your A/R a huge amount, if not all of the cost of financing your business can be reduced by using cash flow from AR financing to take discounts with your own key suppliers.

Understandably, (because it’s a cruel world)

many of your clients will try and take as long to pay as possible. Major corporations in Canada use their size and buying power clout to their advantage by paying smaller firms in either 60 to 90 days. That enhances their own cash flow in a big way. The financing of your A/R via a bank facility, or a commercial invoice discounting facility allows you to fight that battle, and if you have priced your products and service with that delay in mind you'll be a strong competitor in your marketplace and industry.

These then are some key issues that affect your management and financing of A/R. There are others which we will cover off in the future, but seek the advice and services of a trusted, credible and experienced Canadian business financing advisor who can assist you with your business funding needs. You’ll then be a formidable competitor when HIGH NOON rolls around.





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 Receivable Funding Expertise



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 To Get Government Loans In Canada . The Small Business Loan Demystified

What’s So Top Secret About Gov’t Business Loans ?


OVERVIEW – Information on government loans in Canada . How does the business owner and entrepreneur secure a Small Business Loan – aka the ‘ SBL’



Government Loans in Canada? The Canada Small Business loan program is an ongoing major initiative by the Canadian Federal government to provide capital financing to new and existing businesses that meet the criteria of the program.


The program is very popular in Canada, primarily because it a business loan that the business owner may not have been able to achieve elsewhere.


Many business owners and financial managers either aren't aware of the program, or, as is more often the case, don't understand the requirements of the program and how to ensure a proper approval in a timely manner. Naturally, rightfully or wrongfully so, there exists a perception that any government type funding program is extremely paperwork and administratively burdening to the business.


There are several key basics that allow a business to ensure that they are in fact qualified to pursue the program. Those basics are as follows:



1. The company must be a private corporation - public firms are not eligible


2. The company must be under 5 Million dollars in revenue


3. The loan must ' flow through' a registered administrator of the program - In Canada this is typically a chartered bank - this is one of the key perceptions of the program, in that the banks ' administer ' the program, but they don't own it


4. Only three major asset classes are covered under financing in the program - they are as follows: Equipment, Leaseholds, and Real Estate

The government, as we have shown, doesn't lend the funds, but it guarantees the funds to the bank


Almost every type of business in Canada can qualify for the loan program.The challenge of course, as always, is ' How does my firm get approved?!'

If a business owner or manager feels they are not capable of providing a proper submission to the bank it is highly recommended that they used the services of a trusted financing advisor or intermediary.


We cannot overemphasis that the key to dealing with the government and the bank is that it is critically important to have all the necessary paperwork in a properly submitted and, hopefully, professional package.


What does that ' paperwork ' include? Companies should ensure the package reflects the current financial position of the company, ( START UPS WELCOME !) a proper business plan and or executive summary, and miscellaneous personal data surrounding the bank and government requirements - i.e. statement of net worth, proof of no tax arrears, etc.


Most importantly is the need to position a proper purpose of the loan re dollars, timing, use of funds, etc


Most business owners don't realize the true benefit of doing everything once, the right way! In lending and loan approval that is important. You can re- submit and renegotiate, but that is not an optimal strategy for business financing success.


In summary, the bottom line is ' do it once, right '. Looking for expertise and assistance? Seek a trusted, credible and experienced business financing advisor with credentials in this area.




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 = Government Small Business Loan 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

Working Capital And Term Loans In Canada. Which Cash Flow Solutions Guarantee Happiness And Success ( In Your Company)

Long For The Golden Age Of Financing Choices?


OVERVIEW – Information on cash flow solutions for Canadian business. What are key differences between term loans and working capital options




Term Loans . Cash Flow Solutions for working capital . Business owners and financials managers focus on working capital whilst sometimes not determining whether the business financing solution is a longer term focus.

We first need to point out the differences between a business term loan and a receivable financing / working capital type financing solution.

Business loans of a term loan nature tend to be fixed payments. They will bring what we will call permanent working capital into your business. The nature of these loans is that they tend to be 'fixed' in term, payments, and rates. Your business can acquire a working capital business loan in a couple of different ways. The transaction can be facilitated purely on a 'cash flow 'basis. If the lender feels your firm has the cash flow to support the loan a loan will be created around that belief. Your historical and current financial statements (as well as your projections) should validate that your cash flow can meet the payment requirements of the loan.

The cash flow term loan can also be achieved in two other ways; it can be structured around what is known as a mezzanine or subordinated debt basis, or via a sale and leaseback of your assets or real estate. Some business owners feel it feasible to consider a 2nd commercial mortgage on their property, as an alternative to not having to sell the real estate to bring cash back into the firm.


We've covered the term loans portion of a cash injection into your firm. Another popular alternative is a 'factoring ( aka ' A/R FINANCE' ) solution'. This solution is becoming increasing popular in Canada. We point out that the factoring solution should generally be viewed as an interim solution - our experience is that a firm factors their receivables for a year or so prior to regaining a traditional financing status with the bank for a true margined operating line of credit.

To any Canadian business owner that currently factors their assets it is abundantly clear that the costs and processes are significantly more burdensome than a Canadian chartered bank facility - however, they do work, and they work for your firm now!, when you need it.


Canadian business considers Receivable Financing solutions when they have capital and debt ratio issues in their business. In many occasions the customer has a bank relationship and you need to simply augment that relationship with a factoring scenario for additional capital. The essence of this issue is that you are in fact 'maxed out 'at the bank, notwithstanding your good relationship with them.

Business owners quickly find out that banks have limits! Many people don't understand that a properly constructed factor/AR facility can compliment, and not necessarily replace a bank facility. You should seek the advice of a trusted, credible, and experienced financial advisor or intermediary in this regard. Our preferred solution for our clients is in fact a CONFIDENTIAL A/R FINANCING that allows you to bill and collect your own receivables, financing them only when you need to .

A/R Financing is a much better solution for new and start up businesses, and if your firm is not in a 'death spiral ',but simply experiencing temporary financial losses or one time set backs then factoring is a solid solution.
In summary, business loans for working capital are either fixed / term scenarios or working capital facilities based on current assets such as receivables and inventory. The


Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your options on the correct type of financing for your 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 = CASH FLOW , TERM LOAN AND WORKING CAPITAL FINANCE 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

Surviving A Bank Financing Approval For Business Credit In Canada . Working Capital And Term Loans Need To Make Sense For Your Firm

Looking For A Lifetime Warranty On Business Financing? There's No Guarantee of course but here's a good start

Information on business credit in Canada. Whether its term loans or working capital what information do you need to successfully access funding?





Business Credit and bank loans in Canada . When business owners and financial managers have successfully negotiated working capital facilities or term loans it should not be the end of the story – It needs to be credit and working capital that works for you, not just for the bank .

By that we mean that the business person needs to continually focus on what the bank or other financial institution requires, and more importantly, how they view the customer from a control point of view - i.e. are they in control or able to exert control on your business.


The balance sheet must be a top focus for the business owner - once a firm is over leveraged, i.e. borrowing too heavily, the bank generally starts positioning around their overall security or your ability to de-leverage.


Borrowers must be comfortable and knowledgeable about the use of 'triggers '.

Triggers are the implied actions the bank or institution will take when things aren't working out. This can include everything from general poor financial performance to very specific pre agreed upon financial ratios. And the business owner must remember that he or she agreed to and concurred with these ratios.


Banks want to see cash flow ' flowing ' - flowing to repay their debt - so there many be triggers put in place by the bank to ensure that minimum cash flow standards are kept, and also that owners and shareholders do not withdraw excess funds.

Over time business owners will probably find, in our experience, that the bank restrictions either tighten up or loosen, depending of course on the overall comfort level the bank has with the firm. Clearly firms that seem temporarily challenged in profits and balance sheet quality will receive much more scrutiny.


Business owners can do some very solid and valuable preparatory work in negotiation of bank triggers. If they have a solid long term history of earnings this should be a very strong negotiating point with the institution. Simply by self introspection of the firm can the owner or financial manager focus on what is going to go wrong re sales, pricing, forex, etc. The owner needs to be able to talk to these issues and show how he could address them.


For a start calculate your own key operating ratios, if they are going to be discussion points with your bank or institution you might as well know your numbers now. Using 'what if 'scenarios help immensely and will position yourself as knowledgeable about your business.


Discussions with your bank need not be absolute and immediate on any time of loan negotiation - you can get a great informal sense of what the bank is thinking and work from that point forward. Try and read between the lines as to what is hot, and what a Vis is not with the bank vis a vis their perception of your firm, industry, etc.

In summary, business owners need to show maximum flexibility on working capital and loan negotiations.

Negotiations should be from strength, accentuating the positive. Example - strong forecast sales and profits and potentially offset a weaker balance sheet. Trade-offs with the bank is also encouraged- and fewer triggers and covenants are better than more!


And yes, there is more than one bank in the world, although business owners should be cautioned that shopping around is not optimal at all times, and can in fact backfire, particularly a small business. Business owner beware!

Seek out and speak to a trusted credible and experienced Canadian business financing advisor for optimal solutions to bank credit and business capital in Canada .



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 Credit And Loan Expertise




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