Business Bank Credit . Understanding The Financing Habitat Of The Rare Great Commercial Banker In Canada

Commercial Bank Financing Seem More Like A Roller Derby Challenge ?

OVERVIEW – Information on bank business credit in Canada . Understanding what the Canadian commercial banker offers and requires is key to business financing success



Bank business credit in Canada. Our clients are very much forgiven for sometimes feeling that obtaining commercial bank financing in Canada is more akin to working there way through a roller derby tournament - high levels of navigation required at all times.

Key to understanding your ability to access and receive commercial bank financing is understanding the habits of that rare beast - the Canadian commercial banker. We say rare because we're talking about the good ones! Let's dig in.

Although it should not, in our opinion, necessarily be the case the hard reality is that most Canadian business owners and financial managers feel our Canadian banks are the ' go to ' when it comes to debt or operating capital finance. (They often forget, or worse, don't know, that those same solutions are offered in abundance by commercial finance companies, lease companies, and non bank asset based credit line lenders.)

The business owner/ financial manager can be forgiven though, because when bank financing is accessible by your firm the financing is in great abundance, and every type of business financing needed can be on the table.

Bank offerings in Canada today, depending on who you are dealing with, offers -

Term loans
Lease Finance
Securitization
Equity Capital
Revolving credit lines
Trade Financing
Letters of Credit

Well, you get the picture. The key aspect that needs to be realized is that banks are at their essence cash flow lenders, so a great deal of emphasis is placed on analysis of your historical, current, and projected cash flow. Each bank might look at this a little differently (but not that differently) and at the back stop of that analysis is your ability to offer secondary corporate and or personal) collateral and guarantees.

We have always been of the opinion that there is a general similarity to commercial bank lending and competition. The difference, again, in our opinion, is the quality of your commercial banker. He or she operates in a very regulated and bureaucratic environment - so finding the commercial banker that is genuinely interested in your business and its growth is key, because, unlike in the U.S. , banks are highly regulated they are somewhat predictable in their behavior and offering Therefore the amount of capital they can lend, the rates, and margins on loan to value lending are not that dissimilar.

Many clients find themselves at some point in time being ' out of favor' with the bank. This might also mean they are segregated into a ' special loans' portfolio. At this point it's often time to consider non bank solutions, especially if your assets and growth potential are still there.

In general, start up companies in Canada can not, we repeat, cannot access commercial bank financing. The absence of our aforementioned cash flow coverage, collateral, and predictability of financing performance isn’t there. Don't count on your bank to properly finance a start up - but do consider non bank commercial financing sources.

Just knowing a couple of basic ratio qualifiers will help you often to understand your chances of success with bank business credit. Cash flow coverage should be greater than 1:1, and debt to equity rarely can exceed 2 or 3 to 1, respectively.

While commercial bank business credit in Canada is the lowest cost for pretty well every type of finance you need your challenge understands the criteria and probability of success. And finding a great banker is key - its alwasys back to the people component.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your bank, and non bank commercial 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 :

http://www.7parkavenuefinancial.com/bank-business-credit-canada.html





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

Cash Flow Finance . Time To Investigate The Merchants Of Working Capital Financing

Cash Flow Financing Won’t Make You Skinny .. But It Will ..


OVERVIEW – Information on cash flow finance solutions in Canada . Who offers working capital financing and what happens when your firm doesn’t have it!




Cash flow finance solutions in Canada. Just this week one of the world’s largest retailers made the news almost everyday with rumors rife around their ability to generate, or access... working capital financing to run their business. The result? Suppliers panicking, competitors cheering, and board members running for the hills.

How can you ensure your business is never going to be in that position? Part of the story is knowing what the problem is and recognizing it. The other half of the solution, we think, is knowing who the real ' merchants of working capital and cash flow ' are in Canada. Let's dig in!

Cash flow shortages mean different things to different businesses. In some cases it might mean the inability to replace much needed assets or technology. (By the way lease financing can easily help to address that one). Most business owners in the small and medium (SME) sector in Canada thankfully many times equate cash flow to profits. While incorrect, that’s not a bad thing, we assure you.

The trick to knowing and understanding key cash flow shortage issues is really to track your company's progress on this issue over time. Where many owners and financial managers ' botch ' or misunderstand the process is when they get mixed up in what the financial techies call ' quality of earnings ‘. That’s really about ensuring you have good asset turnover as well as profits. When assets are incorrectly managed you essentially get poorer because the cash you need is tied up in inventories, receivables, and equipment.

Naturally cash flow in your business goes up and down every day, almost every minute. But over time a sense of what's really happening is often easy to spot. There are good reasons why cash flow might be temporarily negative, as in investing in new deals, equipment, technology, etc to maintain your competitive position. Just make sure its' TEMPORARY'!

We've referred several times over the years to the W.T. GRANT story. That company changed the way the entire financial world looked at cash flow and profits in the same snapshot. It's an incredible story - to the outside world the company was doing great- internally inventories built up, receivables were uncollected, and finally outside financing from our ' MERCHANTS OF WORKING CAPITAL ' was inaccessible. Your know the result of course. Bankruptcy, with analysts all around the world suddenly trying to figure out what happened.

So who then is the mysterious CASH FLOW AND MERCHANTS OR WORKING CAPITAL in Canada? They include:

Receivable financing

Inventory financing

Asset based lenders

Equipment lessors

Tax credit financiers

Securitization

And lest we forget, Canadian chartered banks.


It is correct that cash flow financing won't make you skinny, but it will allow you to grow your company, survive, beat your competitors, and generate real profits. Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in your cash flow finance needs. Don't be front page business news in the worst way.



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 FINANCE 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

Equipment Leasing Canada. Reverse The ‘ It’s Not Working ‘ Feeling With Proper Finance Lease Solutions

Warning Signs You’re In An Unhappy Relationship ( That’s Equipment Financing Relationship By The Way !)

OVERVIEW – Information on equipment leasing in Canada . Finance fixed assets successfully via a finance lease, bridge loan, or a sale leaseback transaction





Equipment leasing in Canada. Is it safe for us to assume you're potentially feeling you're in an ' unhappy relationship ' with this method of financing business assets? The finance lease and related financial solutions are a tremendous way to grow your business properly, if you are in fact in a ' good relationship ‘. Let's dig in.

What then would some of those warning signs be that your asset financing relationship currently isn’t working? Some of them might be as follows -

You don't understand what works and what doesn't

Everything seems a little to complex sometimes

You're not coping successfully with tax/ accounting/credit issues

You don't know what the other party is in fact offering when it comes to choices

You're seeking approval but don't know how to get it



Let's address some of those issues, in effect mending that relationship that your firm is striving to be successful in.


When it comes to choosing a finance lease the business owner / financial manager needs to assess which type of transaction best suits the asset that your are acquiring . That might be a lease to own type solution, or alternatively an operating lease, in effect a ' lease to use '. Under that operating lease you have a tremendous amount of flexibility when it comes to returning the asset, upgrading it, and lowering the overall cost given the asset reverts back to the lessor if you so choose .

While finance and operating leases are the mainstay of business asset financing remember also that you can choose a sale leaseback scenario on assets you already own, bringing in valuable working capital when you need it. Also assets already owned can also be structured under a non - lease transaction, aka a ' bridge loan '.

While it's important to understand the tax and accounting and credit implications of equipment leasing in Canada one also has to remember that you've got tremendous resources to assist you - that could be your accountant, a lawyer, or business advisor, depending on the complexity of the lease .

Approval for a finance lease transaction has never been quicker than in these modern times. Electronic credit reports allow you and your lessor to exchange key financial documentation needed for approval almost instantly, and credit approvals for your transaction can often take place in a day. Larger transactions might involve meetings with your lessor, or negotiations around rate, terms, and structure.




Our bottom line? Simply that an investment in understanding the how equipment lease finance works and how it can benefit your firm will surely mend that strained relationship you're feeling when it comes to acquiring assets for your firm.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your finance lease 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 Equipment Leasing Expertise And 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

Business Funding Seem Like Molasses Speed ? Let AR Financing Via Receivable Funding Reverse Your Cash Flood Positively

Not Happy With Business Financing Choices? That’s Predictable




OVERVIEW – Information on account receivable business funding in Canada . How does A/R financing work , and when could it be appropriate for your company . What is the best method of utilizing this financing tool




Business funding in Canada. Who is surprised whenever we read a large percentage of Canadian business owners and financial managers are not happy with their financing choices. And when it comes to the speed at which they can access working capital , let's just say it seems like Boston, 1919 all over again. (A major flood of molasses swept through the streets of Boston worse than a Tsunami - we're not kidding, check it out!)

Could AR financing via account receivable finance reverse your cash flow fortunes? We know it does for thousands of firms just like yours and here's how and why. Let's dig in.

There is no greater form of quick financing today that AR financing. It's valuable, easy to achieve, and has many similarities (and some differences) to the traditional bank line of credit. Because on balance this method of financing your sales is more expensive than bank finance companies that tend to utilize it don’t have the balance sheets, profits, and outside collateral needed to access Canadian chartered bank financing.

Many companies that have vendors / suppliers that offer payment terms take advantage of AR financing to take those discounts for prompt payment that are offered. As you can imagine, this offsets a huge part of the cost of account receivable finance.

There's always a debate in business as to whether ' size' is important. The reality around A/R financing is that it allows you to take on sales opportunities and new contracts etc that are much larger in nature that could otherwise not be considered. Bottom line on that one - A/R finance has made your firm a player! That's because there is no upper limit, per se on the financing you can achieve via this method of sales finance.

When does this method of financing not work? That’s the question clients ask us when we're walking them through the process. The answer? If your firm doesn't have some respectable gross margins and your sales are going down not up... well let's just say this method is no longer optimal. The perfect A/R finance client in Canada has good sales opportunities, is pricing their products and services properly, and understands the cost of this method of growth financing is easily offset by good asset turnover and strong sales growth leading to more profits.

Where business funding via account receivable finance falls apart is when the Canadian business owner or financial manager fails to understand some key terms and falls head first into a facility that doesn't make sense for their firm. So it's our job we suppose to warn of those dangers.

Looking for an optimal way to achieve the benefits of this method of financing your sales? Our recommendation is to consider CONFIDENTIAL A/R FINANCING. When properly structured it allows you to bill and collect your own receivables, finance them when YOU want, and still reap the benefits of same day cash flow on sales generation.

Is AR Financing for your firm? Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with your cash flow needs and clarifying the process around this valuable method of working capital finance.




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 = Account Receivable Business Funding Solution 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

Commercial Lending In Canada. Discomfort With Bank Financing. The Asset Lender Is Your Alternative

Non Bank Financing Is Not Near Mythical ! Here’s Why


OVERVIEW – Information on commercial lending alternatives in Canada. What role does the asset lender play in Canadian business financing






Commercial lending by banks in Canada is not the only way in which Canadian business finances itself. When we talk to clients about non bank solutions there sometimes exists a certain level of ' discomfort'.

Where it comes from we don't know, as thousands of firms in Canada are financing by non bank methods. That’s the role of what we call the ' Asset lender ' - who comes in all shapes and sizes! Let's dig in.

Generally speaking asset based lending is simply a broad term for non bank commercial finance firms that provide a variety of business lending solutions to the Canadian business owner/manager. These companies have carved out their own ' niche' when it comes to specialty lending in areas of equipment, current assets, tax credits, etc.

Why then are commercial asset lenders successful in Canada, and growing in size and scope of solution? The reality is that they aren't regulated like the Canadian banking system requires of our banks. So like your teenagers they (try to) do what they want! And pretty well all of them do that well.


Commercial lending solutions for the asset lender come in a variety of solutions - they include term loans, leases, and asset monetization for working capital and cash flow. The loans are almost always focused on... you guessed it... assets! Asset based financing often has less of a regard for the overall credit quality of your company or its past or current situation - however don't think that because your company is in a death spiral you will still qualify . The patient must show signs of life!

Certain types of asset finance focus on particular industries. Non bank asset based lines of credit offer revolving credit facilities for al most every type of company in Canada that can offer up some for of collateral in inventory, receivables, fixed assets, tax credits, etc.

Many solutions offered by the ' ABL' (ASSET BASED LENDING) lender can be of a ' hybrid ' nature- financing different assets of your firm in a similar manner, all under the same credit facility.

Many Canadian business owners and financial managers in Canada seek asset finance solutions because they are an alternative to equity financing. In certain larger transactions an asset or mezzanine lender might in fact though ask for a small equity ownership or option in your firm - but this is generally very rare. The appeal of asset lenders is that as your business and assets grow so does your financing capability with your chosen lender.

We mentioned previously here that if your firm is in a death spiral your hopes should not be high for asset financing success. But if you are in legitimate turnaround mode you are absolutely a candidate for this financing which otherwise could not be achieved through a bank.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in structuring an asset lender solutions that meets your needs when it come to commercial lending 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 = Asset 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

Management Buyout Financing Needed. Here’s Some James Bond Like Advice On Canadian Mgmt Buy Out Strategies

Are You Ready To Ace Buyout Financing ?



OVERVIEW – Information on successful management buyout strategies . How does the mgmt buy out work best?


Management Buyout . It's been going on for a very long time in business. In effect you are acquiring the company for which you are a current employee or perhaps minority owner.

How then does this financing technique work and how you make a Mgmt buy out seem like a deft James Bond maneuver? Let's dig in.


Managers and partial owners consider the strategy for a wide variety of reasons. Practically speaking managers and current partial owners know the company, and its potential, referring mostly of course to the financial potential of future profits. Current owners often want to see the legacy of their company continue, as well as addressing employee issues and needs.

Numerous financing vehicles are available to properly execute a buyout. They include debt options, external private equity , as well as monetizing the assets of the company to a degree that still allows it to remain hopefully profitable , cash flow positive and without an onerous debt load.

We're mostly talking here about private transactions. Publicly listed companies can of course be acquired in much the same manner - but that’s a different kettle of fish for another day.

There are some solid tax advantages for a management buy out, and obviously the appeal to the current owners is that they have finally reached the ' liquidity event ' they had envisioned. While private equity firms and low interest rate environments dominate a lot of transactions it’s really the strong growth or turnaround prospects that drive a lot of ' MBO ' (management buyout) deals in Canada. And when you have good managers and new committed owners all sorts of great financial results are possible.

Great financial results happen when you have a proper mix of debt and equity in the final transaction. It's really the same concept as a home mortgage, where we as home owner’s manager our personal financial situation properly when our homes have the right amount of equity as well as the right debt / interest rate on our homes.

Debt however is the proverbial two edged sword.

Using other peoples money has a lot of upside, as well as... you guessed it, downside! When using a lot of debt to finance a transaction the risk of default on a deal rises significantly. . However, with properly structured debt owners can realize the benefits of downsizing, cutting costs, investment in new fixed assets, etc.

Management buyouts can be financed by non bank asset based lending facilities, Canadian chartered bank term loans and revolving credits, and even unsecured debt in the form of mezzanine and sub debt cash flow loans. Small transactions in Canada can even be fully financing via the SBL Govt business loan.

All of the above financing vehicles have different levels of risk and structure. It goes hopefully without saying (we’ll say it anyway!) that a part of your transaction must include your own owner equity component... Deals on Mgmt buy outs can be simple or complex - depending more often than not on the size of the deal. Key issues include secured assets, repayment terms, equity components, and cash flow coverage.

Don't forget also that often the current owner’s willingness to help finance the buyout via a partial vendor take back ' VTB' can often make a deal happen more quickly and successfully.

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in developing a management buy out strategy that reaps advantages and minimizes risk to all parties.




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 = MANAGEMENT BUYOUT FINANCING 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

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