Alternative Business Financing In Canada : The Art Of Loan Alternatives

Capable Of Changing Your Mind On Alternative Financing Techniques ?


Information on alternative business financing in Canada . What loan alternatives are available to Canadian business when traditional solutions can’t be accessed, aren’t enough , or don’t work

Loan alternatives in Canada come in a variety of forms in Canada. 'Alternative business financing ' is a term we've often thought a bit unusual on occasion, if only for the fact that commonly used business finance alternatives are in many cases tens of years old, and in some cases thousands ! For your firm to be successful in accessing the capital it needs it’s a question of an ‘art’ and a ' science '. Let's dig in.


Business lending in Canada took a major step back in the recession of 2008. Business owners and financial managers are told today that we're back to an abundance of capital - however it never seems to be for them!

It's tough enough to grow your business in a good economy let along one that doesn't provide the right loan alternatives. What then is traditional financing and what's alternative? ask our clients. The simple answer is that it’s financing solutions outside of Canadian chartered banks. The solutions provide do the same thing - they provide cash flow, capital, and loans, but rates, terms, structures, and day to day mechanics are often different.

Stats vary from country to country of course but top experts say that in many cases almost 25% of businesses that apply for bank credit are declined. Typical requests from the bank come in two categories - term loans and revolving credit facilities.

‘ASSET BASED FINANCE ' is the general category for putting together all the different solutions for asset and cash flow financing. These solutions include:

A/R Financing (Factoring) (Our recommendation for clients here is CONFIDENTIAL RECEIVABLE FINANCE

Inventory Financing

Tax Credit Finance

Asset based ABL lines of credit

Purchase Order Financing

Sale Leasebacks /Bridge Loans
Working Capital Term Loans / Mezzanine unsecured cash flow loans

Crowd funding/ Royalty finance techniques

Our first example, A/R non bank financing has only been around a thousand years or so... right around the time the Dead Sea was just only getting sick!

That's our tongue in cheek comment on why ' Alternative ' is in fact more common than most people think. This single alternative form of cash flow finance has a strong appeal to thousands of business owners/financial managers because it immediately ' cash flows ‘your sales. The trick is to pick the right facility at rates, terms and day to day mechanics that makes sense.

While there is no doubt that banks still provide in Canada the huge majority of ' Traditional ' financing the newer forms of capital access are in many cases complimentary to the bank - but essentially are often the real alternative when bank capital can't be accessed.

More and more accountants, lawyers and business peers are recommending loan alternatives outside the bank structure. This pool of capital is large and diverse. In our experience many key financial problems are in fact solved by non traditional finance - and some of the most successful companies in Canada and the world were in fact started by owners and managers who went looking outside the traditional landscape.

If you want to know how Canadian business financing has evolved, and how to navigate the seemingly ' maze ' of financial solutions
seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you to explore both the art and science of loan alternatives.




Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS FINANCING ALTERNATIVES EXPERTISE









Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Canada Small Business Financing Loans : Smart Strategies For Accessing The Government SBL Loan

SBL Gov’t ‘Small Business Loans ‘ Are Your Bridge To Somewhere

OVERVIEW – Information on government of Canada small business financing loans . This financing is very appropriate for start ups, franchising, buying a business , or for firms in the SME sector requiring equipment and leasehold capital

Canada Small Business Financing loans are government guaranteed loans that assist any Canadian business (including start ups and franchises) to acquire financing for equipment and leaseholds. For many owners/managers these loans, commonly called an ' SBL ' are a ' bridge ' to starting and or growing a company. Let's dig in.

If there is one negative aspect to accessing SBL capital it's the perception that many applicants have that the process is long and complicated. In fact that is not necessarily the case, but it certainly is if you are unprepared and don't know who to talk to and work with.

Personal guarantees are part of any business financing in the SME sector. However the Govt small business loan requires only a 25% personal guarantee, which is much more attractive to most entrepreneurs. The caveat here is that the guarantee you do provide on the loan must be backed up with a reasonable personal credit score and some personal equity commensurate with the amount you are borrowing. Here things like ' home ownership 'help out a lot.

The good news about the actual rates, structure, terms, and length (amortization) of the loan is that they are set by the government and are cast in stone, so to speak. So Canadian banks that offer the loan don't have any flexibility in raising rates or changing credit enhancements. That being said though it's our own experience that different banks have different attitudes toward the program, and it’s critical to find a banker that’s ' on side ' with this method of financing. (Sorry, we can't provide names to protect the innocent - but call us!)

As we have inferred Canadian chartered banks run/administer the program for Industry Canada. So contrary to the belief of some, there is never any direct involvement with the government - they are simply sponsors and guarantors of the program. Each year in Canada approx 8000 businesses apply and are approved under the program - which lends anywhere up to $500,000.00 for each loan.

While many businesses in the SME (small to medium enterprise) sector mistakenly focus on accessing capital from personal resources, friends and family, angels/VC's etc they more often than not find that there are significant negative aspects to those sources of capital. Canada small business financing government loans are often a more realistic fast track to capital.

When SBL loans arent feasible don’t forget that numerous other traditional and alternative financing vehicles are available to you - They include:

A/R financing

Inventory finance

Working capital term loans

Non bank asset based business lines of credit

SR&ED Tax credit financing

Equipment Leasing/ Sale Leasebacks/Bridge Loans

For ' smart ' strategies to the ' bridge to somewhere' as it relates to growing or starting a business seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with accessing the right capital at the right time.





Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN CANADA SMALL BUSINESS LOAN FINANCING EXPERTISE





Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '




















Stan Prokop

Financing Businesses In Canada : Don’t Be Out Of Step With Business Finance Funding

Past , Present & Future In Canadian Business Financing


OVERVIEW – Information on financing businesses in Canada . Business finance funding has evolved with numerous solutions in traditional and alternative financing . Knowing how to access capital saves time and cost

Financing businesses has evolved significantly in Canada. The past is clearly not representative of the future. Owners and financial managers who are not up to date with what’s available, and from whom, in access to capital, can easily be forgiven for being simply... out of step .

Let's dig in.

Business is often susceptible to ' disruption '

and the methods of financing Canadian companies are great examples of that. When we talk to clients about newer methods of financing there's often a feeling these methods are known only to the privileged few.

Today the owner/financial manager can easily access newer methods of financing. One top expert describes this current situation as ' open knowledge '.

Unfortunately many entrepreneurs / business owners dwell on Venture Capitalists and Canadian banks as key sources of following. Only a minute, and we're talking really minute amount of firms qualify for VC capital. The prospects of accessing true bank financing are much more positive, but still leaves thousands of companies 'unsatisfied' when it comes to all the business credit they need. The 2008 global recession totally hammered access to business credit.

Many start up businesses, as well as franchisees take advantage of Government assistance when it comes to financing. Over 8,000 businesses annually take advantage of the CSBF / BIL loan program which provides government guaranteed loans to the SME sector. (Note: Businesses with under 5 Million $ in actual or projected revenue can qualify.

Another note on government assistance is that federal and prov. govt's tend to be relaxing legislation around CROWDFUNDING. Technology has allowed thousands of people with capital to access your business deal if presented properly and on the right platform.

Seeking the right source of funding in Canada necessitates understanding options in debt and equity. We're huge proponents of asset monetization - many firms simply arent aware that they can cash flow existing assets.

Some examples of Asset and Revenue Monetization:

Sale Leasebacks

Bridge Loans

Tax Credit Financing

Royalty financing / Financing Software as a Service (‘SAS’)

Purchase Order/Contract Financing

Asset Based (‘ABL ' ) lines of credit (They lump A/R, inventory and equipment all into one borrowing facility)

Whether it's traditional or alternative financing there is no substitution for demonstrating you have good management and the ability to produce regular and proper financials.

Acquisition financing for mergers and acquisitions has never been more plentiful - with supposedly thousands of original owners seeking succession plan strategies and buyers for their long established businesses. Here valuation and due diligence are key.

While not all Business Financing in Canada has been timeless what remains constant knows what finance solutions meet your debt, cash flow, and growth criteria? Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can show you the path to business financing funding, via the who and how!



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS FINANCING EXPERTISE




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

7 Park Avenue Financial

South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Government Funding In Canada : Advice On Getting SBL Small Business Loans

Getting A Govt Small Business Loan ( ‘ SBL ‘ ) Doesn’t Have To Be A Science Experiment

OVERVIEW – Information on government funding in Canada via the ‘ SBL ‘ program . Small business loans are an attractive traditional financing alternative for financing assets and leaseholds for Canadian business owners /mgrs

Government funding in Canada comes in a couple different forms, primarily grants and loans. (Good luck with the grants). Many business owners and mgrs are not aware that small busines loans, commonly called the ' SBL ' are available. Let's dig in.

And by the way, achieving success in a Govt small business loan doesn't have to be like a science experiment gone bad - its not as complicated as you think.

The federal government, via Industry Canada, provides guaranteed loans for existing businesses and start ups. (Yes Dorothy - start up financing is available in Canada!). Why is the SBL loan attractive? Simply because it has rates, terms and structures that in some cases arent even available to larger successful corporations?

Can we explain that last comment? (Yes we can). Some of the key attractiveness of the program revolves around a limited personal guarantee (the majority of the loan is guaranteed by the govt) and the loan period can be anywhere up to 7years, with 5 years being a typical term. Repayment? It can be any at any time, and without penalty... even the big boys can't often achieve that one.

So where does the applicant get this type of financing? Things get even easier now, as it's available through any Canadian chartered bank - the key point being that you must have access or a relationship with a banker that is very familiar with the program and paperwork.

Paperwork? It's not as complicated as one might think, as government bureaucracy conjures up images of piles of paperwork

and untold delays. The truth? Simply that you only need a basic loan package consisting of a business plan, cash flow, info on yourself as the borrower, and some back up document such as a use of the proceeds, which is often demonstrated by quotes or invoices. For a proper loan package a transaction can be approved within a couple of days .

We can save you a lot of time by also advising you that if you don't have your personal finances and credit history in order you won't be approved for the program .That means income taxes up to date (no CRA arrears) and a reasonable credit history as evidenced by a typical business credit check. Technically speaking a credit bureau score of 650 tends to be the threshold of go/no go.

Amounts under the program are typically 350k max, although recent amendments to the program suggest higher amounts are available. And don't forget that the only two asset categories financed under the program are equipment and leaseholds. That includes technology also, and even software.

Seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success - avoid that science experiment gone wrong

by focusing on quick and positive success for government funding under Small Business Loans.



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN GOVERNMENT BUSINESS LOAN EXPERTISE




Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Business Loans Explained : Guaranteed Principles For Debt Financing Success

Unlocking Secrets To Your Business Loan Needs In Canada

OVERVIEW – Information on acquiring business loans in Canada . Debt financing done right requires this info

Business loans in Canada come with certain rules around debt financing when done. properly. Let's dig in.

For the most part debt is ' secured ' - either by assets or cash flow, or both. For companies with very strong predictable cash flow a company's promise to pay might be all that is required. That is a rarer occasion.
By the way ' unsecured' cash flow loans, also called ' Mezzanine ' almost always cost more being the lender is ultimately unsecured, relying solely on the delivery of the cash flow promise.

Business owners will often consider our Canadian chartered banks as the optimal solution - certainly it’s more often than not the ' go to '. However not all business owners and financial managers understand the bank requirements around secured term lending. On the other hand they also don't know there are alternatives.

From the banks perspective POSITIVE CASH FLOW is a must for debt financing of any time. Formula's that have been in use forever for CASH FLOW COVERAGE and DEBT TO EQUITY are the key drivers in commercial debt financing. Bank debt is typically ' senior debt ' and is often has the bank in ' first position' over all other lenders. Banks typically document this transaction under a loan agreement called a ' GSA ' - A general security agreement.

When we talk to clients about new debt financing options one of the issues that always must be dealt with is relationships with other creditors. On occasion this requires an unwinding of agreements between lenders, requiring additional time to complete the financing required.

Business loans can finance a variety of needs - these include working capital, fixed and capital assets, and even acquisitions.

The $64,000 question in debt financing is almost always ' how much '. Too much debt creates a highly leveraged company - Done right its great for ROI, done wrong... a recipe for business failure.

When accounting for debt on your balance sheet term loans will always be
broken down into current and long term. Current is the total of the loan that will become due in the next year. On the other hand revolving credit facilities simply... revolve... and and based on levels of inventory or acounts receivable, or both.

Debt is of course the alternative to equity - in the current low rate environment capital cost is low and payback can more easily be justified. The negatives relate to what we have already talked about:

Taking on two much debt

Potential business failure

Implications around personal guarantees

Payments are fixed - i.e. they must be made!

For the SME sector in Canada the Government of Canada Small Business Loan is a solid debt alternative that can be very attractive. Why? It has attractive rates, repayment without penalty, and a lesser Personal Guarantee implication.

For proper explanation around the right type of business loans for your business seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you with your debt financing needs.







Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :

7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS LOANS AND DEBT FINANCING EXPERTISE








Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '

Stan Prokop

Business Financing In Canada : Time To Break Up With Cash Flow Problems

3rd Down 110 To Go On Cash Flow Financing Strategies ?



OVERVIEW – Information on business financing and cash flow challenges and solutions in Canada . These strategies get your business to the revenue and profit goal line





Business financing in Canada, especially when it comes to cash flow challenges often feels like ' 3rd down, 110 to go “for the Canadian business owner and financial manager. It just might be time to ' break up ' with those challenges and focus on solutions. Let's dig in.

It's important to of course understand what in fact the cause of the problem is when it comes to working capital needs. In business these are often known as the ' drivers ‘of cash flow. When you know what those drivers are it's much easier to focus on solutions - the right solution.

Naturally your profits itself is one of those key drivers , as well as your depreciation policy .Not every business owner knows that the basic finance definition of profit is simply your income plus depreciation over any given period of time, i.e. quarterly, annually, etc.

However, it’s the levels and your management of current assets and current liabilities that are also key.

Let's get back to those current assets and liabilities - it's there that lies your greatest challenge as well as they key to financing solutions. Increases in accounts receivable and inventory drive cash flow needs. And you ability to slow down payables also makes you more cash flow positive. Naturally that must be done while keeping key suppliers and lenders generally satisfied with you as a customer.

How then do business finance current assets - Typical ' traditional' solutions include Canadian chartered bank lines of credit and term loans? When those cannot be accessed numerous other solutions are available - they include:

A/R Financing

Inventory Finance

SR&ED tax credit monetization (if you are filing ' SRED' claims)

P O / Contract financing

Sale Leaseback financing

Non bank asset based lines of credit

Unsecured cash flow loans

Remember also it's how you manage these assets that is the ultimate scorecard of your business cash flow needs - the ability to turn over receivables and increase inventory turns makes you a cash flow winner and less reliant on external financing .

Fixed asset needs also plays a key role in your overall management - it is highly not recommended to purchase or finance assets out of credit lines as that is a classic mis matching of uses and needs of cash . The optimal solution is Lease Financing, allowing you to spread payments over the general useful life of the asset. 80% of Canadian businesses use lease finance at one time or another.

Many industries have specific cash flow needs - your firm might be highly capital intensive, or, at the opposite extreme a service business with no major assets.


In many cases cash flow needs are driven by what we call ' the bulge ‘. It might be the seasonality of your business, or perhaps a large new order or contract that places extreme cash flow pressures on your business. Here's where early planning and the ability to match a business financing solution to your need are key.


If you're looking to fix or improve present and future cash flow needs, while avoiding that ' 3rd down 110 to go ' feeling , seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success . It's time to ' break up ' with cash flow problems and move on!



Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN BUSINESS CASH FLOW FINANCING EXPERTISE








Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?

CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '


























Stan Prokop

Lease Financing In Canada : Your Leasing Company Stacks Up As A Great Business Asset Finance Solution

You Don’t Need A Drone To Deliver On Asset Financing Needs


OVERVIEW – Information on lease financing options in Canada . When asset finance is needed a leasing company delivers on benefits and solutions your company needs for growth and profits








Asset finance for equipment requires that business owners and financial managers look down the road at both the use of the asset or assets in question and the cash flow pressures that the need for new assets demands.
It seems only common sense for owners and managers to take a strong look at why 80% of Canadian business utilizes lease financing at one time or another, or ... in some cases all the time! But hand in hand with that task requires looking at a number of issues, any of which could dramatically impact the true benefits of equipment finance.

Those issues? They include cash flow, impact on current credit lines and other lending agreements you have in place, depreciation, taxes, and the timing and ultimate disposition of the asset .

True power of leasing emerges when owners/managers acquire assets to produce revenues and profits. On the other hand these days such key assets such as technology are a must to stay competitive. The good news? Technology is made for financing these days, for everything up to and including software.

The term or ' amortization' of the lease is an important consideration. Typical lease terms tend to be in the 2-5 year range - anything less than 2 years is quite frankly considered a ' rental '. By the way, while we are focusing on leasing assets can of course be acquired via term loans also. In some cases short term bridge loans of a year or so can aid a company when they are refinancing assets.

Some accountants and financial analysts argue on occasion that leasing is more expensive than term loans. While that might be the case based on factors such as rate, term, down payment etc the reality is that leasing assets becomes a much more simple process - and certainly credit approvals are typically 1-2 business days - often same day for smaller transactions.

Operating leases are less commonly used but provide tremendous benefits when you are considering financing tech assets. Changes, i.e. ' upgrades' can very easily be made mid term, and options at the end of these transactions include return, extend, upgrade, purchase . That is flexibility.

Many assets that your business acquires include miscellaneous costs such as delivery, taxes, warranty, maintenance, install, etc. Those can almost always be included in your transaction. Remember also that if cash can not be expensed in your business (with leasing it does) it negatively impacts your owner equity.

In Canada the true popularity of leasing actual creates a problem. Who to deal with. Lessors are U.S. based, Canadian, divisions of banks, small tick oriented, or in some cases requires minimum deal size in the millions!

Additional lessors tend to be asset or industry focused, and even geographically challenged vis a vis where they can do business. A solution to that? Seek out and speak to a trusted, credible and experienced Canadian business financing manager who can assist you with your asset finance needs.


Stan Prokop - 7 Park Avenue Financial :

http://www.7parkavenuefinancial.com

Business financing for Canadian Firms , specializing in working capital, cash flow, asset based financing , Equipment Leasing , franchise finance and Cdn. Tax Credit Finance . Founded 2004 - Completed in excess of 90 Million $ of financing for Canadian corporations . Info /Contact :


7 PARK AVENUE FINANCIAL = CANADIAN LEASE FINANCING EXPERTISE






Have A Question /Comment On Our Blog Or Canadian Business Financing Alternatives ?
CONTACT:
7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Suite 301
Oakville, Ontario
L6J 7J8

Direct Line = 416 319 5769

Office = 905 829 2653



Email = sprokop@7parkavenuefinancial.com


' Canadian Business Financing With The Intelligent Use Of Experience '
























Stan Prokop