Business Loan And Capital Needs In Canada : First Hand Tips On Loans

From Scared Amateur To Successful Business Loan Recipient – Here’s How

OVERVIEW – Information on successful capital raising in Canada . Getting a business loan boil down to these issues . Secrets and common sense on loans for Canadian businesses

Business loan chances of success in Canada can be significantly improved, both in variety of options and success when the business owner/financial manager has some basics down. That changes the ' amateur ' to the ' pro ' when it comes to financing your business in the Canadian marketplace. Let's dig in.

Although larger corporations, both private and public don’t often require personal guarantees of owners that certainly isn’t the case in the SME COMMERCIAL FINANCE area. In fact both the actual issue of the guarantee and the personal credit history of the business owner/owners will affect both rate and overall approval potential in the majority of ' traditional ' ( aka ' the bank ' ) financing .

Business owners are encouraged to ensure they can convey their personal financial issues in a manner that both protects themselves to a degree as well as helps in getting financing approval at good rates. It common for owners to try and avoid pledging personal assets - in effect separating their business and personal finances - and that's a good thing!

The concept of ' Collateral ‘is critical to business loan success. In many cases it’s either a key ' requirement ' or in some cases a ' driver ' of successful capital resolution.

It's important to differentiate between different types of assets - in certain cases its fixed assets/equipment; in other cases your collateral is your working capital accounts. These are receivables, inventory, and any tax credits that might be financeable. (The most common tax credit financed is the SR&ED refundable tax credit). Don't forget also that purchase orders and contracts are financeable under the right circumstances.

What type of ' business loan' finances new or existing assets? It could be a bank term loan; a Govt guaranteed Small business loan, or even a bridge loan that is supported by hard assets. An equipment lease is not a ' loan ' per se but is always financing hard assets, including technology. The Government Small business loan provides up to 350k in asset and leasehold financing to thousands of businesses in Canada every year.

And those ' Current Assets' on your balance sheet. Financing of those should be done via:

A/R Financing

Bank revolving credit lines

Asset based non bank business lines of credit

SR&ED Tax credit financing

If there is one ' tip ' around loans its understanding the concept of cash flow. Proving you have positive cash flow allows you to be eligible for unsecured cash flow loans. Business plans you might prepare to show the merits of loan financing to your business must include an emphasis on cash flow generation, and repayment ability.

The ability to recognize and identify the type of financing your firm is eligible for is key to capital funding success. It also saves a lot of wasted time. Identifying the right ' traditional' or in some cases ' alternative ' lender in a timely and credible fashion is key. A good analogy is that you wouldn’t go to a fast food restaurant expecting ' haute cuisine ' food and service

If you're looking to change ' amateur' to ' pro ' status in business loan and asset finance 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 capital 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 :



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

Commercial Financing Loans From Finance Companies In Canada : Heres Your New Rules

Super Rare Shouldn’t Be Your Description Of Commercial Financing Loans From Finance Companies & Banks

OVERVIEW – Information on commercial financing in Canada. Loans from finance companies and banks are attainable with this information

Commercial financing in Canada , if you're an owner/manager in the SME Commercial area is often dubbed as ' Super Rare '! Finance companies and banks offer a multitude of traditional and alternative loans depending on various business needs. We're covering off some of the ' new rules ' around successful Canadian business financing. Let's dig in.


As we've noted, lending to businesses in the SME (small to medium enterprise) sector seems to only happen in those TV commercials and print advertisements.

The reality though is that with some proper homework and expert assistance numerous new business financing solutions are available to run or grow your business.

For the most part the owner/manager has to reconcile to the fact that although Canadian chartered banks maintain their willingness to lend to your firm the reality quite often is that your business can't satisfy the criteria needed to achieve proper, low cost, and flexible bank financing .

Let's examine some key factors around bank loans and other commercial financing solutions. One of those is sales,

or lack thereof.

Revenues are a key driver in your ability to access business credit. Many start ups that are pre revenue or who have little revenues will find it exceedingly difficult to achieve traditional financing. It's those revenues that will create cash flow that’s mandated by banks.

Yet early stage firms can still access numerous loans from commercial finance companies. One ' hybrid' solution is the Canada Govt Small Business Guaranteed Loan Program, providing up to 350k for the purchase of assets or even leasehold improvements to your business. The ' Guaranteed ' terminology revolves around the fact that the Federal government guarantees the majority of the loan to your bank,

Canada's non brick and mortar federal crown corporation bank also provides working capital term loans and asset financing that is often complimentary to a total finance solution you require.

Other solutions that can monetize your assets into valuable cash flow include:

A/R Financing

Inventory Finance

SR&ED Tax Credit Monetization

Purchase Order Finance

Equipment Financing

Asset based business credit lines


The ability to demonstrate loan repayment is best demonstrated via a solid business plan and cash flow forecast - with emphasis on the ' cash flow ' part, not meteoric sales projections that resemble a hockey stick.

While many firms can be self financing to a certain degree at a certain point the right amount of debt , aka ' leverage ' will help grow the business faster .
A good example of ' good debt ' is equipment leasing, where certain assets you need can help you substantially grow revenues or decrease expenses.

If you're looking to ensure you've got the ' New Rules ' down on both traditional or alternative financing solutions , and you want to eliminate ' super rare' from your commercial financing thoughts seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with key needs.




Stan Prokop -

7 Park Avenue Financial :

Business Credit Line Needs : Understanding The ABL Loan Facility Solution

Business Credit Line Needs : Understanding The ABL Loan Facility Solution


OVERVIEW – Information on the ABL facility loan in Canada . This business credit line alternative is becoming more popular . Here is why including benefits and potential drawbacks because .. business is a balancing act

Business credit line needs in Canada sometimes require a ' gear change '

when things arent working enough, or... at all. One solution and alternative is the ABL facility loan, somewhat unknown or misunderstood by many business owners and financial managers in Canada. Let's dig in.

Asset based lenders are somewhat of the ' new frontier' for satisfying borrowing needs for Canadian business owners and financial managers. While traditionally at a higher cost than bank borrowing the good news is that in almost all cases these credit lines have rates that are becoming more attractive , if for the only reason that Canadian chartered banks realize that business borrowers have more and more alternative solutions available.

Is there a ' simple ' way to understand the Asset based business line of credit? We think there is, and it's simply to understand the ' collateral' focus is ' Assets ‘. They most often are: Receivables, Inventory, Equipment... and occasionally real estate. From the bank perspective the main qualifiers for a credit line are: Cash flow / clean balance sheets/profits. Those arent always permanently achievable as most owners/mgrs realize.

As far as the uses of an ABL facility go they include daily operational financing, growing a business. Two other uses are commonly buying another business or simply a consolidation of debt... if that makes sense.
More often than not it’s not a permanent facility, as many clients for whatever reason deem Canadian banks as their preferred lender.

Is size important? We suppose it depends but smaller facilities typically start in the 250k range, and as far as upper borrowing limit there essentially is none. Typically a ' due diligence' type fee is associated with such a loan / credit line that is based on size, risk, uniqueness of the industry, etc.

One of the strong appeals of the Asset based business credit line is that borrowing margins are more attractive. Typical ranges are 90% for receivables and anywhere from 30-70% on inventory. Firms with an investment in fixed assets can borrow on a revolving basis on the liquidation value of equipment/fixed assets.

True asset based loans tend to be ' non covenant ' in nature and don’t come with the ratio and covenants associated with a bank credit line. If there is one downside to the ABL facility it’s that reporting on your business is more rigorous - that must be balanced against borrowing power and access to capital.

If your company wants to ' change gears ' on the type of revolving credit facility that might make more sense seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can help you understand one of the ' new frontiers' in business finance in Canada.



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 :

http://www.7parkavenuefinancial.com/business-credit-line-abl-loan-facility.html







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

Start Up Business Loans In Canada : Analyzing Startup Financing

Looking For A Second Opinion On Start Up Financing In Canada ?

OVERVIEW – Information on start up business loans in Canada . Startup financing comes with numerous challenges . Here are alternatives to the entrepreneurs’ funding obstacles

Start up business loans in Canada solicits strong opinions from Canadian entrepreneurs / business people. A large part of that opinion revolves around the challenges and frustration facing startup financing needs. That's where a 2nd opinion might just help... let's dig in.

The majority of startups, in the mind of the entrepreneur, require ' loans ‘. While not always the case (and we'll talk about that) the harsh reality is that Canadian chartered banks rarely provide self standing start up loans. Why is that the case? One of the reasons is simply historical failure rates in this type of venture; the other reason is even more basic: firms in business with a history have a better survival chance.

We sometimes forget our banks our regulated and are protecting our deposits at the same time they are lending. Larger more established lending opportunities represent larger more predictable bank profits.

So where do entrepreneurs typical go when they are raise capital? Top experts tell us those funds come from:

- Personal Equity
- Bank loans (Supported by personal collateral!)
- The proverbial friends and family
- Credit cards (business, and unfortunately - personal)

So what then are the ' realistic' options for entrepreneurs? Personal equity is always important, and any traditional or alternative finance solution will probably demand some level of personal investment. We'll add also that some level of reasonable personal credit history is an important part of the start up equation. Personal credit bureau scores of 650 are desirable.

Every adult should know their credit score.


Suffice to say that partial of full personal guarantees are required for any type of initial financing of the business.

The Canadian Govt Small Business loan is perfectly suited for start ups - it provides financing for loans up to 350k for equipment and leasehold improvements. Close to 8000 start up and relatively new businesses access this capital in Canada every year.

Other financing sources include:

Leasing companies

Tax Credit Financiers (typically SR&ED claims are financed)

Invoice financing companies

Revenue / Royalty based finance options

We wish we had a dollar for every hr. some of our clients spent chasing VC/PRIVATE EQUITY/CAPITAL POOL solutions which are in truth only attainable for less than 1% of all start ups . Having a business plan that focuses on cash flow and repayments, not ' hockey stick ' sales projections also helps!

While many business folks search for ' 1 ' solution for their start up financing needs in Canada the more proper approach is to cobble together a solution from multiple traditional or alternative sources . 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 start up business loans that make particular sense for your 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 STARTUP FINANCING 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

Receivable Financing Services In Canada : The Power OF A Receivables Company Solution For Your Business

Receivable Financing Services Might Just Be The Buried Treasure Your Firm Is Looking For

OVERVIEW – Information on solutions from a Receivables Company In Canada : Receivable Financing Services Might Be The Right Solution for Working Capital Needs

Receivable Financing Services are one of the most popular working capital and cash flow alternatives today for Canadian business. Receivables company solutions are a solid alternative to the Canadian chartered bank offering - the 'business line of credit '. Let's dig in.

It's not hard to see why business owners/financial managers are mesmerized by the lure of bank facilities - they are low cost, have some solid flexibility. The problem? Getting approved! Essentially it's all about the credit standards set by our banks.

Receivable financing services are alternatively served by a true ' Receivables Company '. They just might be the ' buried treasure ' owners/managers are looking for. These commercial firms fill the ' need gap ‘, albeit at a higher cost. It should be no secret then that the key collateral is simply the business assets of the company, specifically A/R.

Receivable Finance, aka ' factor financing ' - its not ' equity ' or 'debt' financing, its simply monetizing your sales for the business life blood - cash flow.

Financing costs for A/R financing vary widely , and are typically in the 1.25 - 2% per month range These costs though can be truly be significantly offset in a number of ways -

- Your business can negotiate better pricing on product and services because of new found cash availability

- The business can now afford to take valuable supplier discounts for prompt payment, which themselves are often 2%!

- Less sophisticated owners do not always take into account the actual cost they incur to ' carry a/r’

- Larger commercial or govt contracts can be taken on with the knowledge sales can be financed

In our own experience meeting and talking to clients the actual 'needs' of the business become blurred - as the business owner / manager often co-mingles other needs such as equipment , property, inventory .

The best way to view A/R solutions is along the lines of short term operating needs.

There are some distinct advantages to a commercial A/R financing facility. One of them is simply borrowing power, as typical advances are 90% of outstanding A/R, significantly better than the bank 75% ratio. The best use of a facility is when you have an ongoing facility based on the ebb and flow of sales and A/R collections

There are some other solutions out there that might be worth investigating - they include Revenue based finance, which simply allocates a portion of all sales as your borrowing base. In the smaller end of the market, i.e. small businesses and retailers/restaurants ' Merchant Advance ' solutions are popular. They simply monetize future sales - today.

Top experts will tell you that the best use of non bank commercial financing is for business growth - in the majority of cases they are the ' bridge ' back to traditional financing and common timeframes for utilizing this type of service is a year or two.

One of the best A/R factoring solutions is ' CONFIDENTIAL RECEIVABLE FINANCE ‘, allowing you to bill and collect your own invoices without any notification to others - least of all your competitors .

If you're looking to explore the potential ' power '

of a Receivables company 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 working capital 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 A/R 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

Mergers And Acquisitions Financing In Canada : Connecting The Dots On SME Commercial Finance Opportunities

Talking Serious On Financing Mergers and Acquisitions For SME Commercial Finance Needs

OVERVIEW – Information on financing mergers and acquisitions in Canada . SME Commercial finance needs can be always be met if you are purchasing a business or merging two firms .

Mergers and Acquisitions financing in Canada is somewhat of a ' connect the dots '

challenge for many entrepreneurs, business owners and financial managers who are looking to successfully complete SME Commercial Finance transactions in Canada . Whether you're a buyer or a seller it's all about knowing alternatives and recognizing how obstacles can be overcome... bottom line... ‘Talking serious '! Let's dig in.

Quite often a calculated merger makes sense for many companies - other times opportunities arise (sometimes at the misfortune of others) that cannot be ignored but should be exploited in a positive manner. Raising capital in either a sale, merger, or acquisition creates wealth when executed properly.

In many cases it's simply a sale and purchase of assets and other interests a business might have, up to and including business ' relationships '.

One of the immediate complexities of any sale or purchase of a business is the issue of ' asset' versus ' share' transactions. Here's where talking to your lawyer and accountant can help avoid major pitfalls. Issues to consider are asset values, taxes, and potential liabilities.

Existing financing must also be addressed, including secured creditors, leases, premises, etc.

In a lot of cases a formal ' opinion' or ' valuation' of certain or all assets or total busines value might be required. Many times a lender will specify a certain appraiser or valuator as a condition of their financing, which is a case of a trusted relationship between the lender and the appraiser.

Highly recommended in any case of purchase, sale, or merger is a proper business plan that reflects areas of value and challenge - most importantly cash flows.

Valuation plays a large part in the successful financing of any transaction. Capital raised is dependent on actual asset values ( a/r , inventory, equipment ) and ability to generate cash flows to pay down acquisition financing as well as daily operational financing .

Many less experienced business people are often either confused or unaware of the different valuation methods - ' Comparables ' ' Times Earnings/ Times Sales ' ' Discounted Cash Flow ' ' Cash Flow Analysis ' etc.

The type and cost for the valuation will ultimately depend on the transaction size, complexity and risk profile.

Ways to achieve merger and acquisition financing in the SME Commercial area? They include;

Govt Small Business Loans

Bank term loans / operating facilities

Asset based lending

Sale Leasebacks / Bridge Loans


They might be separately considered, or in some cases cobbled together to successfully complete a transaction. Don’t forget also that ' Seller Financing’ can often be the last piece of the puzzle.

If you're looking to ' talk serious ' when in comes to purchases or merging or selling 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 in your 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 MERGERS & ACQUISITIONS FINANCING






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 Vs Buy Declassified : Addressing Equipment Finance Financing Considerations In Canada

Lease Vs. Buy Decisions Don’t Have To Be A ' Hair Raising' Question or Challenge

OVERVIEW – Information on how business owners and managers can address the lease versus buy question when addressing equipment finance and general financing needs for asset acquisition

Equipment finance poses an interesting and challenging question for Canadian business owners and financial managers. That question? Should we lease or buy the asset in question. Or should we care ? ( Answer – you should ) . Whether it’s a one time asset acquisition or if you company is somewhat ' asset intensive ' there are numerous ' repercussions’ (both positive and negative) around addressing that question properly .Let's dig in.

It's should be no secret that the lease industry touts the many advantages of equipment financing as beneficial to your business. Those benefits are real, but even more real is the fact that every company is somewhat different relative to its own needs and any peculiarities surrounding their business or industry.

What then are some of the key factors around your choice to finance, or buy an asset or technology? (Yes Virginia, your tech needs can be financed!)
And by the way, we're not trying to complicate the decision, but other alternatives to leasing do exist - including term loans, sale leasebacks of owned assets, and temporary bridge loans.

Back to the ' lease vs. buy ' decision though at the heart of that decision almost always is some cash flow analysis.

It's really the ' timing' of monthly payments and cash outflow that brings many owners to the decision to opt in favor of leasing. Some of those other issues that should be taken into consideration include tax issues that might well be discussed with your accountant.

In our own experience clients tend to consider balance sheet and, tax, depreciation and other issues in favor of... you guessed it... interest rate! If only we had a dollar for every time someone asked us ' what’s my rate ‘......

In some ways, primarily because the industry is very competitive and overall credit quality drives rate it’s really the least important issue in lease finance!

What are some key data points in managing your overall decision to purchase or lease an asset? They will include:

How the equipment will be used and maintained?

Is it advantageous to my business to include other miscellaneous costs tied to the acquisition in the financing - delivery, installation, service, etc?

Do I have ' wiggle room ' in getting out of a lease early (Answer - basically you do not!)

How can upgrades or add ons to the asset/assets in question be handled?

If you're looking for expert assistance in the lease versus buy conundrum seek out and speak to a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in ‘ declassifying ‘ data into asset acquisition financing that makes sense .



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 EQUIPMENT FINANCE 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