Special Loans And Workout Financing In Canada : Turnaround Just Around The Corner

Looking for a good workout ?

Here’s the bad news / good news around exiting special loans in Canada








OVERVIEW – Information on workout financing in Canada. Numerous alternatives exist around finance alternatives when your firm finds itself in, or going into, a ‘ Special Loans ‘ situation

Workout Financing in Canada: As we all know there's nothing like a good work out! When we meet with clients who find themselves in the ' bad news ' situation, namely ' Special Loans ‘it’s always good to know that the good news is the numerous turnaround finance alternatives available to owners/managers/shareholders. Let's dig in.

We're assuming that firms requiring the turnaround have traditional ' bank' type financing in place. When it's obvious that your current lenders, bank or otherwise are focusing on calling your loan there is no better time to start looking at solid alternatives.

In the case of banks calling a loan there is actually another piece of ' good news' around being put in the special loans category. There's no better example of the word ' limbo ' than the bank special loans category in Canada. Business owners/managers might well always want to change that working to ' purgatory ‘. However at the end of the day you are still being financed under the bank, albeit at a higher rate and tighter covenants and restrictions.

Here is your time to take a bit more of a ' stance ' on your overall finance situation - identifying a fix with the bank , or agreeing on a time and exit strategy - obviously new finance in place!

That ' fix ' with your bank or other commercial lender might include several scenarios:

New equity from owners

Sale of certain assets or parts of the business

Higher levels of the dreaded ' personal guarantee’

Re-doing the balance sheet vis a vis short and long term debt obligations - Here your company clearly must demonstrate viable long term cash flow generation when new forms of debt are considered


So what happened?

That's the legitimate question that owners / managers and other stakeholders to ask round the downslide of your firm's financial health. Here numerous scenarios abound - We've met with many owners who offer some interesting versions of their current financial problems. In some cases their information is correct, just being managed improperly. Examples: ' We've grown to fast ' ; ' Lost a big contract/client ‘, ' We're out of covenant on some of our operating metrics - i.e. DSO, DPO, Debt to Equity ‘.

Numerous workout financing turnarounds can be implemented. They can be done within the banking system but more often than not they involve alternative solutions – that includes:


Asset based Lending / ABL Non Bank Credit Lines
Bridge Loans
Sales Leasebacks
Cash Flow Loans – Secured/Unsecured

If you’re looking to have a solid workout on your financing turn around 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 SPECIAL LOANS scenario that fit your situation.



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 SPECIAL LOANS WORKOUT 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

R and D Tax Credit Financing In Canada : A CRA Sred Claim Loan

Visualizing Banking Your SR&ED R&D Credit ? Finance It

OVERVIEW – Information on the financing of the Canadian r and d tax credit . Financing a CRA Scientific Research and Experimental Development ‘ sred ‘ claim provides for immediate funds/cash flow for recovery of r&d expenses

The R and D Tax Credit in Canada - You've done your part on your CRA Sred Claim, and now it's up to the program to deliver on your refund chq. A number of issues affect the approval, and the timing of your refundable credit in the form of the government cheque. Financing your claim accelerates that whole process. Let's dig in.


As a business owner or financial manager that participates in the Canadian SR&ED program it's not hard to ' visualize’ banking that final cheque for this years refund. Numerous issues had to be addressed; including the quality of your claim, who prepares it, and assessing your own firms need to finance the claim to accelerate the refund.

To say it's not hard to understand the attractiveness of the Govt r and d refund program is almost an understatement. The evidence of that? Simply that thousands of firms like your claim Billions of dollars annually.

That cash refund of course can be used for any general ' corporate purpose '. That includes working capital, operations, investments in assets, and safe to say starting next years claim again, allowing your firm to meet its competitiveness.

When you leverage the program you're in effect utilizing the tools the federal and provincial government gives you to prepare and self assess your claim. That involves either preparing the claim yourself, which is certainly allowed but not always recommended. Third party SR&ED ' consultants ‘carry the burden of preparing their claim. That benefits owners who not only take advantage of the expertise of these folks, but also utilize the ' contingency' method that SRED Consultants utilize to charge you for their services. (They absorb the cost and time associated wit claim preparation - taking a portion of the final refund as their remuneration)

If the saying ' cash flow is king' applies to pretty well every business it certainly applies to those firms investing in research to maintain their competitive stance. That cash flow, via the SRED refund from Canada Revenue Agency (‘CRA ') is accelerated via the financing of your claim.

Let's outline the basics of a SRED loan. The majority of claims are financed in what we can call a ' bridge loan ' format. Your firm receives 70% of the amount of the combined fed/prov claim. And the monthly payments. None, because the bridge loan allows you to receive funds today and not pay back the loan until the claim is approved via the CRA process, which can inlcude financial audits, etc.

When we tell clients that they don't need to visualize the funding in the future imagine their surprise when we cover off some of the more recent developments in R and D tax credit financing. They inlcude receiving funds prior to your actual filing of the claim as well as being able to fund next years claim... today.

Your SRED loan package could not be more basic - it includes your financials, a copy of your claim, info on who prepared it, and any other pertinent basics around a typical business loan.

If you're looking to ' bank ', not just ' visualize' your r&d claim seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you in funding your refund .. today!





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 SR&ED TAX CREDIT 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

Canadian Business Financing

These are the top 5 Blogposts on our site - They have generated over 3300 page views


http://businessfinancingcanada.blogspot.ca/2011/05/how-to-qualify-for-franchise-financing.html

http://businessfinancingcanada.blogspot.ca/2013/03/blog-post.html

http://businessfinancingcanada.blogspot.ca/2011/11/discuss-among-yourselves-financing-sr.html

http://businessfinancingcanada.blogspot.ca/2011/05/why-canada-provides-film-production-tax.html

http://businessfinancingcanada.blogspot.ca/2012/02/baffled-by-franchise-loans-in-canada.html

If you're looking for Canadian Business Financing in the areas of :

A/R Financing

Working capital loans

Equipment Financing

Asset based lending

Franchise Financing

Cash Flow Financing

Sale Leasebacks

Turnaround Financing


CALL:

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 '

Receivables Factoring And AR Financing Canada : Talking Points On A Receivable Loan

Removing The Ouch From A/R Financing Solutions in Canada

OVERVIEW – Information on A/R financing in Canada . Receivables factoring via a receivable loan ( it’s not really a loan ) can work as a short to intermediate term solution for cash flow and working challenges . Costs, issues and how the facilities work is discussed

Receivables AR financing in Canada comes with the perception of an ' Ouch ' when it comes to entering into this type of cash flow facility. But is perception reality in this case? We’re quire sure it isn’t so let’s focus in on the total ' receivable loan ' experience. (By the way, it’s not a loan; you're just cash flowing current assets). Let's dig in.

Whether a business is profitable or struggling back to profitability the issue of liquidity and the ability to meet your obligations is always supreme. The ability to finance your sales via a receivable factoring solution is a solid tool when traditional bank financing can’t be achieved. But the type of facility you enter into, its cost, and how it works is really the ' ouch' factor you need to address to be successful with this type of financing.


While the bank paperwork on A/R financing is done through an ongoing ' assignment ' of your accounts the receivable loan (again, it’s not a loan!) paperwork provides that you are in fact ' selling ‘the receivables you wish to finance.

The biggest ' ouch ' for most clients is that as cheques are collected from your client they are deposited directly into the lenders account, not yours, given you have received the benefit of the cash . Can this process be overcome? It sure can! And that comes via entering into a Confidential Receivable Finance facility that allows you to bill and collect your own accounts. By the way, whether it’s a Canadian chartered bank or your receivable factor firm each of those has a ' lien' on your receivables. That's the collateral for the cash flow.

By the way some of the largest companies in Canada or the world for that matter use these types of facilities. In some cases a fancier name (‘Securitization ' ) is attached to the loan (it’s not a loan - have we mentioned that?!) but at the end of the day it’s the same process - eliminating a/r from the balance sheet and generating cash at the exact same time.

Typically the same type of borrowing restrictions come with this type of financing - with one positive exception. Receivables factoring typically allows borrowing against 90% of your total A/R, while Canadian banks prefer a 75% borrowing base margin. (You’d think they were more conservative or something?!)

Otherwise the following borrowing base has the same rules:

All North American receivables can be financed

Receivables must be 90 days or less current

If you are billing and collecting your accounts on 30 day terms the cost to finance a $10,000 invoice as an example would be in the 200$ range . That 9800$ you receive when you generate a sale can be ploughed back into working capital needs, utilized for purchasing more inventory, or you can get back your 200$ by taking a discount with your own suppliers or arranging better pricing based on volume purchases .

Thousands of Canadian businesses utilize this financing as a ' bridge' back to traditional financial solutions. In fact if your business is growing ' too quickly ' for traditional financing it's often the best solution.

If you want to both remove the ' ouch ' from the receivable loan facility ( it's not a loan ..................) and wish to cover off more talking points on how this facility would work for your firm 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 cash flow 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

Turnaround Finance Canada: Don’t Just Imagine Company Restructuring Financing

Ch – Ch - Changes – Turnaround & Restructuring Financing In Canada

OVERVIEW – Information on turnaround finance solutions in Canada . Investigating key aspects and elements of successful company restructuring financing needs

Turnaround finance solutions in Canada will almost always mandate ' ch ch changes '

in how a business is and will be financed. While David Bowie probably wasn't thinking company restructuring financing when he wrote his iconic song it's safe to say that ' change ' is something business owners in challenging situations must address. Let's dig in.

Financing solutions for ' turnarounds ' have the ability to be both complex and simple, requiring knowledge, experience and the ability to access financial resources that augment the turnaround. The goal is almost always the same - avoid bankruptcy, maximize the value of the assets of the business, and in some manner ensuring the long term viability of your company. Bottom line, it’s all about addressing the various constituents - owners, creditors, suppliers, employees.

While we're focusing here on financing issues other items need to be addressed- i.e. sales growth, employee issues, cost reduction, etc. All of those, and others, necessitate ' ch ch changes'! In many cases the type of industry you are in will often necessitate the type of change required.

Assets and collateral are often at the heart of any turnaround finance. If not addressed with the right financing solutions the perception or reality is that assets have the potential to lose their value in challenging times. The ability to leverage those into a proper finance solution is key. Unfortunately items such as ' goodwill ' and ‘R&D' don’t play well into current and immediate fix requirements. In some cases they might need to be written down or curtailed respectively.

One of the best solutions that is somewhat all inclusive and a one stop fix is the ' ABL ' - the Asset Based Loan. Whether term or operating in nature it rounds up receivables and inventory (operating) and equipment and real estate (term) assets and monetizes them into one facility. Almost always it takes our current secured creditors and banks - while often injecting more capital into the business immediately. It allows owners and financial managers to address what the pros call the ' capital structure ' of your business in a temporary fix manner.


While fewer ' traditional ' finance options exist in turnarounds those that do can address your creditor issues.

Other company restructuring solutions include:

Bridge loans

Sale Leasebacks

Mezzanine / Cash Flow financing

Any one of the solutions we have mentioned allow the business to self correct some of those key issues around financial ratios, covenants, owners guarantee liability, etc.

What is the focus of a financial turnaround? Key requirements include:

- A strong and realistic cash flow forecast - (strong A/R and a/p analysis)
- understanding current liquidity
- balance sheet /working capital ratio analysis
- profit /margin analysis

The best situations in turnaround often show that the company itself has a lot of long term potential, it’s just all about correcting the present balance sheet - in effect a ' makeover' is required!

Timing is everything in refinancing under restructuring - it's all about stopping the negative cascade of events and perceptions. One top expert referred to his as halting the ' melting ice cube '!
Accessing turnaround finance requires credibility and expertise. 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 restructuring financing that helps ensure the fix.




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 TURNAROUND 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

Leasing Companies In Canada : Calling All Businesses Needing Lease Company Asset Financing Needs

Looking For A Hail Mary Pass On Financing Assets ? Here It Is

OVERVIEW – Information on leasing companies in Canada . What does the business owner/manager need to know in order to benefit from a lease company solution



Leasing companies in Canada almost always provide the classic ' Hail Mary Pass ' when it comes to financing asset needs. Whether its fixed assets, rolling stock, or technology needs the ' right ' lease company solves the problem, just when you needed it most. Let's dig in.


How though does the business owner/financial manager sift through, process, and reap the benefits of the equipment financing solution? Numerous real or perceived obstacles come up - they include a requirement to understand some of the basics of the industry, allowing you to reap the benefits they so strongly preach.

While many owners more experienced in lease financing constantly reap those benefits many firms still wrestle with the basics - they include:

What is the difference in rates based on asset size, credit quality, and type of asset financed?

Are there alternatives to the lease solution?

How important are the tax and accounting implications of asset financing?

Is it necessary to perform a ' lease vs. buy ' analysis?

What types of leases are available and how do they work?


As a lessee you're in much strong position than you think. The Canadian lease landscape is very competitive, current rates are at an all time low, and different types of finance firms truly want your business. By the way it's during this negotiation stage that your firm, or your lease advisor. truly wields the most negotiating power.

At future stages in the lease process when it comes down to credit approval and documentation it's as important to define your rights and obligations under the lease .Knowing the asset quality and useful life of the asset is also important, as that ' end of term ' value is often critical to knowing who's making more money on the transaction, you or your lessor!

As we have said, the choice in your financing needs is significant in the Canadian marketplace. Independent commercial firms, banks and captive finance firms that are directly related to manufactures all vie for your business. A lot of shoe leather can be wasted, by the way , when it comes down to searching for firms that ultimately can't meet your needs when it comes to deal size, assets financed, or your firms credit profile . The good point of ' credit profiles is that virtually all credit quality can be financed. If your company has credit ' challenges ' leases can be ' structured' vis a vis term, down payment, outside collateral, etc.

It can't be expected that all firms requiring asset financing needs know all there is to know about the mechanics of the equipment lease. That's when it might be beneficial to use the services of a trusted, credible and experienced Canadian business Financing Advisor with a track record of success who can assist you in issues such as:

Pricing/ financing cost

Your firms deal requirements

Suitable funders

Documentation/ Credit Approval

In effect you're utilizing the experience and knowledge of the industry for your firm’s maximum benefit. All of a sudden that ' Hail Mary pass' looks better than ever.


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 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

A Shred Credit Financing Loan Unleashes The Cash Flow Power Of Your R and D Sred Tax Credits

SR&ED Tax Credits :

Prepared - Check

Filed - Check


Financed - Check!

OVERVIEW – Information on ‘ SHRED’ ( SR&ED ) credit financing in Canada . The ability to utilize SRED Tax credits loans enhances your businesses ability to accelerate the cash flow benefits of this program – ie monetizing your refundable tax credit today , without the wait

Shred Credit financing in Canada eliminates business owners / financial managers trying to imagine when they will receive their refund. The cash flow derived from a SRED Tax credits loan is often one of the most valuable cash flow injections many firms experience through the year. Let dig in.


For the thousands of firms that file for the billions of dollars in refundable tax credits the program is somewhat affectionately known as ' SHRED ' , while the actual correct name has the ' ampersand' in it - namely SR&ED . When your company utilizes and qualifies for this R&D recovery strategy you're in a position to recover a large majority of the expenses your firm outlays for research and development.

We're the first to acknowledge the program name, SR&ED, Sred, or whatever..!! conjures up images of men and women in white coats and labs.

The reality? Thousands of Canadian firms use the program and qualify for work they do in advancing their products, services, and processes. A very general rule of thumb is that 35% or so of funds spent are typically recovered.

But how do owners overcome what some associate as time consuming in anything related to government? That's easy - as the vast majority of claims are prepared by third party ' SR&ED Consultants ' , who further eliminate time and both risk by preparing claims on a contingency basis - thereby claiming a portion of the refund for their work . They are responsible, along with yourself for deadlines, quality of your claim, and the back up needed to validate your firms spend.

With respect to the financing of the claim suffice to say that rarely do owners complain about anything that refunds a large portion of your firm’s expenses in your effort to stay competitive. What can cause concern of course is the time gap in between filing and waiting for your refund! Business owners would always prefer to get those funds working in their business , for any purpose they desire, including of course starting to spend on next years work in research.

Enter the SRED TAX CREDITS Loan! It leverages your claim into instant cash flow/working capital;

even more so given the general ' SHRED' credit financing structure. Financings are structured as ' bridge loans ' which enable you to monetize up to 70% of your claim today, without making payments during the time of the loan.

When the combination of federal and provincial claims are approved and funded by the govt the loan is in effect ' collapsed ' with your firm receiving the balance of the claim less financing costs which typically are ' mezzanine' in nature given the uniqueness of the financing .

Looking for even better news? Consider the fact that claims can be financed prior to filing, or even as you start next years claim.

If you're looking to unleash the financing power of Shred Credits consider a SRED Tax credits loan : 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 the financing of your refund .






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/shred-credit-financing-sred-tax-credit-loan.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